Shares of Premier Financial Bancorp (PFBI) surged to a 52-week high Tuesday after the Huntington, W.Va., four-bank holding company reported a 69% increase in its first-quarter profit.

The $1.1 billion-asset Premier said it earned $2.8 million in the quarter, or 31 cents per share, compared to $1.7 million in last year's first quarter.

President and Chief Executive Robert Walker attributed the results to improved asset quality and cost savings associated with a recent data conversion.

Its net interest income rose nearly 16% year over year, due largely to deferred interests and discounts on nonaccrual loans that paid off during the quarter. The gain was also aided by a 21% reduction in its deposit costs stemming from continued low interest rates.

Premier also said its overhead costs fell 8% year over due to the reductions in data processing costs and reduced deposit insurance premiums. Premier last year combined five of its subsidiary banks in West Virginia, Virginia and Washington, D.C., into one bank and to further cut costs it is planning to combine its three banks in Kentucky and Ohio into a single bank.

In very heavy trading, Premier's shares were up 5.6% midday Tuesday, to $8.40. The shares had not traded above $8 in nearly two years.

Still, Walker warned in a news release that future results could be uneven due a "painfully slow" economic recovery and the challenge of unloading distressed assets at what he perceives to be "reasonable values."

Because of uncertain economic conditions, the company opted to increase its provision for loan losses by 83% year over year, to $950,000.

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