8-K

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) November 5, 2020
PEOPLES FINANCIAL CORPORATION (Exact Name of Registrant as Specified in its Charter)
Mississippi (State or Other Jurisdiction of Incorporation)
001-12103 (Commission File Number)	64-0709834 (IRS Employer Identification No.)
152 Lameuse Street Biloxi, MS (Address of Principal Executive Offices)	39530 (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 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 November 5, 2020, Peoples Financial Corporation issued a press release announcing its results for the third quarter of 2020.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release issued by Peoples Financial Corporation dated November 5, 2020, “Peoples Financial Corporation Reports Results for Third Quarter of 2020.”

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: November 5, 2020

PEOPLES FINANCIAL CORPORATION
By:	/s/ Chevis C. Swetman
	Chevis C. Swetman
	Chairman, President and CEO

EX-99.1

Exhibit 99.1: Peoples Financial Corporation Press Release Dated November 5, 2020

FOR IMMEDIATE RELEASE

For more information, contact:

Chevis C. Swetman, President and CEO 

228-435-8205

cswetman@thepeoples.com

PEOPLES FINANCIAL CORPORATION

REPORTS RESULTS FOR THIRD QUARTER OF 2020

BILOXI, MS (November 5, 2020)—Peoples Financial Corporation (OTCQX Best Market: PFBX), parent of The Peoples Bank, announced earnings for the third quarter ending September 30, 2020.

The company incurred a net loss of $4,262,000 for the third quarter of 2020 compared to net income of $476,000 for the third quarter of 2019. The loss per weighted average common share for the third quarter of 2020 was $0.87 compared to earnings per weighted average common share of $0.09 for the third quarter of 2019. Per share figures are based on weighted average common shares outstanding of 4,882,940 and 4,943,186 for the quarters ended September 30, 2020 and 2019, respectively.

The company incurred a net loss of $3,416,000 for the nine months ended September 30, 2020 compared to net income of $553,000 for the nine months ended September 30, 2019. The loss per weighted average common share for the nine months ended September 30, 2020 was $0.70 compared to earnings per weighted average common share of $0.11 for the nine months ended September 30, 2019. Per share figures are based on weighted average common shares outstanding of 4,898,051 and 4,943,186 for the nine months ended September 30, 2020 and 2019, respectively.

As a result of a charge-off of $5,429,000 relating to one credit, which is in bankruptcy, the company recorded a provision for loan losses of $4,551,000 during the third quarter of 2020. This loss, which is not related to COVID-19, is the result of specific events impacting this one customer whose loans had been on nonaccrual. The bankruptcy court approved a final order on September 4, 2020, approving the sale of this customer’s assets free and clear of all liens, claims, interests and encumbrances by private sale.

Also impacting the company’s financial performance in 2020 was an increase in non-interest income, including gains on the sale of securities, a gain on the sale of banking house and a gain from the redemption of death benefits on bank owned life insurance. Additionally, the company’s non-interest expense decreased during 2020 as strategies to reduce certain costs continue to be implemented.

“Our results for the third quarter of 2020 are disappointing,” said Chevis C. Swetman, chairman and chief executive officer of the holding company and the bank. He added, “Bank management took timely action to address one problem loan relationship, which was the prudent decision. While this move resulted in a net loss, asset quality has improved significantly as loans on nonaccrual and other real estate have decreased in 2020. We will continue to work to improve the financial position of the bank in the coming quarters.”

The company’s capital maintains its position as one of the highest in the Southeast United States. The company’s primary capital ratio was 15.36% at September 30, 2020, compared to 15.87% at September 30, 2019. The company’s book value per share was $19.43 and $19.08 at September 30, 2020 and 2019, respectively.

Founded in 1896, with $689 million in assets as of September 30, 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.

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.

PEOPLES FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS

(Unaudited)

(In thousands, except weighted average shares and per share figures)

EARNINGS SUMMARY	Three Months Ended September 30,					Nine Months Ended September 30,
	2020			2019		2020			2019
Net interest income	$	4,363		$	4,329	$	13,208		$	13,289
Provision for loan losses		4,551			59		5,948			169
Non-interest income		1,594			1,723		5,613			4,788
Non-interest expense		5,668			5,517		16,289			17,355
Net income (loss)		(4,262	)		476		(3,416	)		553
Earnings (loss) per share		(.87	)		.09		(.70	)		.11

TRANSACTIONS IN THE ALLOWANCE FOR LOAN LOSSES
	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Allowance for loan losses, beginning	$	5,329		$	4,946		$	4,207		$	5,340
Recoveries		63			38			184			122
Charge-offs		(5,542	)		(660	)		(5,938	)		(1,248	)
Provision for loan losses		4,551			59			5,948			169
Allowance for loan losses, ending	$	4,401		$	4,383		$	4,401		$	4,383

ASSET QUALITY	September 30,
	2020			2019
Allowance for loan losses as a percentage of loans		1.54	%		1.66	%
Loans past due 90 days and still accruing
Nonaccrual loans		3,955			9,473

PERFORMANCE RATIOS (annualized)	September 30,
	2020			2019
Return on average assets		(.70%	)		.12	%
Return on average equity		(4.80%	)		.81	%
Net interest margin		3.02	%		3.20	%
Efficiency ratio		127	%		97	%
Primary capital		15.36	%		15.87	%

BALANCE SHEET SUMMARY	September 30,
	2020		2019
Total assets	$	688,954	$	617,489
Loans		286,567		264,815
Securities		252,145		279,988
Other real estate (ORE)		4,721		7,606
Total deposits		571,718		501,446
Shareholders' equity		94,813		94,327
Book value per share		19.43		19.08
Weighted average shares		4,898,051		4,943,186