Premier Financial : Annual Report - 2022

Dear Fellow Shareholders:

On behalf of the Board of Directors and the entire Premier Financial Corp. team,

I thank you for your support and confidence in our organization and our mission to build a truly outstanding regional community bank.

Each year has its challenges. For 2022, the largest was navigating the effects of interest rate volatility influenced by the Federal Reserve's actions taken to address inflation concerns. Short-term rates have increased at an unprecedented pace, and we will continue to feel the effects in 2023.

Rest assured, we will strive to pivot as appropriate to strike the right balance of both near-term and long-term objectives, and remain laser focused on creating long-term franchise value.

Performance

Premier delivered strong financial results for 2022. Net income for the year totaled $102.2 million, or $2.85 per diluted share. Our return on average equity was 11.02%.

Loan growth for the year totaled $1.12 billion (up 20.5%) as new loan originations topped $3 billion. Deposit growth of 9.9% was a bright spot, as well as the fact that our clients' balance sheets remain very liquid. Credit metrics continue to outperform expectations as portfolio performance has outpaced historical measures. The overall growth we experienced truly reflects the strength of our client base and the markets in which we operate.

Our 2022 dividend payout of $1.20 represented a 14.3% increase vs. 2021.

Investments

2022 was a year of continued strategic investment for the organization. The four areas of focus for 2023 are:

• Improving our customers' experience - Customer satisfaction scores continue to climb in all markets.
• Delivering value-addedtechnology - Initiated a project to install a new digital banking (mobile and online banking) platform in 2023.
• Expanding our products and services - New cash management products developed with delivery in 2023 along with upgrading our ATM fleet.
• Investing in our team - Employee retention and engagement scores were at the highest levels we've experienced as Premier Bank as we closed out the year in 2022.

Recent Accolades

• Premier Financial Corp. was named to the KBW Honor Roll: Spotlight of Consistent Earnings Growth, which highlights banks that consistently deliver exceptional growth over the past 10 years. 2022 was the ninth consecutive year Premier Financial Corp. was named to this list of banking institutions.*
• Premier Bank received the "Doing Well by Doing Good Award" through the Mastercard Community Institutions Segment Awards for the Bank's commitment to making a difference in the communities we serve.
• Premier Bank was voted "Best Bank" in the Youngstown Vindicator Readers' Choice Awards.
• Premier Bank was voted "Best Bank" in The Courier's Best of Findlay.
• Premier Bank & First Insurance Group were each named a Top Workplace Winner by The Toledo Blade based on employee feedback.

These awards would not be possible without the efforts and good work of our employees.

*This award was received in 2022 for our 2021 performance.

As we look to 2023 and beyond, we will continue to focus on strategic growth, operational excellence and providing our clients a premier customer experience.

Sincerely,

President and CEO Premier Financial Corp.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Commission File Number 0-26850

PREMIER FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (419) 782-5015

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

• No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting stock held by non-affiliates of the registrant computed by reference to the closing price of such stock as of June 30, 2022, was approximately $882.8 million.

As of February 22, 2023, there were issued and outstanding 35,606,641 shares of the registrant's common stock.

Documents Incorporated by Reference

Part III of this Form 10-K incorporates by reference certain information from the registrant's definitive Proxy Statement for the 2023 Annual Meeting of the registrant's shareholders.

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PART I

Item 1. Business

Premier Financial Corp. ("Premier" or the "Company") is a bank holding company that conducts business through its wholly- owned subsidiaries, Premier Bank (the "Bank"), First Insurance Group of the Midwest, Inc. ("First Insurance"), PFC Risk Management Inc. ("PFC Risk Management") and PFC Capital, LLC ("PFC Capital"). All significant intercompany transactions and balances are eliminated in consolidation. Premier's stock is traded on the NASDAQ Global Select Market under the ticker PFC.

The Company's core business operations are conducted through its subsidiaries:

Premier Bank: The Bank is an Ohio state-chartered bank headquartered in Youngstown, Ohio. The Bank conducts operations through 74 full-service banking center offices, 12 loan offices and two wealth offices located in Ohio, Michigan, Indiana, Pennsylvania and West Virginia.

The Bank is primarily engaged in community banking. It attracts deposits from the general public through its offices and website, and uses those and other available sources of funds to originate residential real estate loans, commercial real estate loans, commercial loans, home improvement and home equity loans and consumer loans. In addition, the Bank invests in U.S. Treasury and federal government agency obligations, obligations of states and political subdivisions, mortgage-backed securities that are issued by federal agencies, including real estate mortgage investment conduits ("REMICs") and residential collateralized mortgage obligations ("CMOs"), and corporate bonds. The Bank's deposits are insured by the Federal Deposit Insurance Corporation ("FDIC"). The Bank is a member of the Federal Home Loan Bank ("FHLB") System.

First Insurance Group of the Midwest: First Insurance is a wholly-owned subsidiary of Premier that conducts business throughout Premiers' markets. First Insurance offers property and casualty insurance, life insurance and group health insurance.

PFC Risk Management: PFC Risk Management is a wholly-owned insurance company subsidiary of the Company that was formed to insure the Company and its subsidiaries against certain risks unique to the operations of the Company and for which insurance may not be currently available or economically feasible in today's insurance marketplace. PFC Risk Management pools resources with several other similar insurance company subsidiaries of financial institutions to help minimize the risk allocable to each participating insurer.

PFC Capital: PFC Capital provides mezzanine funding for customers of the Bank. Mezzanine loans are offered by PFC Capital to customers in the Company's market area and are expected to be repaid from the cash flow from operations of the borrowing businesses.

Premier's website, www.yourpremierfincorp.com, contains a hyperlink under the Investor Relations section to EDGAR, where the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge as soon as reasonably practicable after Premier has filed the report with the U. S. Securities and Exchange Commission ("SEC").

The Company's principal executive offices are located at 601 Clinton Street, Defiance, Ohio 43512, and its telephone number is (419) 782-5015.

Business Strategy

Premier's primary objective is to be a high-performing,community-focused financial institution, well regarded in its market areas. Premier accomplishes this through emphasis on local decision making and empowering its employees with tools and knowledge to serve its customers' needs. Premier believes in a "Customer First" philosophy that is strengthened by its Mission & Vision and Core Values initiatives. Premier also has a tagline of "Powered by People" as an indication of its commitment to local, responsive, personalized service. Premier believes this strategy results in greater customer loyalty and profitability through core relationships. Premier is focused on diversification of revenue sources and increased market penetration in areas where the growth potential exists for a balance between acquisition and organic growth. The primary elements of Premier's business strategy are commercial banking, consumer banking, the origination and sale of single-family residential loans, enhancement of fee income, wealth management and insurance sales, each united by a strong customer service culture throughout the organization.

Commercial and Commercial Real Estate Lending - Commercial and commercial real estate lending have been an ongoing focus and a major component of the Bank's success. The Bank primarily provides commercial real estate and commercial business loans with an emphasis on owner-occupied commercial real estate and commercial business lending, including a focus on the deposit balances that accompany these relationships. The Bank's client base tends to be small to middle market customers with annual gross revenues generally between $1 million and $50 million. These customers require the Bank to have a high degree of knowledge and understanding of their business in order to provide them with solutions for their financial needs. The Bank's "Customer First" philosophy and culture complement the needs of its clients. The Bank believes this personal service model differentiates the Bank from its competitors, particularly the larger regional institutions. The Bank offers a wide variety of products to support commercial clients including remote deposit capture and other cash management services. The Bank also believes that the small business customer is a strong market for the Bank. The Bank participates in many of the Small Business Administration lending programs. Maintaining a diversified portfolio with an emphasis on monitoring industry concentrations and reacting to changes in the credit characteristics of industries is an ongoing focus.

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