Primis Financial Corp. · NASDAQ:FRST
Primis Financial — Q4 2023 Earnings Presentation
22 slides from Primis Financial's earnings presentation, Jan 26, 2024
Slide 1: Fourth Quarter 2023
Fourth 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: Company overview and valuation
Corp. Headquarters: McLean, VA Bank Headquarters: Glen Allen, VA Branches: 24 Ticker (NASDAQ): FRST Valuation Market Capitalization: $312 million Price / Book Value per Share 0.78x Price / Tangible Book Value(1): 1.03x Price / 2024 Estimated EPS(2): 9.22x Price / 2025 Estimated EPS(2): 7.80x Dividen
Slide 5: Fourth quarter highlights
• Operating return on average assets(1) was 89 basis points, up from 81 basis points in the third quarter of 2023 • Generated a margin of 3.36%, up from 3.01% linked quarter. Excluding accounting adjustments from a third-party managed portfolio, margin for the fourth quarter was 3.09%. • Opened over
Slide 6: V1BE update and deposits per branch
V1BE Update(1) Deposits per Branch(2) 62% ~$166 million 1,179 8,765 $140.9 % of V1BE Users Deposit balance of Users with 166 Q4 Transactions that are SMBs V1BE users added in Q4’23 $114.6 $114.5 $110.1 $85.1 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 • Attractive community bank deposit base with core bank cost o
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 update
Q4’23 Loan Composition ($322 million) Q4’23 Summary 15.2% • Life-to-date loan originations of ~$450 mil. (committed bal.) • Q4’23 originations of $36.7 mil., 7.91% weighted average yield • Sold $16 mil. of loans in Q4’23 with recognized gain of ~$300k • Total deposits of $56 mil., up 15.1%+ un-annua
Slide 9: Life Premium Finance key portfolio metrics
Key Portfolio Metrics $382.1 Million 5.9% 8.01% Loan Balances (Net of Fees) Q4 Loan Balance Growth yields on current pipeline Key Performance Metrics Placement Ratio ORIGINATION CYCLE TIME SUBMISSIONS 74% 3 Carrier Approvals 27 24 Average number of days Average weekly from submission to loan submiss
Slide 10: Primis Mortgage Company
• Pre-tax earnings for 2023: $333K • Aggressively managing costs to preserve profitability in lower volume environment • Funded production of $606 million in 2023 • Now licensed in 42 states and D.C. • Continue to add reliable performers using our culture and commitment to the industry versus signin
Slide 11: Fourth Quarter Results
Fourth Quarter Results
Slide 12: Total assets, loans, deposits and TCE/TA
$4,218 $3,869 $3,833 $3,876 $3,668 $3,569 $3,317 $3,293 $3,270 $3,194 $3,166 $3,214 $3,056 $2,947 $2,722 8.22% 7.99% 7.59% 7.67% 7.07% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 (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
NOO CRE By Collateral Type(1) Non-Owner Occupied Office CRE $147 Non-Owner-Occupied CRE by Type Total Outstanding % of Portfolio Excl PPP 4% Hotel $195 6.1% Office $147 4.6% Retail $92 2.9% Non-Owner Occupied Assisted Living $51 1.6% Non-Office CRE $439 All other $58 1.4% 14% Warehouse/Industrial $2
Slide 14: Asset quality: classified loans and charge-offs
• Nonperforming assets and classified loans decreased by $11.9 million and Criticized & Classified Loans / Total Loans (Ex. PPP) $9.8 million, respectively, from Q3’23 • Remaining NPLs roughly $7.7 million or 0.20% of assets at Q4 2.35% 2.14% • Net charge-offs of $5.0 million in Q4 1.99% 1.89% • Inc
Slide 15: ACL walk forward and coverage
ACL Walk Forward ACL / Gross Loans (Ex. PPP) 1.21% 1.17% 1.17% 1.13% 1.06% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 • Provision for credit losses of $3.1 million in Q4 versus provision of $1.6 million in Q3 • Provision includes $3.0 million related to third-party managed portfolio with credit enhancement • Pro
Slide 16: Deposit composition and core deposit growth
Deposit Composition – Q4’23 Core Deposit Growth(1) Time Deposits Demand Deposits 13.6% 14.5% 2.69% 1.43% 0.92% 0.78% $2,937 Savings Accounts 0.48% NOW Accounts 24.0% 23.6% $473 $2,403 $2,257 $1,943 $530 $583 $441 $1,342 $2,580 $339 $1,872 $1,675 Money Market $1,502 Accounts $1,003 24.3% 2019 2020 20
Slide 17: Net interest margin and net interest income trends
Net Interest Margin Trends Net Interest Income Progression 3.67% 3.36% 3.15% $30,256 $29,537 3.01% $28,493 2.64% $27,136 $26,235 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Net Interest Income Net Interest Margin • Net interest margin expanded to 3.36% from 3.01% in Q3. • Excluding $2.6 million and $0.4 million o
Slide 18: Noninterest expense
• Noninterest expense includes a number of items that are volatile Q-to-Q such as mortgage expenses (tied to volume), accounting Q4’23 Q3’23 Q4’22 YTD 2023 YTD 2022 adjustments for third-party managed portfolio (offset in net Reported Non-Interest Expense $29,836 $37,066 $29,106 $124,868 $92,376 int
Slide 19: Diluted EPS and tangible book value per share
(1) Diluted Earnings Per Common Share and Adjusted Diluted EPS Tangible Book Value Per Common Share $1.48 $1.32 $12.43 $1.26 $1.26 $12.23 $0.93 $11.60 $11.61 $0.72 $0.68 $0.68 $0.61 $11.09 $0.40 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 (1) EPS Adjusted EPS • Q4’23 diluted EPS of $0.33, up 1
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: For Twelve Months Ended: Reconciliation of Non-GAAP items: 4Q 2023 3Q 2023 2Q 2023 1Q 2023 4Q 2022 4Q 2023 4Q 2022 Net income (loss) attributable to Primis' common shareholders $ 8,121 $ (3,526) $ (268) $ 5,