Primis Financial Corp. · NASDAQ:FRST
Primis Financial — Q3 2022 Earnings Presentation
24 slides from Primis Financial's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022
Third Quarter 2022 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 pre-tax pre-provision operating earnings from continuing operations; pre-tax p
Slide 4: Company overview and valuation
Corp. Headquarters: McLean, VA Bank Headquarters: Glen Allen, VA Branches: 32 Ticker (NASDAQ): FRST Valuation Market Capitalization: $312 million Price / Book Value per Share 0.80x Price / Tangible Book Value: 1.10x Price / 2022 Estimated EPS(3): 12.78x Price / 2023 Estimated EPS(3): 10.28x Dividend
Slide 5: V1BE update and branch deposits
Deposits per Branch $84,635 $74,522 $68,465 $69,080 $67,156 V1BE Coverage Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 • V1BE adoption/utilization continues to build with monthly transactions crossing 1,000 in Q3 V1BE Update(1) • Core market loan growth of 3.3% annualized in Q3(2) 57% ~$9 thousand 4.9 % of V1BE Us
Slide 6: Digital bank initial launch
Initial Launch • Initial consumer launch – July 25, 2022 • Novel feature set differentiates us in the marketplace • User-friendly mobile experience • Significant debit card rewards • Free overdraft • Embedded V1BE functionality • Significant system upgrade expected early Q1’23 with an enhanced small
Slide 7: Mortgage expansion
• Significant expansion of mortgage footings in a short period of time (now licensed in 36 states and D.C.) • 2 substantial teams hired in the third quarter will contribute an additional $700 million to annualized production • On track for $1 billion of mortgage production in 2023, even in the curre
Slide 8: Panacea Financial Q3'22 loan composition and update
Q3’22 Loan Composition ($201.9 million) Q3’22 Update • $59.2 million growth in loan balances in Q3’22 49.8% Q3’22 originations of $68.8 million 26.1% PRN Student Refi • On a direct basis, PPNR increased 110% q/q to $225k Commercial • Now banking ~2,600 doctor households across all 50 states 24.1% •
Slide 9: Life Premium Finance key metrics
Key Portfolio Metrics $129.0 Million 29.5% $549.9 Million Loan Balances (Net of Fees) Q3 Loan Balance Growth Projected Balance at Maturity Key Performance Metrics Placement Ratio 67% ORIGINATION CYCLE TIME SUBMISSIONS Loans in Default 5 26 32 Carrier Approvals Average number of days Average weekly P
Slide 10: Third Quarter Results
Third Quarter Results
Slide 11: Third quarter results highlights
• Net income from continuing operations of $5.1 million or $0.21 per basic and $0.20 diluted share • Adjusted net income of $5.3 million(1) or $0.22 per basic share and $0.21 per diluted share • Pre-tax pre-provision return on average assets from continuing operations(1) was 1.16% for the three mont
Slide 12: Assets, loans, deposits and TCE/TA trends
$3,452 $3,407 9.57% $3,357 $3,220 $3,237 $2,807 9.27% $2,763 $2,686 $2,708 $2,737 9.26% $2,629 $2,683 $2,394 $2,315 $2,340 9.02% 8.73% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Total Assets Gross Loans Deposits TCE/TA(1) Dollars in millions. 12 (1) See reconciliation of Non-GAAP financial measures on slide 24.
Slide 13: Results by business line
Bank Panacea LPF Mortgage Q3 '22 Q2 '22 Chg Q3 '22 Q2 '22 Chg Q3 '22 Q2 '22 Chg Q3 '22 Q2 '22 Chg Net Interest Income(1) $25,284 $23,341 8.3% $1,465 $905 61.9% $530 $294 80.0% $171 $65 N/A Noninterest Income 3,415 2,029 68.3% 2 2 (24.1%) 5 5 0.0% 2,197 593 N/A Op. Nonint. Exp. (excl. res. for unfund
Slide 14: Loan trends, yields and composition
Loan Trends and Yields Q3’22 Loan Composition (Ex. PPP) Other Consumer 2.7% CRE - OO 10.2% $8 16.0% $18 $77 $31 $140 $2,611 $2,729 $2,174 $2,263 $2,362 C&I 17.3% CRE - NOO 4.53% 4.51% 21.0% 4.57% 4.50% 4.27% 4.33% 4.23% 4.35% 4.25% 4.20% C&D Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 5.1% Residential Loans (Ex.
Slide 15: Criticized and classified loans, net charge-offs
• Nonaccrual and classified loans increased by $17.2 million and Criticized & Classified Loans / Total Loans (Ex. PPP) $20.2 million, respectively, largely due to one relationship • Migrated from special mention in Q3 3.54% 3.04% 3.09% • Largely comprised of multiple assisted living facilities 3.08%
Slide 16: ACL coverage and provision
ACL / Gross Loans (Ex. PPP) ACL / Classified Loans 1.40% 139.4% 1.29% 1.24% 121.1% 1.16% 1.17% 71.1% 74.3% 68.9% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 • Provision for credit losses of $2.89 million in Q3 versus provision of $0.4 million in Q2 • Increase driven by loan growth th
Slide 17: Deposit composition and core deposit growth
Deposit Composition – Q3’22 Core Deposit Growth(1) Time Deposits 13.4% 1.43% Demand Deposits 25.4% Savings Accounts 8.0% 0.93% 0.92% $2,403 $2,345 $1,943 $530 $687 $441 0.48% $1,342 0.48% $1,172 $339 $320 $1,872 Money Market $1,658 NOW Accounts $1,502 Accounts 23.5% $852 $1,003 29.7% 2018 2019 2020
Slide 18: Net interest margin trends
Net Interest Margin Trends Margin Progression $2,246 $2,663 $308 3.58% 3.35% 3.57% 2.96% 3.33% $27,450 3.00% $24,606 2.87% 2.96% $22,546 2.66% 2.79% $21,995 $20,544 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 PPP Fee Income Net Interest Income (Ex. PPP) Net Interest Margin Net Interest Margin (Ex.PPP) • Excluding
Slide 19: Non-interest expense and efficiency ratio
Non-Interest Expense (Ex. Res. for Unfunded Com. Expense) • Q3 NIE, excluding unfunded commitment expense, impacted by the following: • Branch closure-related expenses of $308K $23,450 $20,598 • Primis Mortgage expenses of $3.2 million versus one-month $308 $17,030 $18,644 $18,727 $1,302 $3,175 impa
Slide 20: Return on average assets and PTPP operating earnings
(1) Return on Average Assets Pre-Tax Pre-Provision Operating Earnings 0.88% 0.83% 1.20% 0.76% 0.98% 1.00% 0.72% 0.72% 0.91% 0.63% 0.64% 0.61% 0.57% 0.77% 0.55% $9.93 $8.53 $7.91 $7.94 $6.33 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 ROAA Operating ROAA (2) PTPP Operating Earnings (2
Slide 21: Diluted EPS and tangible book value per share
Diluted Earnings Per Share and Adjusted Diluted EPS Tangible Book Value Per Share (1) $1.44 $1.42 $1.42 $1.32 $12.43 $1.26 $1.25 $11.60 $11.54 $11.09 $9.88 $0.68 $0.61 $0.24 $0.21 $0.19 $0.19 $0.20 $0.20 2018 2019 2020 2021 Q1'22 Q2'22 Q3'22 2018 2019 2020 2021 Q3'22 EPS Adjusted EPS • Tangible book
Slide 22: Management team and long-term shareholder value
• 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 Nine Months Ended: Reconciliation of Non-GAAP items: 3Q 2022 2Q 2022 1Q 2022 4Q 2021 3Q 2021 3Q 2022 3Q 2021 Net income from continuing operations $ 5,054 $ 5,009 $ 4,593 $ 7,651 $ 6,211 $ 14,656 $ 23,36