Primis Financial Corp. · NASDAQ:FRST
Primis Financial — Q3 2023 Earnings Presentation
22 slides from Primis Financial's earnings presentation, Oct 27, 2023
Slide 1: Third Quarter 2023
Third Quarter 2023 NASDAQ: FRST
Slide 2: Forward-looking statements
This Presentation and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Secur
Slide 3: Non-GAAP financial measures
Statements included in this presentation include non-GAAP financial measures and should be read along with the accompanying tables. Primis uses non-GAAP financial measures to analyze its performance. The measures entitled net income adjusted for nonrecurring income and expenses; pre-tax pre-provisio
Slide 4: Corporate snapshot and valuation
Corp. Headquarters: McLean, VA Bank Headquarters: Glen Allen, VA Branches: 32 Ticker (NASDAQ): FRST Valuation Market Capitalization: $191 million Price / Book Value per Share 0.50x Price / Tangible Book Value(1): 0.66x Price / 2023 Estimated EPS(2): 10.77x Price / 2024 Estimated EPS(2): 5.80x Divide
Slide 5: Third quarter highlights
• Achieved an operating return on average assets of 81 basis points(1), up from 9 basis points in the second quarter and 64 basis points a year ago. • Generated a margin of 3.02%, up from 2.65% linked quarter due to sweeping off excess funds and tightly managing the balance sheet to maximize increme
Slide 6: V1BE update and deposits per branch
V1BE Update(1) Deposits per Branch(2) 62% ~$144 million 1,013 8,056 $146.8 % of V1BE Users Deposit balance of Users with 175 Q3 Transactions that are SMBs V1BE users added in Q3’23 $114.6 $114.5 $110.1 $84.6 $85.1 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q3'23 PF • Attractive community bank deposit base with c
Slide 7: Core bank and digital platform funding
• Core bank continues to provide highly attractive funding at levels generally better than peer and regional competition • Alternative sources for funding alleviate pressure to reprice the core bank to raise liquidity and proves thesis of digital strategy • Stable funding with essentially flat avera
Slide 8: Panacea Financial Q3'23 loan composition and outlook
Q3’23 Loan Composition ($299.3 million) Q3’23 Summary • Life-to-date loan originations of $407 mil. (committed bal.) 16.1% • Total deposits of $53.3 mil., up 15.1%+ un-annualized QoQ • PTPP Income +142% QoQ., with PTPP ROA of 1.77% • Sold $15.4 mil. of loans in Q3’23 with recognized gain of ~$400k 2
Slide 9: Life Premium Finance key metrics
Key Portfolio Metrics $360.7 Million 4.1% 8.12% Loan Balances (Net of Fees) Q3 Loan Balance Growth yields on current pipeline Key Performance Metrics Placement Ratio ORIGINATION CYCLE TIME SUBMISSIONS 28% 4 27 29 Carrier Approvals Average number of days Average weekly from submission to loan submiss
Slide 10: Primis Mortgage update
• Pre-tax earnings for Q3: $697K • Aggressively managing costs to preserve profitability in lower volume environment • Funded production of $169 million versus $184 million in Q2 • Locked pipeline at September 30, 2023 down 7% from June 30, 2023 • Now licensed in 43 states and D.C. • Continue to add
Slide 11: Third Quarter Results
Third Quarter Results
Slide 12: Total assets, loans, deposits and TCE/TA
$4,203 $3,848 $3,814 8.68% $3,668 8.22% $3,569 7.64% $3,355 7.10% $3,317 $3,293 7.72% $3,174 $3,146 $3,042 $2,947 $2,708$2,735 $2,722 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 (1) Total Assets Gross Loans Deposits TCE/TA Dollars in millions. (1) See reconciliation of Non-GAAP financial measures on slide 22. 12
Slide 13: Non-owner occupied CRE by collateral type
Non-Owner Occupied Office CRE NOO CRE By Collateral Type(1) $148 4.7% Non-Owner-Occupied CRE by Type Total Outstanding % of Portfolio Excl PPP Hotel $201 6.4% Office $148 4.7% Non-Owner Occupied Non- Retail $93 2.9% Office CRE Assisted Living $52 1.7% $447 All other $59 1.4% 14.2% Warehouse/Industri
Slide 14: Criticized and classified loans, NCOs and NPAs
• Nonperforming assets and classified loans decreased by $5.1 million and Criticized & Classified Loans / Total Loans (Ex. PPP) $4.9 million, respectively, from Q2’23 • Large remaining NPL relationship closed in October 2.88% • Remaining NPLs roughly $6.5 million or 0.17% of assets at Q3 2.35% 2.15%
Slide 15: ACL walk forward and ACL to gross loans
ACL Walk Forward ACL / Gross Loans (Ex. PPP) 1.21% 1.17% 1.17% 1.18% 1.14% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 • Provision for credit losses of $1.6 million in Q3 versus provision of $4.3 million in Q2 • Provision includes $2.1 million related to third-party managed portfolio with credit enhancement • Pro
Slide 16: Deposit composition and core deposit growth
Deposit Composition – Q3’23 Core Deposit Growth(1) Time Deposits Demand Deposits 13.7% 14.9% 2.60% 1.43% 0.92% 0.48% 0.78% Savings Accounts 22.7% $3,070 NOW Accounts 24.4% $491 $2,403 $2,257 $1,943 $530 $583 $1,342 $441 $339 $2,580 $1,872 $1,675 $1,502 Money Market $1,003 Accounts 24.3% 2019 2020 20
Slide 17: Net interest margin trends and net interest income
Net Interest Margin Trends Net Interest Income Progression 3.67% 3.57% $29,537 3.15% 3.02% $28,365 $27,415 2.65% $27,125 $26,157 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Net Interest Income Net Interest Margin • Net interest margin expanded to 3.02% from adjusted margin of 3.00% in Q2 (excluding excess liquidi
Slide 18: Non-interest expense and efficiency ratio
Non-Interest Expense (Ex. Res. for Unfunded Com. Expense & Goodwill Impairment) • Q3 NIE, excluding unfunded commitment expense and goodwill impairment, includes the following: • $0.3 million of expense due to third-party serviced loan portfolio, down from $0.5 million last quarter $1,175 $1,488 $30
Slide 19: Diluted EPS and tangible book value per share
Diluted Earnings Per Share and Adjusted Diluted EPS Tangible Book Value Per Share (1) $1.48 $1.32 $12.43 $1.26 $1.26 $11.60 $11.63 $11.53 $0.68 $0.72 $0.68 $0.61 $0.60 $11.09 $0.09 2019 2020 2021 2022 Q3'23 YTD 2019 2020 2021 2022 Q3'23 (1) EPS Adjusted EPS • Q3’23 diluted operating EPS of $0.32, up
Slide 20: Investment highlights
• Talented management team and board committed to building long-term shareholder value • Attractive core-funded community bank with a complementary digital funding platform • Aggressive and early use of technology positioning the Bank for superior performance as the industry evolves • Significant va
Slide 21: Appendix
Appendix 21
Slide 22: Reconciliation of Non-GAAP items
Primis Financial Corp. (Dollars in thousands, except per share data) For Three Months Ended: Reconciliation of Non-GAAP items: 3Q 2023 2Q 2023 1Q 2023 4Q 2022 3Q 2022 Net income $ (3,567) $ (188) $ 5,953 $ 3,040 $ 5,025 Non-GAAP adjustments to Net Income: Branch Consolidation / Other restructuring -