Premier Financial Corp. Announces Second Quarter 2023 Results

Premier Financial Corp. (Nasdaq: PFC) (“Premier” or the “Company”) announced today 2023 second quarter results, including net income of $48.4 million or $1.35 per diluted common share, compared to $22.4 million, or $0.63 per diluted common share, for the second quarter of 2022. Second quarter 2023 results include the impact of the disposition of the Company’s insurance agency, First Insurance Group (“FIG”), for a net gain on sale after transaction costs of $32.6 million pre-tax or $0.67 per diluted share after-tax. Excluding the impact of this transaction, second quarter 2023 earnings would be $0.68 per diluted share.

“Premier’s second quarter performance reflected the expected increase in quarterly core earnings to $0.68 per share,” said Gary Small, President and CEO of Premier. “The improvement was driven by multiple factors. Strong loan growth resulting from selective new business loan origination, coupled with a strong funding pace of prior year construction commitments. C&I commitments totaled 49% of second quarter commercial loan origination activity. Total deposits grew $220 million, or 3.3%, for the quarter. Customer deposit balance movement stabilized, down just $38 million, or 0.6%.”

“Core non-interest income revenue grew 9.4% versus second quarter 2022, and core expenses fell 4.6% versus first quarter 2023 reflecting the progress made associated with the cost reduction initiative announced last quarter. Margin continued to decline but at a more moderate pace. Hedging activity was initiated in June that will both add to near term net interest income and protect the organization against the unfavorable impacts of future Fed Fund rate increases. Our consumer customers continue to exhibit active spending habits and credit portfolio indicators remain very favorable. The commercial loan portfolio continues to perform well with no unfavorable trends or early indicators of stress,” added Small.

“The sale of the insurance agency delivered positive outcomes for all stakeholders,” Small continued. “The combination of FIG and Risk Strategies brings new opportunities for the FIG team; our joint bank/agency clients will benefit from a broader product offering and expanded agency capabilities; and the Premier shareholders benefit from a tremendous capital boost with the transaction increasing tangible book value by $1.37 per share. As we look forward, the organization is focused on moderate balance sheet growth, continued non-interest revenue improvement (adjusting for FIG), and strong expense management. Deposit mix will continue to be a challenge although our beta management techniques continue to evolve.”

Insurance agency sale

As previously announced, on June 30, 2023 the Company completed the sale of FIG to Risk Strategies Corporation. The disposition generated a gain on sale of $36.3 million before transaction costs of $3.7 million. The transaction strengthened capital by increasing equity $24.2 million (24 basis points and $0.68 per share) and tangible equity by $48.8 million (54 basis points and $1.37 per share), which included the recovery of goodwill and intangibles of $24.7 million at June 30, 2023. Utilization of sale proceeds will improve net interest income that effectively offsets pre-tax earnings previously generated from the insurance agency assuming paydown of borrowings and will become accretive to earnings upon deployment into higher yielding loans.

Addressing interest rate sensitivity

During June 2023, the Company completed a series of balance sheet hedges to improve asset-sensitivity and provide protection against additional rate increases. In total, the Company executed $500 million notional of pay-fixed/receive-variable interest rate swaps with half 2-year and half 3-year in duration. The average pay rate for these swaps is approximately 4.12%. Based on rates as of June 30, 2023, these swaps are expected to generate approximately $4.7 million of annualized pre-tax net interest income. The full quarter benefit of these swaps will begin to be realized in the third quarter, and the positive impact will increase as SOFR increases. Each 25 basis point increase in SOFR is expected to generate an additional $625 thousand of annualized pre-tax net interest income, including the impact of the new swaps and the prior $250 million notional receive-fixed/pay-variable swap.

Quarterly results

Capital, deposits and liquidity

Capital improved significantly during the second quarter of 2023. Total equity increased $22.5 million, or 2.5%, including the positive impact of the insurance agency sale offset by a $15.0 million detriment in accumulated other comprehensive income (“AOCI”), primarily due to a negative valuation adjustment on the available-for-sale (“AFS”) securities portfolio. Tangible equity increased $48.4 million, or 8.4%, and the tangible equity ratio increased 52 basis points to 7.55%, or 9.58% excluding AOCI. Regulatory ratios also improved during the second quarter of 2023, including CET1 of 10.81%, Tier 1 of 11.28% and Total Capital of 13.05%, each up 80 basis points. All of these ratios also exceed well-capitalized guidelines pro forma for AOCI, including CET1 of 8.53%, Tier 1 of 9.00% and Total Capital of 10.77%.

Total deposits increased 3.3%, or $220.4 million, during the second quarter of 2023, due to a $258.4 million increase in brokered deposits offset partly by a net decrease of $38.0 million in customer deposits. Total average interest-bearing deposit costs increased 38 basis points to 2.07% for the second quarter of 2023. This increase was primarily due to brokered deposits and the migration of customers from non-interest bearing deposits into interest-bearing deposits, including higher cost time deposits, as customers sought to obtain yield. Average interest-bearing deposit costs excluding brokered deposits and acquisition marks were 2.08% during the month of June, representing a cumulative beta of 37% compared to the change in the monthly average effective Federal Funds rate that increased 500 basis points to 5.08% since December 2021, as reported by the Federal Reserve Economic Data.

Uninsured deposits at June 30, 2023 were 31.5% of total deposits, or 17.3% adjusting for collateralized deposits, other insured deposits and internal company accounts. The Company successfully established eligibility for the Federal Reserve Borrower-In-Custody Collateral Program, which increased borrowing capacity by more than $300 million during the second quarter. Total quantifiable liquidity sources totaled $2.8 billion, or 230.5% of adjusted uninsured deposits, and were comprised of the following at June 30, 2023:

• $121.7 million of cash and cash equivalents with a 5.15% Federal Reserve rate;
• $298.5 million of unpledged securities with an average yield of 3.02%;
• $1.5 billion of FHLB borrowing capacity with an overnight borrowing rate of 5.17%;
• $288.7 million of brokered deposits based on a Company policy limit of 10% of deposits, with market pricing dependent on brokers and duration;
• $70.0 million of unused lines of credit with an average borrowing rate of 6.08%; and
• $491.1 million of borrowing capacity at the Federal Reserve with an average rate of 5.31%.

Additional liquidity sources include deposit growth, cash earnings in excess of dividends, loan repayments/participations/sales, and securities cash flows, which are estimated to be $64.7 million over the next 12 months.

Net interest income and margin

Net interest income of $54.1 million on a tax equivalent (“TE”) basis in the second quarter of 2023 was down 4.1% from $56.4 million in the first quarter of 2023 and 8.9% from $59.3 million in the second quarter of 2022. The TE net interest margin of 2.72% in the second quarter of 2023 decreased 18 basis points from 2.90% in the first quarter of 2023 and 64 basis points from 3.36% in the second quarter of 2022. Results for all periods include the impact of PPP as well as acquisition marks and related accretion. Second quarter 2023 includes $168 thousand of accretion in interest income, $212 thousand of accretion in interest expense, and $5 thousand of interest income on average balances of $673 thousand for PPP.

Excluding the impact of acquisition marks accretion and PPP loans, core net interest income was $53.7 million, down 4.2% from $56.0 million in the first quarter of 2023 and 8.2% from $58.5 million in the second quarter of 2022. Additionally, the core net interest margin was 2.70% for the second quarter of 2023, down 18 basis points from 2.88% for the first quarter of 2023 and 62 basis points from 3.32% for the second quarter of 2022. These results are positively impacted by the combination of loan growth and higher loan yields, which were 4.86% for the second quarter of 2023 compared to 4.66% in the first quarter of 2023 and 3.99% in the second quarter of 2022. Excluding the impact of PPP, balance sheet hedges and acquisition marks accretion, loan yields were 5.01% in June 2023 for an increase of 129 basis points since December 2021, which represents a cumulative beta of 25% compared to the change in the monthly average effective Federal Funds rate for the same period.

The cost of funds in the second quarter of 2023 was 1.92%, up 41 basis points from the first quarter of 2023 and up 168 basis points from the second quarter of 2022. The year-over-year increase is largely due to utilization of higher cost FHLB borrowings in support of loan growth in excess of deposit growth during 2022. The linked quarter increase is due to higher rates on FHLB borrowings and higher average deposit costs discussed above. Excluding the impact of balance sheet hedges and acquisition marks accretion, cost of funds were 2.05% in June 2023 for an increase of 184 basis points since December 2021, which represents a cumulative beta of 37% compared to the change in the monthly average effective Federal Funds rate for the same period.

“The second quarter 2023 individual monthly margin results were much more stable than those experienced in fourth quarter 2022 and first quarter 2023, which were in constant decline,” said Small. “This reflects less ‘early mover’ activity affecting our deposit book combined with less active Fed Fund rate movement during the quarter. While we expect to continue to see deposit mix movement in the book, the second quarter represents a trend in the right direction.”

Non-interest income

Excluding the $36.3 million gain on the sale of the insurance agency, total non-interest income in the second quarter of 2023 of $17.1 million was up 36.8% from $12.5 million in the first quarter of 2023 and 18.7% from $14.4 million in the second quarter of 2022, primarily due to fluctuations in mortgage banking and gains/losses on securities. Mortgage banking income increased $3.2 million on a linked quarter basis and $1.0 million year-over-year as a result of increased gains primarily from increases in hedge valuations. While mortgage pipeline hedges effectively net out over the life of the loans, individual periods can be volatile as market rates and prices change.

Security gains were $64 thousand in the second quarter of 2023, primarily due to increased valuations on equity securities. This compares to a loss of $1.4 million in the first quarter of 2023 and to $1.2 million of losses each from decreased valuations on equity securities. The company also sold $5 million of AFS securities for a $7 thousand loss with average yields less than FHLB borrowing rates during the second quarter of 2023. Service fees in the second quarter of 2023 were $7.2 million, an 11.9% increase from $6.4 million in the first quarter of 2023 and a 7.7% increase from $6.7 million in the second quarter of 2022, primarily due to fluctuations in loan fees including commercial customer swap activity. Insurance commissions were $4.1 million in the second quarter of 2023 down from $4.7 million in the first quarter of 2023 and $4.3 million in the second quarter of 2022 with the linked quarter decrease primarily due to $0.9 million of contingent commissions that only occur in the first quarter. Wealth management income of $1.5 million in the second quarter of 2023 was consistent with $1.5 million in the first quarter of 2023 and up from $1.4 million in the second quarter of 2022. BOLI income of $1.0 million in the second quarter of 2023 decreased from $1.4 million in the first quarter of 2023 and was flat from $1.0 million in the second quarter of 2022, with $0.4 million of claim gains in the first quarter of 2023 compared to none in the second quarter periods.

“Consumer deposit related fees and wealth management income for the current quarter exceed second quarter 2022 results by 7.7% and 8.7%, respectively,” said Small “As previously mentioned, our consumer client activity remains robust and the current equity and fixed income markets bode well for the asset management function over the remainder of the year.”

Non-interest expenses

Excluding transaction costs for the insurance agency sale, non-interest expenses in the second quarter of 2023 were $40.8 million, a 4.6% decrease from $42.8 million in the first quarter of 2023 but a 4.5% increase from $39.1 million in the second quarter of 2022. Compensation and benefits were $24.2 million in the second quarter of 2023, compared to $25.7 million in the first quarter of 2023 and $22.3 million in the second quarter of 2022. The linked quarter decrease was primarily due to cost saving initiatives that began during the second quarter of 2023. The year-over-year increase was primarily due to costs related to higher staffing levels for our 2022 growth initiatives and higher base compensation, including 2022 mid-year adjustments and 2023 annual adjustments. Other expenses decreased $0.5 million on a linked quarter basis due to cost saving initiatives, and all other non-interest expenses increased a net $83 thousand on a linked quarter basis. FDIC premiums increased $1.0 million on a year-over-year basis due to higher rates and our 2022 growth initiatives and all other non-interest expenses decreased a net $1.1 million on a year-over-year basis due to cost saving initiatives. The efficiency ratio (excluding transaction costs and the FIG gain on sale) for the second quarter of 2023 of 57.5% improved from 60.9% in the first quarter of 2023 due to cost saving initiatives but worsened from 52.2% in the second quarter of 2022 due to lower revenues.

“Executing on our cost saving initiatives helped drive an almost 5% decrease in expenses excluding transaction costs and a 3.4% improvement to our core efficiency ratio from the prior quarter,” said Paul Nungester, CFO of Premier. “We currently estimate full year core expenses to be $158 million, down $5 million from our prior estimate of $163 million, including $6 million due to the sale of our insurance agency offset by $1 million of other costs including higher FDIC premiums.”

Credit quality

Non-performing assets totaled $37.6 million, or 0.44% of assets, at June 30, 2023, an increase from $34.8 million at March 31, 2023, and from $35.2 million at June 30, 2022. Loan delinquencies increased to $19.0 million, or 0.27% of loans, at June 30, 2023, from $11.1 million at March 31, 2023, and from $11.2 million at June 30, 2022. Classified loans totaled $60.5 million, or 0.85% of loans, as of June 30, 2023, an increase from $44.9 million at March 31, 2023, and from $48.8 million at June 30, 2022.

The 2023 second quarter results include net recoveries of $0.2 million and a total provision expense of $0.5 million, compared with net loan charge-offs of $5.3 million and a total provision expense of $6.6 million for the same period in 2022. The prior year charge-offs were primarily due to the student loan servicer credit that had been previously fully reserved. The allowance for credit losses as a percentage of total loans was 1.13% at June 30, 2023, compared with 1.13% at March 31, 2023, and 1.14% at June 30, 2022. The allowance for credit losses as a percentage of total loans excluding PPP and including unaccreted acquisition marks was 1.16% at June 30, 2023, compared with 1.16% at March 31, 2023, and 1.21% at June 30, 2022. The continued economic improvement following the 2020 pandemic-related downturn has resulted in a year-over-year decrease in the allowance percentages.

Year to date results

For the six-month period ended June 30, 2023, net income totaled $66.5 million, or $1.86 per diluted common share, compared to $48.7 million, or $1.36 per diluted common share for the six months ended June 30, 2022. 2023 results include the impact of the insurance agency sale for a net gain on sale after transaction costs of $32.6 million pre-tax or $0.67 per diluted share after-tax. Excluding the impact of this item, first half 2023 earnings were $1.19 per diluted share.

Net interest income of $110.4 million on a TE basis for the first half of 2023 was down 6.0% from $117.4 million in the first half of 2022. The TE net interest margin of 2.81% in the first half of 2023 decreased 59 basis points from 3.40% in the first half of 2022. Results for all periods include the impact of PPP as well as acquisition marks and related accretion. First half 2023 includes $333 thousand of accretion in interest income, $433 thousand of accretion in interest expense, and $11 thousand of interest income on average balances of $818 thousand for PPP. Excluding the impact of acquisition marks accretion and PPP loans, core net interest income was $109.7 million, down 2.3% from $112.2 million in the first half of 2022. Additionally, the core net interest margin was 2.79% for the first half of 2023, down 47 basis points from 3.26% for the first half of 2022. These results are positively impacted by the combination of loan growth and higher loan yields, which were 4.76% for the first half of 2023 compared to 4.05% in the first half of 2022. The cost of funds in the first half of 2023 was 1.72%, up 151 basis points from the first half of 2022. The year-over-year increase is largely due to utilization of higher cost FHLB borrowings in support of loan growth in excess of deposit growth during 2022.

Excluding the $36.3 million gain on the sale of the insurance agency, total non-interest income in the first half of 2023 of $29.5 million was down 5.5% from $31.2 million in the first half of 2022. Mortgage banking income decreased $3.5 million year-over-year as a result of a $2.3 million decrease in gains primarily from lower production and margin as well as a $24 thousand MSR valuation gain in the second quarter of 2023 compared to a $1.5 million gain in the first half of 2022.

Security losses were $1.3 million in the first half of 2023, primarily due to decreased valuations on equity securities. This compares to a loss of $1.8 million from decreased valuations on equity securities in the first half of 2022. The company also sold $21 million of AFS securities for a $27 thousand gain with average yields less than FHLB borrowing rates during the first half of 2023. Service fees in the first half of 2023 were $13.6 million, a 7.4% increase from $12.7 million in the first half of 2022, primarily due to fluctuations in loan fees including commercial customer swap activity and consumer activity for interchange and ATM/NSF charges. Insurance commissions were $8.9 million in the first half of 2023 down slightly from $9.0 million in the first half of 2022 due to $0.9 million of contingent commissions in 2023 compared to $1.1 million in 2022. Wealth management income of $3.0 million in the first half of 2023 was up slightly from $2.9 million in the first half of 2022. BOLI income of $2.4 million in the first half of 2023 increased from $2.0 million in the first half of 2022 with $0.4 million of claim gains in the first half of 2023 compared to none in the first half of 2022.

Excluding transaction costs for the insurance agency sale, non-interest expenses in the first half of 2023 were $83.6 million, a 4.0% increase from $80.4 million in the first half of 2022. Compensation and benefits were $49.8 million in the first half of 2023, compared to $47.9 million in the first half of 2022. The year-over-year increase was primarily due to costs related to higher staffing levels for our 2022 growth initiatives and higher base compensation, including 2022 mid-year adjustments and 2023 annual adjustments, offset partly by cost saving initiatives that began during the second quarter of 2023. FDIC premiums increased $1.7 million on a year-over-year basis primarily due to higher rates and our 2022 growth initiatives. All other non-interest expenses decreased a net $0.4 million on a year-over-year basis. The efficiency ratio (excluding transaction costs and the FIG gain on sale) for the first half of 2023 of 59.2% worsened from 53.4% in the first half of 2022 due to lower revenues partly offset by cost saving initiatives that began during the second quarter of 2023.

The 2023 first half results include net loan charge-offs of $2.2 million and a total provision expense of $4.2 million, compared with net loan charge-offs of $5.2 million and a total provision expense of $7.5 million for the same period in 2022. The provision expense for both years is primarily due to relative loan growth.

Total assets at $8.62 billion

Total assets at June 30, 2023, were $8.62 billion, compared to $8.56 billion at March 31, 2023, and $8.01 billion at June 30, 2022. Loans receivable were $6.71 billion at June 30, 2023, compared to $6.58 billion at March 31, 2023, and $5.90 billion at June 30, 2022. At June 30, 2023, loans receivable increased $132.7 million on a linked quarter basis, or 8.1% annualized. Commercial loans excluding PPP increased by $75.2 million from March 31, 2023, or 7.0% annualized. Securities at June 30, 2023, were $0.97 billion, compared to $1.00 billion at March 31, 2023, and $1.15 billion at June 30, 2022. All securities are either AFS or trading and are reflected at fair value on the balance sheet. Also, at June 30, 2023, goodwill and other intangible assets totaled $309.9 million compared to $335.8 million at March 31, 2023, and $339.3 million at June 30, 2022, with the decreases attributable to intangibles amortization and the FIG sale.

Total non-brokered deposits at June 30, 2023, were $6.58 billion, compared with $6.62 billion at March 31, 2023, and $6.52 billion at June 30, 2022. At June 30, 2023, customer deposits increased $64.9 million on a year-over-year basis, or 1.0%. Brokered deposits were $413.2 million at June 30, 2023, compared to $154.9 million at March 31, 2023 and none at June 30, 2022.

Total stockholders’ equity was $937.0 million at June 30, 2023, compared to $914.5 million at March 31, 2023, and $901.1 million at June 30, 2022. The quarterly increase in stockholders’ equity was primarily due to net earnings after dividends including the impact of the insurance agency sale partly offset by a decrease in AOCI, which was primarily related to $12.1 million for a negative valuation adjustment on the AFS securities portfolio. The year-over-year increase was primarily due to net earnings after dividends including the impact the insurance agency sale offset partly by a decrease in AOCI, which was primarily related to $35.1 million of negative valuation adjustments on the AFS securities portfolio. At June 30, 2023, 1,199,634 common shares remained available for repurchase under the Company’s existing repurchase program.

Dividend to be paid August 11

The Board of Directors declared a quarterly cash dividend of $0.31 per common share payable August 11, 2023, to shareholders of record at the close of business on August 4, 2023. The dividend represents an annual dividend of 6.5 percent based on the Premier common stock closing price on July 24, 2023. Premier has approximately 35,730,000 common shares outstanding.

Conference call

Premier will host a conference call at 11:00 a.m. ET on Wednesday, July 26, 2023, to discuss the earnings results and business trends. The conference call may be accessed by calling 1-833-470-1428 and using access code 374150. Internet access to the call is also available (in listen-only mode) at the following URL: https://events.q4inc.com/attendee/827280709. The webcast replay of the conference call will be available at www.PremierFinCorp.com for one year.

About Premier Financial Corp.

Premier Financial Corp. (Nasdaq: PFC), headquartered in Defiance, Ohio, is the holding company for Premier Bank. Premier Bank, headquartered in Youngstown, Ohio, operates 75 branches and 9 loan offices in Ohio, Michigan, Indiana and Pennsylvania and also serves clients through a team of wealth professionals dedicated to each community banking branch. For more information, visit the company’s website at PremierFinCorp.com.

Financial Statements and Highlights Follow-

Safe Harbor Statement

This document may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements may include, but are not limited to, statements regarding projections, forecasts, goals and plans of Premier Financial Corp. and its management, future movements of interests, loan or deposit production levels, future credit quality ratios, future strength in the market area, and growth projections. These statements do not describe historical or current facts and may be identified by words such as “intend,” “intent,” “believe,” “expect,” “estimate,” “target,” “plan,” “anticipate,” or similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may,” “can,” or similar verbs. There can be no assurances that the forward-looking statements included in this presentation will prove to be accurate. In light of the significant uncertainties in the forward-looking statements, the inclusion of such information should not be regarded as a representation by Premier or any other persons, that our objectives and plans will be achieved. Forward-looking statements involve numerous risks and uncertainties, any one or more of which could affect Premier’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. These risks and uncertainties include, but not limited to: financial markets, our customers, and our business and results of operation; changes in interest rates; disruptions in the mortgage market; risks and uncertainties inherent in general and local banking, insurance and mortgage conditions; political uncertainty; uncertainty in U.S. fiscal or monetary policy; uncertainty concerning or disruptions relating to tensions surrounding the current socioeconomic landscape; competitive factors specific to markets in which Premier and its subsidiaries operate; increasing competition for financial products from other financial institutions and nonbank financial technology companies; future interest rate levels; legislative or regulatory rulemaking or actions; capital market conditions; security breaches or unauthorized disclosure of confidential customer or Company information; interruptions in the effective operation of information and transaction processing systems of Premier or Premier’s vendors and service providers; failures or delays in integrating or adopting new technology; the impact of the cessation of LIBOR interest rates and implementation of a replacement rate; and other risks and uncertainties detailed from time to time in our Securities and Exchange Commission (SEC) filings, including our Annual Report on Form 10-K for the year ended December 31, 2022 and any further amendments thereto. All forward-looking statements made in this presentation are based on information presently available to the management of Premier and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by law. As required by U.S. GAAP, Premier will evaluate the impact of subsequent events through the issuance date of its June 30, 2023, consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause Premier to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

Non-GAAP Reporting Measures

We believe that net income, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider core net interest income, core net income and core pre-tax pre-provision income to be a useful supplemental measure of our operating performance. We define core net interest income as net interest income on a tax-equivalent basis excluding income from PPP loans and purchase accounting marks accretion. We define core net income as net income excluding the after-tax impact of the insurance agency gain on sale and related transaction costs. We define core pre-tax pre-provision income as pre-tax pre-provision income excluding the pre-tax impact of the insurance agency gain on sale and related transaction costs. We believe that these metrics are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the Company between periods or as compared to other financial institutions or other companies on a consistent basis without having to account for income from PPP loans, purchase accounting marks accretion or the insurance agency sale. Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and ratings agencies in the valuation, comparison, rating and investment recommendations of companies. Our management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by us, may not be comparable to similarly entitled items reported by other financial institutions or other companies. Please see the exhibits for reconciliations of our supplemental reporting measures.

Consolidated Balance Sheets (Unaudited)
Premier Financial Corp.
		June 30,				March 31,				December 31,				September 30,				June 30,
(in thousands)		2023				2023				2022				2022				2022
Assets
Cash and cash equivalents
Cash and amounts due from depositories		$	71,096			$	68,628			$	88,257			$	67,124			$	62,080
Interest-bearing deposits			50,631				88,399				39,903				37,868				72,314
			121,727				157,027				128,160				104,992				134,394
Available-for-sale, carried at fair value			961,123				998,128				1,040,081				1,063,713				1,140,466
Equity securities, carried at fair value			6,458				6,387				7,832				15,336				13,293
Securities investments			967,581				1,004,515				1,047,913				1,079,049				1,153,759
Loans (1)			6,708,568				6,575,829				6,460,620				6,207,708				5,890,823
Allowance for credit losses - loans			(75,921	)			(74,273	)			(72,816	)			(70,626	)			(67,074	)
Loans, net			6,632,647				6,501,556				6,387,804				6,137,082				5,823,749
Loans held for sale			128,079				119,604				115,251				129,142				145,092
Mortgage servicing rights			20,160				20,654				21,171				20,832				20,693
Accrued interest receivable			30,056				29,388				28,709				26,021				22,533
Federal Home Loan Bank stock			39,887				37,056				29,185				28,262				23,991
Bank Owned Life Insurance			171,856				170,841				170,713				169,728				168,746
Office properties and equipment			55,736				55,982				55,541				53,747				54,060
Real estate and other assets held for sale			561				393				619				416				462
Goodwill			295,602				317,988				317,988				317,948				317,948
Core deposit and other intangibles			14,298				17,804				19,074				19,972				21,311
Other assets			138,021				129,508				133,214				148,949				123,886
Total Assets		$	8,616,211			$	8,562,316			$	8,455,342			$	8,236,140			$	8,010,624
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits		$	1,573,837			$	1,649,726			$	1,869,509			$	1,826,511			$	1,786,516
Interest-bearing deposits			5,007,358				4,969,436				4,893,502				4,836,113				4,729,828
Brokered deposits			413,237				154,869				143,708				69,881				-
Total deposits			6,994,432				6,774,031				6,906,719				6,732,505				6,516,344
Advances from FHLB			455,000				658,000				428,000				411,000				380,000
Subordinated debentures			85,166				85,123				85,103				85,071				85,039
Advance payments by borrowers			26,045				26,300				34,188				33,511				40,344
Reserve for credit losses - unfunded commitments			5,708				6,577				6,816				7,061				6,755
Other liabilities			112,889				97,835				106,795				102,032				80,995
Total Liabilities			7,679,240				7,647,866				7,567,621				7,371,180				7,109,477
Stockholders’ Equity
Preferred stock			-				-				-				-				-
Common stock, net			306				306				306				306				306
Additional paid-in-capital			689,579				689,807				691,453				691,578				690,905
Accumulated other comprehensive income (loss)			(168,721	)			(153,709	)			(173,460	)			(181,231	)			(126,754	)
Retained earnings			547,336				510,021				502,909				488,305				470,779
Treasury stock, at cost			(131,529	)			(131,975	)			(133,487	)			(133,998	)			(134,089	)
Total Stockholders’ Equity			936,971				914,450				887,721				864,960				901,147
Total Liabilities and Stockholders’ Equity		$	8,616,211			$	8,562,316			$	8,455,342			$	8,236,140			$	8,010,624
(1) Includes PPP loans of:		$	577			$	791			$	1,143			$	1,181			$	4,561

Consolidated Statements of Income (Unaudited)
Premier Financial Corp.
		Three Months Ended																				Six Months Ended
(in thousands, except per share amounts)		6/30/23				3/31/23				12/31/22				9/30/22			6/30/22					6/30/23				6/30/22
Interest Income:
Loans		$	81,616			$	76,057			$	72,194			$	65,559		$	56,567				$	157,674			$	111,808
Investment securities			6,997				7,261				7,605				6,814			6,197					14,257				11,676
Interest-bearing deposits			641				444				444				221			120					1,085				166
FHLB stock dividends			905				394				482				510			174					1,299				233
Total interest income			90,159				84,156				80,725				73,104			63,058					174,315				123,883
Interest Expense:
Deposits			26,825				21,458				13,161				6,855			2,671					48,283				4,893
FHLB advances			8,217				5,336				3,941				2,069			527					13,554				540
Subordinated debentures			1,125				1,075				1,000				868			763					2,199				1,459
Notes Payable			-				-				4				-			1					-				1
Total interest expense			36,167				27,869				18,106				9,792			3,962					64,036				6,893
Net interest income			53,992				56,287				62,619				63,312			59,096					110,279				116,990
Provision (benefit) for credit losses - loans			1,410				3,944				3,020				3,706			5,151					5,354				5,777
Provision (benefit) for credit losses - unfunded commitments			(870	)			(238	)			(246	)			306			1,415					(1,108	)			1,724
Total provision (benefit) for credit losses			540				3,706				2,774				4,012			6,566					4,246				7,501
Net interest income after provision			53,452				52,581				59,845				59,300			52,530					106,033				109,489
Non-interest Income:
Service fees and other charges			7,190				6,428				6,632				6,545			6,676					13,618				12,676
Mortgage banking income			2,940				(274	)			(299	)			3,970			1,948					2,666				6,200
Gain (loss) on sale of non-mortgage loans			71				-				-				-			-					71				-
Gain on sale of insurance agency			36,296				-				-				-			-					36,296				-
Gain (loss) on sale of available for sale securities			(7	)			34				1				-			-					27				-
Gain (loss) on equity securities			71				(1,445	)			1,209				43			(1,161	)				(1,374	)			(1,804	)
Insurance commissions			4,131				4,725				3,576				3,488			4,334					8,856				8,973
Wealth management income			1,537				1,485				1,582				1,355			1,414					3,022				2,891
Income from Bank Owned Life Insurance			1,015				1,417				984				983			983					2,432				1,979
Other non-interest income			102				92				543				320			171					194				313
Total Non-interest Income			53,346				12,462				14,228				16,704			14,365					65,808				31,228
Non-interest Expense:
Compensation and benefits			24,175				25,658				24,999				24,522			22,334					49,833				47,875
Occupancy			3,320				3,574				3,383				3,463			3,494					6,894				7,194
FDIC insurance premium			1,786				1,288				1,276				976			802					3,074				1,395
Financial institutions tax			961				852				795				1,050			1,074					1,813				2,265
Data processing			3,640				3,863				3,882				3,121			3,442					7,503				6,777
Amortization of intangibles			1,223				1,270				1,293				1,338			1,380					2,493				2,818
Transaction costs			3,652				-				-				-			-					3,652				-
Other non-interest expense			5,738				6,286				7,400				6,629			6,563					12,024				12,060
Total Non-interest Expense			44,495				42,791				43,028				41,099			39,089					87,286				80,384
Income before income taxes			62,303				22,252				31,045				34,905			27,806					84,555				60,333
Income tax expense			13,912				4,103				5,770				6,710			5,446					18,015				11,616
Net Income		$	48,391			$	18,149			$	25,275			$	28,195		$	22,360				$	66,540			$	48,717
Earnings per common share:
Basic		$	1.35			$	0.51			$	0.71			$	0.79		$	0.63				$	1.86			$	1.36
Diluted		$	1.35			$	0.51			$	0.71			$	0.79		$	0.63				$	1.86			$	1.36
Average Shares Outstanding:
Basic			35,722				35,606				35,589				35,582			35,560					35,686				35,768
Diluted			35,800				35,719				35,790				35,704			35,682					35,750				35,880

Premier Financial Corp.
Selected Quarterly Information
		Three Months Ended																					Six Months Ended
(dollars in thousands, except per share data)		6/30/23				3/31/23				12/31/22				9/30/22				6/30/22					6/30/23				6/30/22
Summary of Operations
Tax-equivalent interest income (1)		$	90,226			$	84,260			$	80,889			$	73,301			$	63,283				$	174,485			$	124,336
Interest expense			36,167				27,869				18,106				9,792				3,962					64,036				6,893
Tax-equivalent net interest income (1)			54,059				56,391				62,783				63,509				59,321					110,449				117,443
Provision expense for credit losses			540				3,706				2,774				4,012				6,566					4,246				7,501
Non-interest income (ex securities gains/losses)			53,282				13,873				13,018				16,661				15,526					67,155				33,032
Core non-interest income (ex securities gains/losses) (2)			16,986				13,873				13,018				16,661				15,526					30,859				33,032
Non-interest expense			44,495				42,791				43,028				41,099				39,089					87,286				80,384
Core non-interest expense (2)			40,843				42,791				43,028				41,099				39,089
Income tax expense			13,912				4,103				5,770				6,710				5,446					18,015				11,616
Net income			48,391				18,149				25,275				28,195				22,360					66,540				48,717
Core net income (2)			24,230				18,149				25,275				28,195				22,360					42,379				48,717
Tax equivalent adjustment (1)			67				104				164				197				225					170				453
At Period End
Total assets		$	8,616,211			$	8,562,316			$	8,455,342			$	8,236,140			$	8,010,624
Goodwill and intangibles			309,900				335,792				337,062				337,920				339,259
Tangible assets (3)			8,306,311				8,226,524				8,118,280				7,898,220				7,671,365
Earning assets			7,818,825				7,751,130				7,620,056				7,411,403				7,218,905
Loans			6,708,568				6,575,829				6,460,620				6,207,708				5,890,823
Allowance for loan losses			75,921				74,273				72,816				70,626				67,074
Deposits			6,994,432				6,774,031				6,906,719				6,732,505				6,516,344
Stockholders’ equity			936,971				914,450				887,721				864,960				901,147
Stockholders’ equity / assets			10.87	%			10.68	%			10.50	%			10.50	%			11.25	%
Tangible equity (3)			627,071				578,658				550,659				527,040				561,888
Tangible equity / tangible assets			7.55	%			7.03	%			6.78	%			6.67	%			7.32	%
Average Balances
Total assets		$	8,597,786			$	8,433,100			$	8,304,462			$	8,161,389			$	7,742,550				$	8,515,898			$	7,626,888
Earning assets			7,951,520				7,783,850				7,653,648				7,477,795				7,051,661					7,871,629				6,904,082
Loans			6,714,240				6,535,080				6,359,564				6,120,324				5,667,853					6,625,155				5,526,127
Deposits and interest-bearing liabilities			7,538,674				7,385,946				7,278,531				7,116,910				6,706,250					7,462,732				6,561,669
Deposits			6,799,605				6,833,521				6,773,382				6,654,328				6,385,857					6,816,469				6,350,235
Stockholders’ equity			921,441				901,587				875,287				912,224				921,847					911,569				961,873
Goodwill and intangibles			334,862				336,418				337,207				338,583				339,932					335,636				340,639
Tangible equity (3)			586,579				565,169				538,080				573,641				581,915					575,933				621,234
Per Common Share Data
Earnings per share ("EPS") - Basic		$	1.35			$	0.51			$	0.71			$	0.79			$	0.63				$	1.86			$	1.36
EPS - Diluted			1.35				0.51				0.71				0.79				0.63					1.86				1.36
EPS -  Core diluted (2)			0.68				0.51				0.71				0.79				0.63					1.19				1.36
Dividends Paid			0.31				0.31				0.30				0.30				0.30					0.62				0.60
Market Value:
High		$	21.01			$	27.80			$	30.51			$	29.36			$	30.13				$	27.99			$	32.52
Low			13.60				20.39				26.11				24.67				25.31					13.60				25.31
Close			16.02				20.73				26.97				25.70				25.35					16.02				30.91
Common Book Value			26.23				25.61				24.94				24.32				25.35
Tangible Common Book Value (3)			17.55				16.21				15.47				14.82				15.80
Shares outstanding, end of period (000s)			35,727				35,701				35,591				35,563				35,555
Performance Ratios (annualized)
Tax-equivalent net interest margin (1)			2.72	%			2.90	%			3.28	%			3.40	%			3.36	%				2.81	%			3.40	%
Return on average assets			2.26	%			0.86	%			1.21	%			1.37	%			1.16	%				1.58	%			1.29	%
Core return on average assets (2)			1.13	%			0.86	%			1.22	%			1.39	%			1.16	%				1.00	%			1.29	%
Return on average equity			21.06	%			8.07	%			11.46	%			12.26	%			9.73	%				14.72	%			10.21	%
Core return on average equity (2)			10.55	%			8.07	%			11.58	%			12.40	%			9.73	%				9.38	%			10.21	%
Return on average tangible equity			33.09	%			12.88	%			18.64	%			19.50	%			15.41	%				23.30	%			15.81	%
Core return on average tangible equity (2)			16.57	%			10.51	%			14.64	%			16.33	%			12.95	%				14.84	%			15.81	%
Efficiency ratio (4)			41.45	%			60.90	%			56.76	%			51.26	%			52.23	%				49.15	%			53.42	%
Core efficiency ratio (2)			57.49	%			60.90	%			56.76	%			51.26	%			52.23	%				59.19	%			53.42	%
Effective tax rate			22.33	%			18.44	%			18.59	%			19.22	%			19.59	%				21.31	%			19.25	%
Common dividend payout ratio			22.96	%			60.78	%			42.25	%			37.97	%			47.62	%				33.33	%			44.12	%
(1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 21%.
(2) Core items exclude the impact of insurance agency disposition related items. See non-GAAP reconciliations.
(3) Tangible assets = total assets less the sum of goodwill and core deposit and other intangibles. Tangible equity = total stockholders' equity less the sum of goodwill, core deposit and other intangibles, and preferred stock. Tangible common book value = tangible equity divided by shares outstanding at the end of the period.
(4) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.

Premier Financial Corp.
Yield Analysis
(dollars in thousands)		Three Months Ended																					Six Months Ended
		6/30/23				3/31/23				12/31/22				9/30/22				6/30/22					6/30/23				6/30/22
Average Balances
Interest-earning assets:
Loans receivable (1)		$	6,714,240			$	6,535,080			$	6,359,564			$	6,120,324			$	5,667,853				$	6,625,155			$	5,526,127
Securities			1,155,451				1,190,359				1,236,511				1,262,435				1,288,636					1,172,809				1,269,677
Interest Bearing Deposits			36,730				35,056				29,884				68,530				76,401					35,898				92,987
FHLB stock			45,099				30,353				28,386				27,414				19,334					37,767				15,667
Total interest-earning assets			7,951,520				7,790,848				7,654,345				7,478,703				7,052,224					7,871,629				6,904,458
Non-interest-earning assets			646,266				642,252				650,117				682,686				690,326					644,269				722,430
Total assets		$	8,597,786			$	8,433,100			$	8,304,462			$	8,161,389			$	7,742,550				$	8,515,898			$	7,626,888
Deposits and Interest-bearing Liabilities:
Interest bearing deposits		$	5,195,727			$	5,078,510			$	4,901,412			$	4,846,419			$	4,614,223				$	5,137,442			$	4,607,549
FHLB advances and other			653,923				467,311				419,761				377,533				234,945					561,133				126,215
Subordinated debentures			85,146				85,114				85,084				85,049				85,020					85,130				85,004
Notes payable			-				-				304				-				428					-				215
Total interest-bearing liabilities			5,934,796				5,630,935				5,406,561				5,309,001				4,934,616					5,783,705				4,818,983
Non-interest bearing deposits			1,603,878				1,755,011				1,871,970				1,807,909				1,771,634					1,679,027				1,742,686
Total including non-interest-bearing deposits			7,538,674				7,385,946				7,278,531				7,116,910				6,706,250					7,462,732				6,561,669
Other non-interest-bearing liabilities			137,671				145,567				150,644				132,255				114,453					141,597				103,346
Total liabilities			7,676,345				7,531,513				7,429,175				7,249,165				6,820,703					7,604,329				6,665,015
Stockholders' equity			921,441				901,587				875,287				912,224				921,847					911,569				961,873
Total liabilities and stockholders' equity		$	8,597,786			$	8,433,100			$	8,304,462			$	8,161,389			$	7,742,550				$	8,515,898			$	7,626,888
IEAs/IBLs			134	%			138	%			142	%			141	%			143	%				136	%			143	%
Interest Income/Expense
Interest-earning assets:
Loans receivable (2)		$	81,622			$	76,063			$	72,201			$	65,564			$	56,573				$	157,684			$	111,821
Securities (2)			7,058				7,359				7,762				7,006				6,416					14,417				12,116
Interest Bearing Deposits			641				444				444				221				120					1,085				233
FHLB stock			905				394				482				510				174					1,299				166
Total interest-earning assets			90,226				84,260				80,889				73,301				63,283					174,485				124,336
Deposits and Interest-bearing Liabilities:
Interest bearing deposits		$	26,825			$	21,458			$	13,161			$	6,855			$	2,671				$	48,283			$	4,893
FHLB advances and other			8,217				5,336				3,941				2,069				527					13,554				540
Subordinated debentures			1,125				1,075				1,001				868				763					2,199				1,459
Notes payable			-				-				3				-				1					-				1
Total interest-bearing liabilities			36,167				27,869				18,106				9,792				3,962					64,036				6,893
Non-interest bearing deposits			-				-				-				-				-					-				-
Total including non-interest-bearing deposits			36,167				27,869				18,106				9,792				3,962					64,036				6,893
Net interest income		$	54,059			$	56,391			$	62,783			$	63,509			$	59,321				$	110,449			$	117,443
Less: PPP income			(5	)			(6	)			(6	)			(26	)			(160	)				(11	)			(3,801	)
Less: Acquisition marks accretion			(380	)			(387	)			(554	)			(608	)			(706	)				(766	)			(1,443	)
Core net interest income		$	53,674			$	55,998			$	62,223			$	62,875			$	58,455				$	109,672			$	112,199
Annualized Average Rates
Interest-earning assets:
Loans receivable			4.86	%			4.66	%			4.54	%			4.29	%			3.99	%				4.76	%			4.05	%
Securities (3)			2.44	%			2.47	%			2.51	%			2.22	%			1.99	%				2.46	%			1.91	%
Interest Bearing Deposits			6.98	%			5.07	%			5.94	%			1.29	%			0.63	%				6.04	%			0.50	%
FHLB stock			8.03	%			5.19	%			6.79	%			7.44	%			3.60	%				6.88	%			2.12	%
Total interest-earning assets			4.54	%			4.33	%			4.23	%			3.92	%			3.59	%				4.43	%			3.60	%
Deposits and Interest-bearing Liabilities:
Interest bearing deposits			2.07	%			1.69	%			1.07	%			0.57	%			0.23	%				1.88	%			0.21	%
FHLB advances and other			5.03	%			4.57	%			3.76	%			2.19	%			0.90	%				4.83	%			0.86	%
Subordinated debentures			5.29	%			5.05	%			4.71	%			4.08	%			3.59	%				5.17	%			3.43	%
Notes payable			-				-				3.95	%			-				0.93	%				-				0.93	%
Total interest-bearing liabilities			2.44	%			1.98	%			1.34	%			0.74	%			0.32	%				2.21	%			0.29	%
Non-interest bearing deposits			-				-				-				-				-					-				-
Total including non-interest-bearing deposits			1.92	%			1.51	%			1.00	%			0.55	%			0.24	%				1.72	%			0.21	%
Net interest spread			2.10	%			2.35	%			2.89	%			3.18	%			3.27	%				2.22	%			3.31	%
Net interest margin (4)			2.72	%			2.90	%			3.28	%			3.40	%			3.36	%				2.81	%			3.40	%
Core net interest margin (4)			2.70	%			2.88	%			3.25	%			3.36	%			3.32	%				2.79	%			3.26	%
(1) Includes average PPP loans of:		$	673			$	965			$	1,160			$	1,889			$	12,966				$	818			$	22,855
(2) Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes.  In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 21%.
(3) Securities yield = annualized interest income divided by the average balance of securities, excluding average unrealized gains/losses.
(4) Net interest margin is tax equivalent net interest income divided by average interest-earning assets. Core net interest margin represents net interest margin excluding PPP and acquisition marks accretion.

Premier Financial Corp.
Deposits and Liquidity
(dollars in thousands)
		As of and for the Three Months Ended
		6/30/23				3/31/23				12/31/22				9/30/22				6/30/22
Ending Balances
Non-interest-bearing demand deposits		$	1,573,837			$	1,649,726			$	1,869,509			$	1,826,511			$	1,786,516
Savings deposits			748,392				775,186				797,376				817,853				830,048
Interest-bearing demand deposits			594,325				646,329				653,960				665,974				662,337
Money market account deposits			1,282,721				1,342,451				1,493,729				1,463,600				1,511,990
Time deposits			904,717				856,720				768,678				630,077				587,918
Public funds, ICS and CDARS deposits			1,477,203				1,348,750				1,179,759				1,258,610				1,137,536
Brokered deposits			413,237				154,869				143,708				69,881				-
Total deposits		$	6,994,432			$	6,774,031			$	6,906,719			$	6,732,505			$	6,516,344
Average Balances
Non-interest-bearing demand deposits		$	1,603,878			$	1,755,011			$	1,871,970			$	1,807,909			$	1,771,634
Savings deposits			762,074				782,215				806,653				825,673				833,323
Interest-bearing demand deposits			603,572				637,423				651,685				681,247				681,798
Money market account deposits			1,311,177				1,430,905				1,418,549				1,493,019				1,498,218
Time deposits			872,991				825,652				685,453				610,708				597,613
Public funds, ICS and CDARS deposits			1,399,749				1,232,230				1,235,772				1,204,968				1,003,271
Brokered deposits			246,164				170,085				103,300				30,804				-
Total deposits		$	6,799,605			$	6,833,521			$	6,773,382			$	6,654,328			$	6,385,857
Average Rates
Non-interest-bearing demand deposits			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Savings deposits			0.02	%			0.02	%			0.02	%			0.02	%			0.02	%
Interest-bearing demand deposits			0.10	%			0.07	%			0.07	%			0.07	%			0.05	%
Money market account deposits			1.73	%			1.54	%			0.81	%			0.40	%			0.18	%
Time deposits			2.27	%			1.83	%			1.05	%			0.58	%			0.45	%
Public funds, ICS and CDARS deposits			3.71	%			3.32	%			2.41	%			1.38	%			0.48	%
Brokered deposits			4.92	%			4.19	%			3.32	%			2.37	%			-
Total deposits			1.58	%			1.26	%			0.78	%			0.41	%			0.17	%
Other Deposits Data
Loans/Deposits Ratio			95.9	%			97.1	%			93.5	%			92.2	%			90.4	%
Uninsured deposits %			31.5	%			32.3	%			35.3	%			35.5	%			34.2	%
Adjusted uninsured deposits % (1)			17.3	%			19.6	%			22.2	%			22.2	%			22.0	%
Top 20 depositors %			12.4	%			12.1	%			5.4	%			11.3	%			10.0	%
Public funds %			17.5	%			16.5	%			14.8	%			15.9	%			14.1	%
Average account size (excluding brokered)		$	26.7			$	27.0			$	27.8			$	27.5			$	26.9
Securities Data
Held-to-maturity (HTM) at fair value		$	-			$	-			$	-			$	-			$	-
Available-for-sale (AFS) at fair value (2)			961,123				998,128				1,040,081				1,063,713				1,140,466
Equity investment at fair value (3)			6,458				6,387				7,832				15,336				13,293
Total securities at fair value		$	967,581			$	1,004,515			$	1,047,913			$	1,079,049			$	1,153,759
Cash+Securities/Assets			12.6	%			13.6	%			13.9	%			14.4	%			16.1	%
Projected AFS cash flow in next 12 months		$	64,687			$	73,184			$	73,319			$	76,119			$	74,558
AFS average life (years)			6.5				6.4				6.5				6.6				6.8
Liquidity Sources
Cash and cash equivalents		$	121,727			$	157,027			$	128,160			$	104,992			$	134,394
Unpledged securities at fair value			298,471				211,468				288,134				342,979				572,892
FHLB borrowing capacity			1,542,459				1,358,650				1,528,978				1,217,516				1,044,477
Brokered deposits (Company policy limit of 10%)			288,719				524,889				549,370				605,552				654,380
Bank and parent lines of credit			70,000				70,000				70,000				70,000				45,000
Federal Reserve - Discount Window and BTFP (4)			491,141				129,918				44,471				-				-
Total		$	2,812,517			$	2,451,952			$	2,609,113			$	2,341,039			$	2,451,143
Total liquidity to adjusted uninsured deposits ratio			230.5	%			183.2	%			168.9	%			155.4	%			169.0	%
(1) Adjusted for collateralized deposits, other insured deposits and intra-company accounts.
(2) Mark-to-market included in accumulated other comprehensive income.
(3) Mark-to-market included in net income each quarter.
(4) Includes borrowing capacity related to unpledged securities at par value in excess of fair value under Bank Term Funding Program.

Premier Financial Corp.
Loans and Capital
(dollars in thousands)
		6/30/23				3/31/23				12/31/22				9/30/22				6/30/22
Loan Portfolio Composition
Residential real estate		$	1,711,632			$	1,624,331			$	1,535,574			$	1,478,360			$	1,382,202
Residential real estate construction			111,708				141,209				176,737				119,204				85,256
Total residential loans			1,823,340				1,765,540				1,712,311				1,597,564				1,467,458
Commercial real estate			2,848,410				2,813,441				2,762,311				2,674,078				2,655,730
Commercial construction			472,328				440,510				428,743				398,044				319,590
Commercial excluding PPP			1,068,795				1,060,351				1,054,037				1,041,423				987,242
Core commercial loans (1)			4,389,533				4,314,302				4,245,091				4,113,545				3,962,562
Consumer direct/indirect			210,390				212,299				213,405				212,790				180,539
Home equity and improvement lines			272,792				271,676				277,613				272,367				266,144
Total consumer loans			483,182				483,975				491,018				485,157				446,683
Deferred loan origination fees			11,936				11,221				11,057				10,261				9,559
Core loans (1)			6,707,991				6,575,038				6,459,477				6,206,527				5,886,262
PPP loans			577				791				1,143				1,181				4,561
Total loans		$	6,708,568			$	6,575,829			$	6,460,620			$	6,207,708			$	5,890,823
Loans held for sale		$	128,079			$	119,631			$	115,251			$	129,142			$	145,092
Core residential loans (1)			1,951,419				1,885,171				1,827,562				1,726,706				1,612,550
Total loans including loans held for sale but excluding PPP			6,836,070				6,694,669				6,574,728				6,335,669				6,031,354
Undisbursed construction loan funds - residential		$	102,198			$	157,934			$	209,306			$	231,598			$	239,748
Undisbursed construction loan funds - commercial			353,455				446,294				463,469				493,199				449,101
Undisbursed construction loan funds - total			455,653				604,228				672,775				724,797				688,849
Total construction loans including undisbursed funds		$	1,039,689			$	1,185,947			$	1,278,255			$	1,242,045			$	1,093,695
Gross loans (2)		$	7,152,285			$	7,168,836			$	7,122,338			$	6,922,244			$	6,570,113
Fixed rate loans %			49.8	%			49.5	%			48.8	%			48.7	%			47.4	%
Floating rate loans %			15.9	%			13.4	%			14.3	%			16.0	%			18.3	%
Adjustable rate loans repricing within 1 year %			1.5	%			2.0	%			2.6	%			0.8	%			2.5	%
Adjustable rate loans repricing over 1 year %			32.8	%			35.1	%			34.3	%			34.5	%			31.8	%
Commercial Real Estate Loans Composition
Non owner occupied excluding office		$	1,012,400			$	947,442			$	934,760			$	905,512			$	899,129
Non owner occupied office			225,046				220,668				222,300				203,565				210,164
Owner occupied excluding office			603,650				609,203				578,514				570,662				556,482
Owner occupied office			107,240				109,014				108,087				105,224				104,968
Multifamily			633,909				661,996				660,823				637,701				634,782
Agriculture land			123,104				122,384				125,384				122,416				120,633
Other commercial real estate			143,061				142,734				132,443				128,998				129,572
Total commercial real estate loans		$	2,848,410			$	2,813,441			$	2,762,311			$	2,674,078			$	2,655,730
Capital Balances
Total equity		$	936,971			$	914,450			$	887,721			$	864,960			$	901,147
Less: Regulatory goodwill and intangibles			304,818				330,711				331,981				332,839				334,177
Less: Accumulated other comprehensive income/(loss) ("AOCI")			(168,721	)			(153,709	)			(173,460	)			(181,231	)			(126,754	)
Common equity tier 1 capital ("CET1")			800,874				737,448				729,200				713,352				693,724
Add: Tier 1 subordinated debt			35,000				35,000				35,000				35,000				35,000
Tier 1 capital			835,874				772,448				764,200				748,352				728,724
Add: Regulatory allowances			80,812				80,003				78,780				76,530				72,648
Add: Tier 2 subordinated debt			50,000				50,000				50,000				50,000				50,000
Total risk-based capital		$	966,686			$	902,451			$	892,980			$	874,882			$	851,372
Total risk-weighted assets		$	7,409,304			$	7,370,704			$	7,355,979			$	7,385,877			$	7,095,366
Capital Ratios
CET1 Ratio			10.81	%			10.01	%			9.91	%			9.66	%			9.78	%
CET1 Ratio including AOCI			8.53	%			7.92	%			7.55	%			7.20	%			7.99	%
Tier 1 Capital Ratio			11.28	%			10.48	%			10.39	%			10.13	%			10.27	%
Tier 1 Capital Ratio including AOCI			9.00	%			8.39	%			8.03	%			7.68	%			8.48	%
Total Capital Ratio			13.05	%			12.24	%			12.14	%			11.85	%			12.00	%
Total Capital Ratio including AOCI			10.77	%			10.16	%			9.78	%			9.39	%			10.21	%
(1)  Core loans represents total loans excluding undisbursed loan funds, deferred loan origination fees and PPP loans. Core commercial loans represents total commercial real estate, commercial and commercial construction excluding commercial undisbursed loan funds, deferred loan origination fees and PPP loans. Core residential loans represents total loans held for sale, one to four family residential real estate and residential construction excluding residential undisbursed loan funds and deferred loan origination fees.
(2) Gross loans represent total loans including undisbursed construction funds but excluding deferred loan origination fees.

Premier Financial Corp.
Loan Delinquency Information
(dollars in thousands)		Total Balance			Current			30 to 89 days past due			% of Total			Non Accrual Loans			% of Total
June 30, 2023
One to four family residential real estate		$	1,711,632		$	1,694,024		$	7,320		0.43	%		$	10,288		0.60	%
Construction			1,039,689			1,039,404			285		0.03	%			-		0.00	%
Commercial real estate			2,848,410			2,833,765			596		0.02	%			14,049		0.49	%
Commercial			1,069,372			1,057,057			4,290		0.40	%			8,025		0.75	%
Home equity and improvement			272,792			267,617			2,945		1.08	%			2,230		0.82	%
Consumer finance			210,390			204,404			3,587		1.70	%			2,399		1.14	%
Gross loans		$	7,152,285		$	7,096,271		$	19,023		0.27	%		$	36,991		0.52	%
March 31, 2023
One to four family residential real estate		$	1,624,331		$	1,611,658		$	4,514		0.28	%		$	8,159		0.50	%
Construction			1,185,947			1,185,803			144		0.01	%			-		0.00	%
Commercial real estate			2,813,441			2,799,007			88		0.00	%			14,346		0.51	%
Commercial			1,061,142			1,053,681			471		0.04	%			6,990		0.66	%
Home equity and improvement			271,676			266,931			2,404		0.88	%			2,341		0.86	%
Consumer finance			212,299			206,247			3,511		1.65	%			2,541		1.20	%
Gross loans		$	7,168,836		$	7,123,327		$	11,132		0.16	%		$	34,377		0.48	%
June 30, 2022
One to four family residential real estate		$	1,382,202		$	1,367,037		$	7,176		0.52	%		$	7,989		0.58	%
Construction			1,093,695			1,093,695			-		0.00	%			-		0.00	%
Commercial real estate			2,655,730			2,641,216			1		0.00	%			14,513		0.55	%
Commercial			991,803			984,065			-		0.00	%			7,738		0.78	%
Home equity and improvement			266,144			261,576			1,943		0.73	%			2,625		0.99	%
Consumer finance			180,539			176,608			2,061		1.14	%			1,870		1.04	%
Total loans		$	6,570,113		$	6,524,197		$	11,181		0.17	%		$	34,735		0.53	%
Loan Risk Ratings Information
(dollars in thousands)		Total Balance			Pass Rated			Special Mention			% of Total			Classified			% of Total
June 30, 2023
One to four family residential real estate		$	1,700,468		$	1,689,666		$	484		0.03	%		$	10,318		0.61	%
Construction			1,039,689			1,031,356			8,333		0.80	%			-		0.00	%
Commercial real estate			2,847,035			2,797,688			20,751		0.73	%			28,596		1.00	%
Commercial			1,063,744			1,021,403			27,376		2.57	%			14,965		1.41	%
Home equity and improvement			270,722			269,038			-		0.00	%			1,684		0.62	%
Consumer finance			210,158			207,963			-		0.00	%			2,195		1.04	%
PCD loans			20,469			13,981			3,786		18.50	%			2,702		13.20	%
Gross loans		$	7,152,285		$	7,031,095		$	60,730		0.85	%		$	60,460		0.85	%
March 31, 2023
One to four family residential real estate		$	1,612,999		$	1,604,694		$	493		0.03	%		$	7,812		0.48	%
Construction			1,185,947			1,185,947			-		0.00	%			-		0.00	%
Commercial real estate			2,811,999			2,748,598			41,677		1.48	%			21,724		0.77	%
Commercial			1,055,829			1,015,416			33,090		3.13	%			7,323		0.69	%
Home equity and improvement			269,455			267,588			-		0.00	%			1,867		0.69	%
Consumer finance			212,043			209,566			-		0.00	%			2,477		1.17	%
PCD loans			20,564			13,177			3,683		17.91	%			3,704		18.01	%
Gross loans		$	7,168,836		$	7,044,986		$	78,943		1.10	%		$	44,907		0.63	%
June 30, 2022
One to four family residential real estate		$	1,370,167		$	1,361,875		$	1,244		0.09	%		$	7,048		0.51	%
Construction			1,093,695			1,093,695			-		0.00	%			-		0.00	%
Commercial real estate			2,654,003			2,551,971			77,224		2.91	%			24,808		0.93	%
Commercial			984,972			956,229			21,428		2.18	%			7,315		0.74	%
Home equity and improvement			263,330			261,530			-		0.00	%			1,800		0.68	%
Consumer finance			180,183			178,346			-		0.00	%			1,837		1.02	%
PCD loans			23,763			17,632			95		0.40	%			6,036		25.40	%
Total loans		$	6,570,113		$	6,421,278		$	99,991		1.52	%		$	48,844		0.74	%

Premier Financial Corp.
Mortgage and Credit Information
(dollars in thousands)
		As of and for the Three Months Ended																					Six Months Ended
Mortgage Banking Summary		6/30/23				3/31/23				12/31/22				9/30/22				6/30/22					6/30/23				6/30/22
Revenue from sales and servicing of mortgage loans:
Mortgage banking gains, net		$	2,242			$	(837	)		$	(1,285	)		$	3,363			$	1,166				$	1,405			$	3,710
Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue			1,845				1,888				1,862				1,861				1,862					3,733				3,741
Amortization of mortgage servicing rights			(1,277	)			(1,219	)			(1,271	)			(1,350	)			(1,375	)				(2,496	)			(2,778	)
Mortgage servicing rights valuation adjustments			130				(106	)			396				96				295					24				1,527
			698				563				987				607				782					1,261				2,490
Total revenue from sale/servicing of mortgage loans		$	2,940			$	(274	)		$	(298	)		$	3,970			$	1,948				$	2,666			$	6,200
Mortgage servicing rights:
Balance at beginning of period		$	21,447			$	21,858			$	21,915			$	21,872			$	22,189				$	21,858			$	22,244
Loans sold, servicing retained			653				808				1,214				1,393				1,059					1,461				2,407
Amortization			(1,277	)			(1,219	)			(1,271	)			(1,350	)			(1,375	)				(2,496	)			(2,778	)
Balance at end of period			20,823				21,447				21,858				21,915				21,873					20,823				21,873
Valuation allowance:
Balance at beginning of period			(793	)			(687	)			(1,083	)			(1,179	)			(1,474	)				(687	)			(2,707	)
Impairment recovery (charges)			130				(106	)			396				96				295					24				1,527
Balance at end of period			(663	)			(793	)			(687	)			(1,083	)			(1,179	)				(663	)			(1,180	)
Net carrying value at end of period		$	20,160			$	20,654			$	21,171			$	20,832			$	20,693				$	20,160			$	20,693
Allowance for credit losses - loans
Beginning allowance		$	74,273			$	72,816			$	70,626			$	67,074			$	67,195				$	72,816			$	66,468
Provision (benefit) for credit losses - loans			1,410				3,944				3,020				3,706				5,151					5,354				5,777
Net recoveries (charge-offs)			238				(2,487	)			(830	)			(154	)			(5,272	)				(2,249	)			(5,171	)
Ending allowance		$	75,921			$	74,273			$	72,816			$	70,626			$	67,074				$	75,921			$	67,074
Total loans		$	6,708,568			$	6,575,829			$	6,460,620			$	6,207,708			$	5,890,823
Less: PPP loans			(577	)			(791	)			(1,143	)			(1,181	)			(4,561	)
Total loans ex PPP		$	6,707,991			$	6,575,038			$	6,459,477			$	6,206,527			$	5,886,262
Allowance for credit losses (ACL)		$	75,921			$	74,273			$	72,816			$	70,626			$	67,074
Add: Unaccreted purchase accounting marks			1,901				2,301				2,706				3,291				3,924
Adjusted ACL		$	77,822			$	76,574			$	75,522			$	73,917			$	70,998
ACL/Loans			1.13	%			1.13	%			1.13	%			1.14	%			1.14	%
Adjusted ACL/Loans ex PPP			1.16	%			1.16	%			1.17	%			1.19	%			1.21	%
Credit Quality
Total non-performing loans (1)		$	36,991			$	34,377			$	33,822			$	33,137			$	34,735
Real estate owned (REO)			561				393				619				416				462
Total non-performing assets (2)		$	37,552			$	34,770			$	34,441			$	33,553			$	35,197
Net charge-offs (recoveries)			(238	)			2,487				830				154				5,272
Allowance for credit losses / non-performing assets			202.18	%			213.61	%			211.42	%			210.49	%			190.57	%
Allowance for credit losses / non-performing loans			205.24	%			216.05	%			215.29	%			213.13	%			193.10	%
Non-performing assets / loans plus REO			0.56	%			0.53	%			0.53	%			0.54	%			0.60	%
Non-performing assets / total assets			0.44	%			0.41	%			0.41	%			0.41	%			0.44	%
Net charge-offs / average loans (annualized)			-0.01	%			0.15	%			0.05	%			0.01	%			0.37	%
Net charge-offs / average loans LTM			0.14	%			0.14	%			0.10	%			0.26	%			0.27	%
(1)  Non-performing loans consist of non-accrual loans.
(2)  Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof.

Premier Financial Corp.
Non-GAAP Reconciliations
		Three Months Ended																					Six Months Ended
(In thousands, except per share and ratio data)		6/30/23				3/31/23				12/31/22				9/30/22				6/30/22					6/30/23				6/30/22
Total non-interest expenses		$	44,495			$	42,791			$	43,028			$	41,099			$	39,089				$	87,286			$	80,384
Less: Transaction costs (pre-tax)			3,652				-				-				-				-					3,652				-
Core non-interest expenses		$	40,843			$	42,791			$	43,028			$	41,099			$	39,089				$	83,634			$	80,384
Non-interest income		$	53,346			$	12,462			$	14,228			$	16,704			$	14,365				$	65,808			$	31,228
Less: Gain on sale of insurance agency (pre-tax)			36,296				-				-				-				-					36,296				-
Core non-interest income		$	17,050			$	12,462			$	14,228			$	16,704			$	14,365				$	29,512			$	31,228
Less: Securities gains (losses)			64				(1,411	)			1,210				43				(1,161	)				(1,347	)			(1,804	)
Core non-interest income (ex securities gains/losses)		$	16,986			$	13,873			$	13,018			$	16,661			$	15,526				$	30,859			$	33,032
Tax-equivalent net interest income		$	54,059			$	56,391			$	62,783			$	63,509			$	59,321				$	110,449			$	117,443
Core non-interest income (ex securities gains/losses)			16,986				13,873				13,018				16,661				15,526					30,859				33,032
Total core revenues			71,045				70,264				75,801				80,170				74,847					141,308				150,475
Core non-interest expenses		$	40,843			$	42,791			$	43,028			$	41,099			$	39,089				$	83,634			$	80,384
Core efficiency ratio			57.49	%			60.90	%			56.76	%			51.26	%			52.23	%				59.19	%			53.42	%
Income (loss) before income taxes		$	62,303			$	22,252			$	31,045			$	34,905			$	27,806				$	84,555			$	60,333
Add: Provision (benefit) for credit losses			540				3,706				2,774				4,012				6,566					4,246				7,501
Pre-tax pre-provision income			62,843				25,958				33,819				38,917				34,372					88,801				67,834
Add: Transaction costs (pre-tax)			3,652				-				-				-				-					3,652				-
Less: Gain on sale of insurance agency (pre-tax)			36,296				-				-				-				-					36,296				-
Core pre-tax pre-provision income		$	30,199			$	25,958			$	33,819			$	38,917			$	34,372				$	56,157			$	67,834
Average total assets		$	8,597,786			$	8,433,100			$	8,304,462			$	8,161,389			$	7,742,550				$	8,515,898			$	7,626,888
Core pre-tax pre-provision return on average assets			1.41	%			1.25	%			1.62	%			1.89	%			1.78	%				1.33	%			1.79	%
Net income (loss)		$	48,391			$	18,149			$	25,275			$	28,195			$	22,360				$	66,540			$	48,717
Less: Gain on sale of insurance agency (pre-tax)			36,296				-				-				-				-					36,296				-
Add: Transaction costs (pre-tax)			3,652				-				-				-				-					3,652				-
Add: Tax impact of sale transaction			8,483				-				-				-				-					8,483				-
Core net income		$	24,230			$	18,149			$	25,275			$	28,195			$	22,360				$	42,379			$	48,717
Diluted shares - Reported			35,800				35,719				35,790				35,704				35,682					35,750				35,880
Core diluted EPS		$	0.68			$	0.51			$	0.71			$	0.79			$	0.63				$	1.19			$	1.36
Average total assets		$	8,597,786			$	8,433,100			$	8,304,462			$	8,161,389			$	7,742,550				$	8,515,898			$	7,626,888
Core return on average assets			1.13	%			0.87	%			1.21	%			1.37	%			1.16	%				1.00	%			1.29	%
Average total equity		$	921,441			$	901,587			$	875,287			$	912,224			$	921,847				$	911,569			$	961,873
Core return on average equity			10.55	%			8.16	%			11.46	%			12.26	%			9.73	%				9.38	%			10.21	%
Average total tangible equity		$	586,579			$	565,169			$	538,080			$	573,641			$	581,915				$	575,933			$	621,234
Core return on average tangible equity			16.57	%			13.02	%			18.64	%			19.50	%			15.41	%				14.84	%			15.81	%

 

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