Primis Financial Corp. · NASDAQ:FRST
Primis Financial — Q4 2022 Earnings Presentation
27 slides from Primis Financial's earnings presentation, Jan 26, 2023
Slide 1: Fourth Quarter 2022
Fourth Quarter 2022 NASDAQ: FRST Exhibit 99.2
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 from continuing operations adjusted for nonrecurring income and exp
Slide 4: Welcome to Primis
A pioneering bank, committed to imagining a faster and more convenient way to serve you. WELCOME TO PRIMIS Corp. Headquarters: McLean, VA Bank Headquarters: Glen Allen, VA Branches: 32 Ticker (NASDAQ): FRST Valuation Market Capitalization: $294 million Price / Book Value per Share 0.75x Price / Tang
Slide 5: Why Invest Now?
Talented management team and board committed to building long-term shareholder value Attractive multi-pronged strategy for growth Aggressive and early use of technology positioning the bank for superior performance as the industry evolves Poised for outsized EPS growth versus peers Business line inv
Slide 6: Timeline of transformation since 2020
Feb 2020 Immediately started building risk management teams and systems to repair strained regulatory relationships Jun 2020 Implemented the Company’s first objective incentive plan…all directed toward deposits Mar 2020 Ceased aggressive purchases of non-QM loans, hospitality lending and brokered CD
Slide 7: Path to Enhanced Profitability
Path to Enhanced Profitability Q4 Run Rate Earnings 2023 Potential PTPP Earnings Q4 earnings depressed by mortgage while other business lines (Panacea/Life Premium Finance) are hitting inflection points Mortgage will no longer be a drag beginning in Q1’23 (anticipated breakeven) with material contri
Slide 8: High Performing Community Bank and V1BE Update
High Performing Community Bank V1BE adoption/utilization continues to build with monthly transactions up 55% in Q4, primarily due to small-business activity Core market loan growth of 4.3% in Q4(2) Deposits per Branch (1) V1BE is a bank delivery app for on-demand ordering of branch services (2) Excl
Slide 9: Digital Platform Update
Digital Platform Update Soft consumer launch July 25, 2022 with marketing efforts beginning late Q3’22 Total platform deposits of $29.7 million as of December 31, 2022 Almost 50% of all new deposit accounts are being opened online instead of in the branches (versus almost all accounts opened in the
Slide 10: Primis Mortgage Update
Primis Mortgage Update Significant expansion of mortgage footings in a short period of time (now licensed in 39 states and D.C.) 35% increase in originations in Q4 vs Q3 despite headwinds from increasing rates and seasonal low point On track for $1 billion of mortgage production in 2023, even in the
Slide 11: Panacea Financial Update
$46.5 million growth in loan balances in Q4’22 Total 2022 loan originations of $229.8 mil. vs. original guidance of $125 - 150 mil. Now banking >1% of all new doctors in the U.S. Deposit growth of 69% unannualized in Q4’22 Opened >500 new checking and savings accounts in Q4’22 Cumulative NCOs since
Slide 12: Life Insurance Premium Finance Update
4 Life Insurance Premium Finance Update Key Portfolio Metrics Key Performance Metrics 29 Average number of days from submission to loan closing ORIGINATION CYCLE TIME Average Actual Primis Processing Time is ~4 Days Placement Ratio Carrier Approvals Top-Tier Partners Facilitators 67% 26 47 6 Average
Slide 13: Fourth Quarter Results
Fourth Quarter Results
Slide 14: Q4 2022 return on average assets highlights
Return on average assets from continuing operations of 0.36% for the three months ended December 31, 2022 versus 0.61% for the three months ended September 30, 2022 and 0.88% for the three months ended December 31, 2021. Operating return on average assets from continuing operations(1) of 0.09%, 0.64
Slide 15: Balance Sheet Trends
Dollars in millions. (1) See reconciliation of Non-GAAP financial measures on slide 27. Balance Sheet Trends
Slide 16: Lines of Business
Lines of Business Dollars in thousands. Net interest income, noninterest income and noninterest expense excludes $1.4 million, $1.8 million and $1.4 million, respectively, related to credit enhanced portfolio managed by a third party. (1) Net interest income assumes business line funding requirement
Slide 17: Loan Composition and Trends
Dollars in millions. Core excludes impact of PPP balances and net revenue impact of third-party managed portfolio. Loan Composition and Trends Loan Trends and Yields Q4’22 Loan Composition (Ex. PPP) Robust loan growth of 32% annualized, linked-quarter excluding PPP balances (30% annualized for 2022)
Slide 18: Asset Quality
Classified loans and NPAs exclude guaranteed portion of SBA loans. Core net charge-offs exclude losses covered by a third party. Asset Quality NPAs / Loans (Ex. PPP) + OREO NCOs / Average Loans Criticized & Classified Loans / Total Loans (Ex. PPP) Nonperforming assets and classified loans decreased
Slide 19: Allowance for Credit Losses
Allowance for Credit Losses ACL Walk Forward ACL / Gross Loans (Ex. PPP) Provision for credit losses of $7.9 million in Q4 versus provision of $2.9 million in Q3 Majority of provision due to impairment of one nonaccrual loan relationship that deteriorated in Q4 Provision also includes $1.8 million r
Slide 20: Deposit Trends
Dollars in millions. (1) Core deposits exclude time deposits. Deposit Trends Deposit Composition – Q4’22 Core Deposit Growth(1) Total deposits were up marginally in Q4 while NIB declined to 21.4% of total deposits Time deposits increased to 17.1% as the Bank raised $100 million of CDs in the fourth
Slide 21: Net Interest Income Progression
Net Interest Income Progression Dollars in thousands. Core excludes impact of PPP balances and net revenue impact of third-party managed portfolio. (1) See reconciliation of Non-GAAP financial measures on slide 27 Net Interest Income and Net Interest Margin Excluding PPP impacts, Q4’22 was the seven
Slide 22: Non-Interest Expense and Efficiency Ratio
Q4 NIE, excluding unfunded commitment expense, impacted by the following: Restructuring and other nonrecurring expenses of $1.2 million Primis Mortgage expenses of $5.4 million due to full quarter impact of team hires in Q3 Includes $1.4 million of expense due to third-party serviced loan portfolio
Slide 23: Profitability
Dollars in millions. (1) Results from continuing operations. (2) See reconciliation of Non-GAAP financial measures on slide 27. Profitability Return on Average Assets Pre-Tax Pre-Provision Operating Earnings (1) Excluding pre-tax loss in mortgage and impact of third-party managed loan portfolio, PTP
Slide 24: Per Share Results
Tangible Book Value Per Share Diluted Earnings Per Share and Adjusted Diluted EPS(1) (1) See reconciliation of Non-GAAP financial measures on slide 27. Per Share Results (1) Tangible book value per share reduced by $1.05 at December 31, 2022 due to unrealized mark-to-market losses on the Company’s a
Slide 25: 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 upside as st
Slide 26: Appendix
Appendix
Slide 27: Non-GAAP Reconciliation
*Net interest margin excluding the effect of PPP loans assumes a funding cost of 35 bps on average PPP balances in all applicable periods. Non-GAAP Reconciliation