Primis Financial Corp. · NASDAQ:FRST
Primis Financial — Q1 2023 Earnings Presentation
24 slides from Primis Financial's earnings presentation, Apr 28, 2023
Slide 1: First Quarter 2023
First 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 overview and valuation
Corp. Headquarters: McLean, VA Bank Headquarters: Glen Allen, VA Branches: 32 Ticker (NASDAQ): FRST Valuation Market Capitalization: $222 million Price / Book Value per Share 0.55x Price / Tangible Book Value(1): 0.76x Price / 2023 Estimated EPS(2): 6.81x Price / 2024 Estimated EPS(2): 5.88x Dividen
Slide 5: Digital Platform Customers
• Broad launch beginning February 1 supported by digital Digital Platform Customers marketing • Tremendously successful, as of March 31: • $980 million of deposits (~11,500 customers) • 94% of funds raised prior to bank failures with limited attrition and continued growth after • Customers are in al
Slide 6: Balance sheet liquidity improvement
• Substantial improvement in balance sheet liquidity as of March 31: • Ratio of gross loans to deposits declined to 83% from 108% at year-end • Cash and equivalents at $607 million, up from $78 million at year-end • Repaid $340 million of short-term borrowings and listing agent CDs that matured in t
Slide 7: Panacea Financial: loan composition and Q1 summary
Q1’23 Loan Composition ($256.1 million) Q1’23 Summary • Total loan originations since launch of $323.9 million (committed bal.) • Q1’23 loan originations of $35.8 million 24.7% • Total deposits of $30.9 million, up 35% linked-quarter • March weighted average loan production yield of 8.36% 55.3% • So
Slide 8: Life Premium Finance key metrics
Key Portfolio Metrics $236.7 Million 22.1% $931.2 Million Loan Balances (Net of Fees) Q1 Loan Balance Growth Projected Balance at Maturity Key Performance Metrics Placement Ratio ORIGINATION CYCLE TIME SUBMISSIONS 61% 4 27 32 Carrier Approvals Average number of days Average weekly from submission to
Slide 9: Primis Mortgage update
• Now licensed in 40 states and D.C. • Small loss for Q1 ($212K) with breakeven profitability in February/March • Funded production of $123 million, up 43% from Q4’22 • Locked pipeline at March 31 up 110% from December 31 and growing entering home buying season • On track for $700 million to $1 bill
Slide 10: V1BE update and deposits per branch
Deposits per Branch $114,625 V1BE Coverage $84,635 $85,074 $74,522 $67,156 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 V1BE Update(1) • V1BE adoption/utilization continues to build with monthly transactions up 25% in Q1, primarily due to small-business 57% ~$108 million activity 4.88 % of V1BE Users Deposit balan
Slide 11: First Quarter Results
First Quarter Results
Slide 12: First quarter highlights
• Total deposits grew 34.7% un-annualized linked-quarter to $3.67 billion • Loans held for investment grew at an annualized rate of 13.1% in the first quarter compared to the linked-quarter, net of a decline in Paycheck Protection Program (“PPP”) balances • Successfully completed first Panacea loan
Slide 13: Total assets, loans, deposits and TCE/TA
Adjusted TCE/TA(2): $4,205 7.90% $3,668 9.57% $3,572 9.27% $3,357 $3,220 $3,237 8.73% 8.27% $3,044 $2,708 $2,949 $2,686 $2,683 $2,737 $2,722 $2,629 7.14% $2,394 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 (1) Total Assets Gross Loans Deposits TCE/TA Dollars in millions. (1) See reconciliation of Non-GAAP financia
Slide 14: Non-owner occupied CRE by collateral type
NOO CRE By Collateral Type Non-Owner Occupied Office CRE $ in Millions Total Outstanding % of Portfolio Excl PPP $136 Hotel $209 6.9% 4.5% Office $136 4.5% Retail $87 2.9% Assisted Living $46 1.5% Non-Owner Occupied Non-Office Mixed Use $22 0.7% CRE Warehouse/Industrial $22 0.7% $436 14.3% Daycare/S
Slide 15: Criticized and classified loans, NCOs and NPAs
• Nonperforming assets and classified loans decreased by $2.1 million and Criticized & Classified Loans / Total Loans (Ex. PPP) $1.5 million, respectively • ~83% of NPAs are in two relationships as previously discussed, one 3.54% of which is current as of March 31 3.08% 2.88% 2.35% • Net charge-offs
Slide 16: ACL walk forward and ACL / gross loans
ACL Walk Forward ACL / Gross Loans (Ex. PPP) 1.24% 1.16% 1.17% 1.17% 1.17% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 • Provision for credit losses of $5.2 million in Q1 versus provision of $7.9 million in Q4 • Provision includes $4.7 million related to third-party managed portfolio with credit enhancement • Pro
Slide 17: Deposit composition and core deposit growth
Deposit Composition – Q1’23 Core Deposit Growth(1) Time Deposits Demand Deposits 13.6% 13.6% 1.91% 1.43% $3,169 NOW Accounts Savings Accounts 22.8% $2,403 $2,257 $498 26.5% 0.92% 0.78% $1,943 $530 $583 $1,342 $441 0.48% $2,672 $339 $1,872 $1,675 Money Market $1,502 Accounts $1,003 23.6% 2019 2020 20
Slide 18: Net interest margin and net interest income trends
Net Interest Margin Trends Net Interest Income Progression $9 $(1) $18 $29,568 $28,411 $38 $27,432 $391 $24,568 3.68% 3.58% $22,463 3.67% 3.35% 3.57% 3.16% 3.33% 2.96% 3.15% 2.96% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Net Interest Income (Core) Non-Core Interest Income (1) Net Interest Margin Net Interest M
Slide 19: Non-interest expense and efficiency ratio
Non-Interest Expense (Ex. Res. for Unfunded Com. Expense) • Q1 NIE, excluding unfunded commitment expense, includes the following: • $0.9 million of expense due to third-party serviced loan $29,054 $27,306 $23,450 portfolio, down from $1.4 million last quarter $20,598 1,175 $18,727 $308 $873 • Mortg
Slide 20: Return on average assets and pre-tax pre-provision earnings
Return on Average Assets Pre-Tax Pre-Provision Operating Earnings 0.76% 1.31% 0.64% 1.20% 0.63% 0.61% 0.60% 0.60% 0.57% 0.55% 1.00% 0.99% 0.77% $12.64 0.36% $9.93 $8.54 $7.94 $6.33 0.09% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 (1) ROAA Operating ROAA PTPP Operating Earnings (1) P
Slide 21: 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 $11.86 $11.60 $11.61 $0.68 $0.72 $0.68 $0.61 $11.09 $0.23 $0.23 2019 2020 2021 2022 Q1'23 2019 2020 2021 2022 Q1'23 (1) EPS Adjusted EPS • Tangible book value per share reduced by $0.
Slide 22: Investment summary
• Talented management team and board committed to building long-term shareholder value • Attractive multi-pronged strategy for growth beginning to pay dividends • Aggressive and early use of technology positioning the bank for superior performance as the industry evolves • Significant valuation upsi
Slide 23: Appendix
Appendix 23
Slide 24: Reconciliation of Non-GAAP items
Primis Financial Corp. (Dollars in thousands, except per share data) For Three Months Ended: For Three Months Ended: Reconciliation of Non-GAAP items: 1Q 2023 4Q 2022 3Q 2022 2Q 2022 1Q 2022 1Q 2023 1Q 2022 Net income $ 5,775 $ 3,085 $ 5,054 $ 5,009 $ 4,593 $ 5,775 $ 4,593 Non-GAAP adjustments to Ne