PR Newswire | Feb 22, 2021 03:38PM EST

Charged Off Loan

02/22 14:37 CST

Peoples Financial Corporation Announces Recovery Of $4,510,359 On Previously Charged Off Loan BILOXI, Miss., Feb. 22, 2021

BILOXI, Miss., Feb. 22, 2021 /PRNewswire/ --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-accrual10/25/19 Commercial business files bankruptcy6/30/20$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 $5,130,0009/30/20$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 Bank12/3/20 Motion to transfer funds filed by Peoples1/28/21 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 sharefigures)

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

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SOURCE Peoples Financial Corporation