Primis Financial Corp. · NASDAQ:FRST
Primis Financial — Q4 2021 Earnings Presentation
27 slides from Primis Financial's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter 2021
Fourth Quarter 2021 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 pre-tax pre-provision operating earnings from continuing operations; pre-tax p
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: 40 Ticker (NASDAQ): FRST Valuation Market Capitalization: $374 million Price / Book Value per Share 0.91x Price / Tang
Slide 5: In 2020 We Embarked on a Strategic Shift
In 2020 We Embarked on a Strategic Shift Traditional Community Bank High Performing Community Bank Strategic Business Lines Digital Bank With Modern Technology 5
Slide 6: 2021 Delivered Meaningful Progress on Our Strategy
High Performing Community Bank Strategic Business Lines Digital Bank With Modern Technology 2021 Delivered Meaningful Progress on Our Strategy Increased NIB to 19.2% of deposits Reduced cost of deposits from 71 bps to 39 bps (Q4‘20 vs. Q4‘21) 2021 loan growth ex PPP of 6.5%, primarily in 2H’21 Initi
Slide 7: High Performing Community Bank
High Performing Community Bank 7 Valuable franchise in great markets Continued focus on improving deposit mix and lowering cost of deposits Solid loan growth in our core markets – approx. 5% in 2021 and 16% in 2H’21 annualized* versus limited growth the prior 3 years Consolidated 2 branches in 2021
Slide 8: High Performing Community Bank (Cont.) V1BE
High Performing Community Bank (Cont.) 8 ~800 Downloads of the V1BE App ~$20 Million Amt. of Deposits from Accts. Due to V1BE 64 No. of Accounts Due to V1BE ~$175,000 Average Deposit Balance of V1BE Users Pilot Results V1BE is the first app-based self-directed bank fulfillment service All of the ser
Slide 9: Digital Bank Update
Digital Bank Update 9 We have spent 15 months building the foundational technology to power the next generation of Primis From….. Older technology Difficult to customize Batch processed ….To Cloud-based API-driven Fully customizable Real-time processing Significantly faster account opening
Slide 10: Digital Bank Update (Cont.)
Digital Bank Update (Cont.) 10 Launched Friends and Family testing in late November 2021 Currently have 43 checking accounts actively using the new mobile app Final software configuration expected to be complete for a Mid-Q1 public launch Initial products will include consumer and business deposit a
Slide 11: Panacea Financial Update
11 Full suite of banking products and services built uniquely for doctors and doctors-in-training Lending solutions include: PRN Personal Loans – unsecured consumer loans (launched late 2020) Student Loan Refinance – private refinancing of medical, dental, or veterinary school debt (launched Summer
Slide 12: Panacea Financial Update: Loan Growth and Pipeline
12 Accelerating loan growth and pipeline through the second half of 2021 Build out of credit function largely complete 5.28% average yield on loan portfolio 51% of consumer borrowers and 100% of commercial borrowers have a DDA account with Panacea Direct expense of $1.9 million in 2021, with $0.68 m
Slide 13: Life Insurance Premium Finance Update
Life Insurance Premium Finance Update 13 2022 Expectations Overview Launched in November 2021 with three key hires Product expertise in a niche market to provide concierge customer service to the high net worth marketplace Reinventing the Customer Digital Experience on modern technology with unparal
Slide 14: Fourth Quarter Results
Fourth Quarter Results
Slide 15: Fourth quarter highlights
Net income from continuing operations of $7.7 million or $0.31 per basic and diluted share Pre-tax, pre-provision operating return on average assets(1) of 0.91% compared to 0.98% in the third quarter Net interest margin, excluding the effects of PPP, of 2.79% versus 2.66% in the third quarter Aided
Slide 16: Balance Sheet Trends
Dollars in millions. (1) See reconciliation of Non-GAAP financial measures on slide 27. Balance Sheet Trends 16
Slide 17: Loan Composition and Trends
Dollars in millions. Loan Composition and Trends 17 Loan Trends and Yields Loan Composition (Ex. PPP) Robust loan growth of 4.1%, or 16.3% annualized, linked-quarter excluding PPP balances Anticipate mid- to high-teens loan growth in 2022, excluding PPP balances
Slide 18: Asset Quality
Classified loans and NPAs exclude guaranteed portion of SBA loans. Asset Quality 18 NPAs / Loans (Ex. PPP) + OREO NCOs / Average Loans Criticized & Classified Loans / Total Loans (Ex. PPP) Criticized assets continue to remain at moderate levels with substandard and nonperforming loans declining in Q
Slide 19: Allowance for Credit Losses
Classified loans exclude guaranteed portion of SBA loans. Allowance for Credit Losses 19 ACL / Gross Loans (Ex. PPP) ACL / Classified Loans Recovery of credit loss expense of $1.3 million in Q4 as credit environment and economic forecasts improve ACL coverage of gross loans declined to 1.29% from 1.
Slide 20: Deposit Trends
Dollars in millions. (1) Core deposits exclude time deposits. Deposit Trends 20 CAGR ’17-’21: 120% ’19-’21: 134% Deposit Composition – Q4’21 Core Deposit Growth (1) Total deposits declined slightly in Q4, largely due to $125 million seasonal decrease in balances associated with mortgage escrows Focu
Slide 21: Net Interest Margin
Waterfall Dollars in millions. (1) See reconciliation of Non-GAAP financial measures on slide 27 Net Interest Margin 21 Margin benefited from a reduction of excess liquidity as average cash and equivalent balances decreased $56.3 million in Q4 to $619 million $285 million of time deposits mature in
Slide 22: Noninterest expense and efficiency ratio
Q4 NIE impacted by a number of initiatives including continued Panacea build, Life Premium Finance launch, V1BE launch and STM exit, including: $514K recruiting/signing bonuses paid in the quarter $90K increase in legal expense $486K increase in marketing and promotional expense Expenses related to
Slide 23: Profitability
Dollars in millions. (1) Results from continuing operations. (2) See reconciliation of Non-GAAP financial measures on slide 27. Profitability 23 Return on Average Assets Pre-Tax Pre-Provision Earnings (1) Operating leverage expected to drive improving profitability as excess liquidity is deployed in
Slide 24: Per Share Results
Tangible Book Value Per Share Diluted Earnings Per Share from Continuing Operations (1) See reconciliation of Non-GAAP financial measures on slide 27. Per Share Results 24 (1)
Slide 25: Summary
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 Significant valuation upside as strategic investments mature
Slide 26: Appendix
Appendix 26
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 27