8-K
Primis Financial Corp. (FRST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): January 28, 2025
Primis Financial Corp.
(Exact Name of Registrant as Specified in its Charter)
| Virginia | 001-33037 | 20-1417448 |
|---|---|---|
| (State or Other Jurisdiction of <br><br>Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1676International Drive, Suite 900, McLean , Virginia
22102
(Address of Principal Executive Offices) (Zip Code)
(703) 893-7400
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| COMMON STOCK | FRST | NASDAQ |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
On January 28, 2025, Primis Financial Corp. (“Primis” or the “Company”) issued a press release announcing its financial results for the period ended December 31, 2024. A copy of the press release is furnished and attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The Company has prepared presentation materials (the “Investor Presentation”) that management intends to use from time to time hereafter in presentations about the Company’s operations and performance. The Company may use the Investor Presentation, possibly with modifications, in presentations to current and potential investors, analysts, lenders, business partners, acquisition candidates, customers, employees and others with an interest in the Company and its business.
A copy of the Investor Presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference. The Investor Presentation is also available on the Company's website at www.primisbank.com. Materials on the Company’s website are not part of or incorporated by reference into this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
On January 28, 2025, Primis issued a press release announcing the declaration of a dividend payable on February 26, 2025 to shareholders of record as of February 12, 2025. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release dated January 28, 2025
99.2 Primis Financial Corp. Fourth Quarter 2024 Investor Presentation
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Primis Financial Corp. | ||
|---|---|---|
| Date: January 28, 2025 | By: | /s/ Matthew A. Switzer |
| Matthew A. Switzer | ||
| Chief Financial Officer |
Exhibit 99.1
Primis Financial Corp. Reports Earnings perShare for the Fourth Quarter of 2024
Declares Quarterly Cash Dividend of $0.10 PerShare
For immediate release
Tuesday, January 28, 2025
McLean, Virginia, January 28, 2025 – Primis Financial Corp. (NASDAQ: FRST) (“Primis” or the “Company”), and its wholly-owned subsidiary, Primis Bank (the “Bank”), today reported a net loss available to common shareholders of $14.7 million or $0.59 loss per basic and diluted share for the quarter ended December 31, 2024, compared to a net loss available to common shareholders of $8.2 million or $0.33 loss per basic and diluted share for the quarter ended December 31, 2023. For the full year of 2024, the Company reported a net loss available to common shareholders and loss per basic and diluted share of $7.5 million and $0.31, respectively, compared to a loss of $7.8 million and $0.32, respectively, in 2023. Earnings for the three month and year-to-date periods of 2024 are highly affected by the Company’s decision to move a third-party originated consumer loan portfolio to held for sale in the fourth quarter of 2024 as described further below.
Strategic Options to Maximize Value
Dennis J. Zember, Jr., President and Chief Executive Officer of Primis commented, “In the fourth quarter of 2024, we made several moves that were costly, but should better position the Company to maximize its strategic value. These moves in the current quarter include neutralizing the credit impacts of the consumer loan book by moving the majority of it to held for sale with substantial marks. Additionally, we sold our Life Premium Finance business and launched a meaningful mortgage warehouse lending business that should add up to 15 basis points of additional return on assets once it reaches scale in 2025.”
With the third-party consumer book marked, the Company is exploring various avenues to maximize its shareholder value. These include decisions needed to drive higher earnings and operating results that should no longer be overshadowed by the consumer portfolio's credit costs. Secondly, a more determined effort to highlight the value and opportunity in the core community bank with its funding advantage and growth opportunities. Lastly, moving to deconsolidate Panacea Financial Holdings and realize the economic gain which management believes has improved substantially since the unrealized $19.6 million market value at December 31, 2023. Other avenues are being explored alongside these operating strategies that would accelerate the recognition of unrealized market value in the Company.
Strategic Repositioning
The Company spent substantial time and energy in 2024 focusing the organization toward business lines it believes can drive the greatest long-term profitability and growth. Activities included continued moves to enhance operating leverage in the core bank, lender recruitment and scaling in mortgage, relieving balance sheet pressure through the sale of Life Premium Finance, leveraging existing infrastructure to expand the mortgage warehouse lending division and neutralizing the credit cost impact of the third-party consumer loan program. The result of these moves is a significantly more focused organization comprised of:
| · | A core community bank in strong markets with<br>$2.2 billion of low-cost customer deposits and low commercial real estate concentrations; |
|---|---|
| · | A retail mortgage company that has grown in the<br>face of industry pressures, reaching approximately $800 million of production in 2024 and poised to reach approximately $1.25 billion<br>of production in 2025; |
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| · | A national strategy that combines lower risk<br>mortgage warehouse and construction-to-perm lending funded by a unique digital platform; and |
|---|---|
| · | The nation’s leading healthcare-focused<br>financial services brand in Panacea Financial whose already out-sized growth continues to accelerate and the market value of which is<br>not reflected in the Company’s capital. |
The following discussion highlights the near-term opportunity for each of these strategies.
Core Community Bank
The core bank has 24 banking offices in Virginia and Maryland and finished 2024 with $2.2 billion of customer deposits. The core bank’s cost of deposits of 1.87% at 2024 year-end is lower than most of its larger regional bank competitors and up to 100 basis points lower than equal sized peers in the greater Washington, D.C. region. The Bank’s proprietary V1BE service directly supports approximately $200 million of checking accounts and is driving growth in new relationships focused on commercial and consumer checking accounts.
The Bank has reorganized its lending team and added selective hires in key markets. Early signs of success from these efforts can be found in the loan pipeline which ended 2024 at approximately $119 million with 88% of that amount representing new customers to the Bank versus $51 million and 21%, respectively, at the end of 2023. The Bank’s loan portfolio is diversified across the footprint and is well below regulatory concentration limits for commercial real estate.
Primis Mortgage
Primis Mortgage earned approximately $2.6 million pre-tax in 2024, including its managed portfolio, versus immaterial earnings in 2023. Primis Mortgage had approximately $800 million of production in 2024 versus approximately $600 million of production the prior year. Continued recruiting and operational improvements have current applications, locks and closings 40% to 50% higher than the same month a year ago and the Company anticipates production of $1.25 billion in the current rate environment. Not included in this outlook is the impact of the Bank’s new construction-to-perm builder partnerships focused on government lending that should generate additional volume with strong profitability metrics.
National Strategies
With the sale of Life Premium Finance, the Company is focusing its national lending strategies on mortgage warehouse lending and a new partnership with a national builder leveraging the Bank’s existing construction-to-perm loan product.
While the Bank had mortgage warehouse lending capabilities, activity was insignificant until the team build-out in the fall of 2024. As of the end of January 2025, the team has grown to 54 approved customers with over $400 million of committed lines. Average yield, including fees, was SOFR plus 340 basis points in December. In addition to a growing customer pipeline, the mortgage warehouse team also plans to augment its growth with selective mortgage servicing rights (“MSR”) relationships through 2025.
The Bank also recently gained preferred lender status with a national builder by leveraging its one-time-close construction-to-permanent mortgage product. The partner builder had loan volume of $15 billion in 2024 and has approved the Bank to work with 85 of its offices across the country. Pricing on the mortgages is generally Prime or better with 50 to 100 basis points of fees and are based on government programs that make the mortgages eligible for sale in the secondary market (via Primis Mortgage).
Funding for the national strategies is provided by the Bank’s digital platform powering what we believe is one of only a handful of bank deposit offerings nationwide that is both fully functional and inherently app-based. Since the launch in November 2022, the platform has grown to 18 thousand customers with just under $1 billion of deposits priced around Fed Funds after the most recent rate adjustment. The Bank is leveraging the technology underpinning its digital platform to launch a unique affinity brand in March 2025. This brand will leverage well-known ambassadors and influencers to drive adoption of attractive deposit products in a unique niche. The Company believes this strategy is highly replicable and has the potential to be a significant driver of growth in the next few years.
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Panacea Financial
Panacea’s growth accelerated to end 2024 with loans outstanding up 11% from the third quarter of 2024 to $434 million funded by $92 million of deposits attributable to the division. Panacea is the number one ranked “Bank for doctors” on Google and banks approximately 6,000 professionals and practices nationwide with a goal of reaching 10,000 customers by the end of 2025. Panacea is utilizing the proceeds of the Panacea Financial Holdings capital raise from late 2023 to develop the initial phase of what is expected to be a sophisticated suite of technology products and services targeting the medical, dental and veterinary space. As previously disclosed, the Company owns approximately 19% of Panacea Financial Holdings and the value of our ownership was almost $20 million at the time of the capital raise.
Consumer Loan Program Winddown
As disclosed previously, the Company has originated consumer loans through a third-party (the “Consumer Program”) since the second half of 2021. A subset of the Consumer Program has promotional characteristics where interest is deferred during the promotional period and is waived if the customer pays off the loan prior to the period end. In that event, the third-party reimburses the Bank for the waived interest. Until the end of the promotional period, the Company is unable to accrue interest on the loan under GAAP but does record a derivative representing the fair value of expected interest reimbursements from the third-party. Credit costs are also included in the Company’s results, including estimated life of loan losses required by ASC 326 while potential credit enhancements from the Consumer Program are only reflected as received. Outstanding balances in the Consumer Program before fair value marks were $173 million as of December 31, 2024 with $39 million of balances in a promotional period versus $180 million and $60 million, respectively, at September 30, 2024.
In the fourth quarter of 2024, the Company made the decision to cease originating new loans under the Consumer Program effective January 31, 2025 and moved a large portion of the portfolio, with an amortized cost of $133 million, to loans held for sale and marked them to fair market value. The adjustment to fair market value resulted in additional provision expense and charge-offs of $20.0 million in the fourth quarter of 2024. The remaining portion of the portfolio still classified as held for investment of approximately $39 million at December 31, 2024 has an associated allowance for credit losses of approximately $10 million and is expected to run off substantially in 2025. The table below highlights the drag on 2024 profitability from the program:
| Contribution ($000) | Q4 '24 | 2024 | ||||
|---|---|---|---|---|---|---|
| Net Interest Income | 288 | 2,430 | ||||
| Provision Expense | (20,842 | ) | (34,025 | ) | ||
| Noninterest Income | 928 | 4,320 | ||||
| Noninterest Expense | (1,827 | ) | (2,660 | ) | ||
| Pre-Tax Contribution | $ | (21,452 | ) | $ | (29,935 | ) |
Outlook
Mr. Zember commented, “The Company’s strategies are profitable and remarkably scalable given our size. We operate a successful and valuable community bank and lines of business that can deliver outsized growth and profits relative to our size. As seen below, we have already made the moves necessary to deliver attractive operating results and clearing the deck of the consumer loan noise was necessary for these results to be apparent. “
| Reported 2024 ROAA | (0.19 | )% |
|---|---|---|
| Consumer Program Credit Costs | 0.69 | |
| Lost Revenue on Promo Balances (@ 8)% | 0.12 | |
| Gain on LPF sale | (0.10 | ) |
| Nonrecurring Items (Restatements/Legal) | 0.13 | |
| Adjusted 2024 ROAA | 0.65 | % |
| Other Profitability Improvements Already Made and Potential Impact on 2025 Results: | ||
| Trading out LPF for Mortgage Warehouse | 0.15 | % |
| Mortgage Volume Run Rate Over 2024 | 0.09 | |
| Incremental Funding Rate Savings Since Dec. 2024 | 0.06 |
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Net Interest Income
Net interest income decreased approximately $1.9 million, or 7%, to $26.1 million during the fourth quarter of 2024 compared to the third quarter of 2024. Material items impacting the fourth quarter level of net interest income were $2.5 million of interest reversals on charged off Consumer Program loans and approximately $1.3 million of decline related to sale of the Life Premium Finance portfolio as of October 31, 2024. Higher spreads between loans and deposits were achieved through the quarter as deposit rates fell by approximately 20 basis points in the core Bank which mostly neutralized the impact of the sold Life Premium Finance portfolio. On a recurring basis excluding the impact of prior quarter reversals, net interest income would have been $28.6 million compared to $28.0 million in the third quarter of 2024 and up 11.3% compared to $25.7 million in the fourth quarter of 2023. Excluding the interest reversal described above, net interest margin for the fourth quarter of 2024 would have been 3.18% compared to 2.86% in the fourth quarter of 2023.
Interest income, adjusted for the interest reversals noted above, was $53.9 million for the fourth quarter of 2024, higher by 7.4% when compared to $50.2 million in the same quarter in 2023. When adjusted for the interest reversals yield on earning assets was 5.99% in the fourth quarter of 2024 compared to 5.58% in the same quarter in 2023. In 2025, the Company has approximately $350 million of loans with a weighted average yield of 5.90% subject to repricing that indicate some level of opportunity for continued increases in interest income.
The pace of declines in interest expense alongside steady levels of interest income accelerated in the fourth quarter and indicates stronger profitability moving into 2025. Cost of deposits decreased 24 basis points to 2.80% in the fourth quarter of 2024 from 3.04% in the third quarter of 2024 and did not include lower costs on almost $1 billion of digital deposits that repriced late in December 2024 and early in January 2025. Deposit costs on digital deposits have declined by approximately 65 basis points compared to fourth quarter levels implying additional savings of approximately $6.5 million annually.
Noninterest Income
Noninterest income was $13.2 million in the fourth quarter of 2024 versus $9.3 million in the third quarter of 2024. Excluding the net gain from the Life Premium Finance sale, noninterest income decreased to $8.4 million in the fourth quarter of 2024. Income from mortgage banking activity decreased $1.8 million during the fourth quarter of 2024 due to seasonally lower activity. Partially offsetting the decrease in mortgage banking income was an increase of $0.8 million in fee income related to the Consumer Program net of changes in the associated derivative fair market value. The fourth quarter of 2024 also had a $13 thousand loss on disposal of bank property versus $0.4 million of gains in the third quarter of 2024.
Noninterest Expense
Noninterest expense was $37.2 million for the fourth quarter of 2024, compared to $31.0 million for the third quarter of 2024. Noninterest expense also includes consolidated expenses from Panacea Financial Holdings (“PFH”). Management considers the core expense burden of the Bank that adjusts for certain items that are volume dependent such as mortgage banking-related expenses or expense related to changes in the reserve for unfunded commitments. The following table illustrates the Company’s core operating expense burden during 2024:
| 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | 4Q 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported Noninterest Expense | 37,174 | 30,955 | 29,786 | 27,538 | 27,780 | ||||||||||
| PFH Consolidated Expenses | (3,641 | ) | (2,576 | ) | (2,347 | ) | (2,119 | ) | (2,813 | ) | |||||
| Noninterest Expense Excl. PFH | 33,533 | 28,379 | 27,439 | 25,419 | 24,967 | ||||||||||
| Nonrecurring / Cons. Prog. Fraud Loss | (3,032 | ) | (1,352 | ) | (1,453 | ) | (438 | ) | (165 | ) | |||||
| Primis Mortgage Expenses | (6,354 | ) | (6,436 | ) | (6,084 | ) | (5,122 | ) | (4,785 | ) | |||||
| Consumer Program Servicing Fee | (681 | ) | (699 | ) | (312 | ) | (312 | ) | (312 | ) | |||||
| Reserve for Unfunded Commitment | 6 | (96 | ) | 546 | 2 | (554 | ) | ||||||||
| Total Adjustments | (10,061 | ) | (8,583 | ) | (7,303 | ) | (5,870 | ) | (5,816 | ) | |||||
| Core Operating Expense Burden | 23,472 | 19,796 | 20,136 | 19,549 | 19,151 |
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As noted above, the core expense burden increased $3.7 million in the fourth quarter of 2024 from the third quarter of 2024. Contributing to the increase was $1.0 million increase in compensation-related accruals, including restricted stock expense and mortgage warehouse signing bonuses, $0.4 million of miscellaneous lending expense, $0.3 million increase in FDIC insurance expense and other consulting expenses and implementation fees related to various technology projects. Many of these expense items are expected to decline beginning in the first quarter of 2025. Core operating expense burden is projected to be between $21 million and $22 million per quarter for 2025.
Loan Portfolio and Asset Quality
Loans held for investment decreased to $2.91 billion at December 31, 2024, compared to $2.97 billion at September 30, 2024. As noted above, the Bank reclassified $133 million of gross loan balances associated with the Consumer Program to loans held for sale at December 31, 2024. Including these balances, loans held for investment would have increased 2.2% unannualized in the fourth quarter of 2024. The Mortgage Warehouse and Panacea divisions drove the growth in the period with loan growth of $49 million and $41 million, respectively, in the fourth quarter of 2024.
Nonperforming assets, excluding portions guaranteed by the SBA, were only 0.29% of total assets, or $10.8 million at December 31, 2024, compared to 0.25% or $10.2 million at September 30, 2024. The Bank had no other real estate owned at the end of the fourth quarter of 2024.
The Company recorded a provision for loan losses of $23.0 million for the fourth quarter of 2024 versus $7.5 million for the third quarter of 2024. Of this provision, $20.8 million was due to Consumer Program activity including recording the fair market value adjustment for the portion of the portfolio that was moved to loans held for sale through the allowance for credit losses. As a percentage of loans held for investment, the allowance for credit losses was 1.49% and 1.72% at the end of the fourth and third quarter of 2024, respectively, with the decline due to the reclassification of Consumer Program loans.
Net charge-offs were $31.0 million for the fourth quarter of 2024, up from $8.0 million for the third quarter of 2024. Consumer Program net charge-offs were $30.5 million in the fourth quarter versus $6.7 million in the third quarter of 2024. Core net charge-offs, excluding those losses from the Consumer Program, were $0.5 million, or 0.05% of average loans, in the fourth quarter of 2024 compared to $0.9 million, or 0.11%, in the third quarter of 2024^(1)^.
Deposits and Funding
Total deposits at December 31, 2024 decreased to $3.17 billion from $3.31 billion at September 30, 2024 as the Bank paid off high cost brokered deposits and swept off excess liquidity during the quarter. Deposits swept off balance sheet totaled $137 million at December 31, 2024 versus none at September 30, 2024. Importantly, noninterest bearing demand deposits were $439 million at December 31, 2024, up 4.2% from $421 million at September 30, 2024 as the Company emphasizes driving up low cost deposit balances.
Deposit growth in the Bank continues to benefit from better technology and unique convenience factors. V1BE, the Bank’s proprietary invitation-only delivery tool, increased total users by 20% in 2024, and now has over 3,000 users on the platform as of December 31, 2024. The service completed over 40 thousand requests in 2024 and supports almost $200 million of deposits.
During the fourth quarter of 2024, the Bank opened approximately $32.5 million new deposit accounts on the digital platform with very modest marketing expenses. At quarter end, the Bank had approximately 18,000 digital accounts with $981 million in total deposits and average balances of approximately $55 thousand.
As of December 31, 2024, the Bank has no wholesale funding.
Shareholders’ Equity
Book value per common share as of December 31, 2024 was $14.58, a decrease of $0.83 from September 30, 2024. Tangible book value per common share^(1)^ at the end of the fourth quarter of 2024 was $10.77, a decrease of $0.82 from September 30, 2024. Common shareholders’ equity was $360 million, or 9.75% of total assets, at December 31, 2024. Tangible common equity^(1)^ at December 31, 2024 was $266 million, or 7.39% of tangible assets^(1)^. After-tax unrealized losses on the Company’s available-for-sale securities portfolio increased by $4.0 million to $21 million due to increases in market interest rates during the fourth quarter of 2024. The Company has the intent and ability to hold these securities until maturity or recovery of the value and does not anticipate realizing any losses on the investments.
(1) Non-GAAP financial measure. Please see “Reconciliationof Non-GAAP Items” in the financial tables for more information and for a reconciliation to GAAP.
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The Board of Directors declared a dividend of $0.10 per share payable on February 26, 2025 to shareholders of record on February 12, 2025. This is Primis’ fifty-third consecutive quarterly dividend.
About Primis Financial Corp.
As of December 31, 2024, Primis had $3.7 billion in total assets, $2.9 billion in total loans held for investment and $3.2 billion in total deposits. Primis Bank provides a range of financial services to individuals and small- and medium-sized businesses through twenty-four full-service branches in Virginia and Maryland and provides services to customers through certain online and mobile applications.
| Contacts: | Address: |
|---|---|
| Dennis J. Zember, Jr., President and CEO | Primis Financial Corp. |
| Matthew A. Switzer, EVP and CFO | 1676 International Drive, Suite 900 |
| Phone: (703) 893-7400 | McLean,<br>VA 22102 |
Primis Financial Corp., NASDAQ Symbol FRST
Website: www.primisbank.com
Conference Call
The Company’s management will host a conference call to discuss its fourth quarter results on Wednesday, January 29, 2025 at 10:00 a.m. (ET). A live Webcast of the conference call is available at the following website: https://events.q4inc.com/attendee/384098079. Participants may also call 1-800-715-9871 and ask for the Primis Financial Corp. call. A replay of the teleconference will be available for 7 days by calling 1-800-770-2030 and providing Replay Access Code 4554342.
Non-GAAP Measures
Statements included in this press release 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-provision operating earnings; operating return on average assets; pre-tax pre-provision operating return on average assets; operating return on average equity; operating return on average tangible equity; operating efficiency ratio; operating earnings per share – basic; operating earnings per share – diluted; tangible book value per share; tangible common equity; tangible common equity to tangible assets; and core net interest margin are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. We use the term “operating” to describe a financial measure that excludes income or expense considered to be non-recurring in nature. Items identified as non-operating are those that, when excluded from a reported financial measure, provide management or the reader with a measure that may be more indicative of forward-looking trends in our business. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures is provided in the Reconciliation of Non-GAAP Items table.
Management believes that these non-GAAP financial measures provide additional useful information about Primis that allows management and investors to evaluate the ongoing operating results, financial strength and performance of Primis and provide meaningful comparison to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider Primis’ performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of Primis. Non-GAAP financial measures are not standardized and, therefore, it may not be possible to compare these measures with other companies that present measures having the same or similar names.
Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
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Forward-Looking Statements
This press release 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 Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and other similar words or expressions of the future or otherwise regarding the outlook for the Company’s future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, but are not limited to, our expectations regarding our future operating and financial performance, including the preliminary estimated financial and operating information presented herein, which is subject to adjustment; our outlook and long-term goals for future growth and new offerings and services; our expectations regarding net interest margin; expectations on our growth strategy, expense management, capital management and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations.
Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: the Company’s ability to implement its various strategic and growth initiatives, including its recently established Panacea Financial Division, digital banking platform, V1BE fulfillment service, mortgage warehouse division and Primis Mortgage Company; the risks associated with the Life Premium Finance sale, including failure to achieve the expected impact to our operating results; competitive pressures among financial institutions increasing significantly; changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices; changes in management’s plans for the future; credit risk associated with our lending activities; the impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within our primary market areas; changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortages and supply chain disruptions; the impacts of tariffs and trade policies; changes in accounting principles, policies, or guidelines; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions; potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; potential increases in the provision for credit losses; our ability to identify and address increased cybersecurity risks, including those impacting vendors and other third parties; fraud or misconduct by internal or external actors, which we may not be able to prevent, detect or mitigate; acts of God or of war or other conflicts, including the current Ukraine/Russia conflict and Israel/Hamas conflict, acts of terrorism, pandemics or other catastrophic events that may affect general economic conditions; and other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.
Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” and in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.
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PrimisFinancial Corp.
| Financial<br> Highlights (unaudited) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars<br> in thousands, except per share data) | For<br> Three Months Ended: | For<br> Twelve Months Ended: | |||||||||||||||||||
| Selected Performance Ratios: | 4Q<br> 2024 | 3Q<br> 2024 | 2Q<br> 2024 | 1Q<br> 2024 | 4Q<br> 2023 | 4Q<br> 2024 | 4Q<br> 2023 | ||||||||||||||
| Return on average<br> assets | (1.53 | )% | 0.12 | % | 0.35 | % | 0.26 | % | (0.85 | )% | (0.19 | )% | (0.20 | )% | |||||||
| Operating<br> return on average assets^(1)^ | (1.67 | )% | 0.20 | % | 0.46 | % | 0.29 | % | (0.80 | )% | (0.17 | )% | 0.13 | % | |||||||
| Pre-tax<br> pre-provision return on average assets^(1)^ | 0.52 | % | 0.86 | % | 0.75 | % | 1.02 | % | 0.96 | % | 0.62 | % | 0.60 | % | |||||||
| Pre-tax<br> pre-provision operating return on average assets^(1)^ | 0.34 | % | 0.96 | % | 0.85 | % | 1.06 | % | 1.03 | % | 0.65 | % | 0.94 | % | |||||||
| Return on average common equity | (15.26 | )% | 1.31 | % | 3.69 | % | 2.59 | % | (8.54 | )% | (2.02 | )% | (1.99 | )% | |||||||
| Operating<br> return on average common equity^(1)^ | (16.64 | )% | 2.15 | % | 4.81 | % | 2.95 | % | (8.01 | )% | (1.79 | )% | 1.31 | % | |||||||
| Operating<br> return on average tangible common equity^(1)^ | (22.07 | )% | 2.86 | % | 6.42 | % | 3.94 | % | (10.71 | )% | (2.40 | )% | 1.78 | % | |||||||
| Cost of funds | 2.97 | % | 3.25 | % | 3.16 | % | 2.97 | % | 2.85 | % | 3.09 | % | 2.67 | % | |||||||
| Net interest margin | 2.91 | % | 2.97 | % | 2.72 | % | 2.84 | % | 2.86 | % | 2.86 | % | 2.68 | % | |||||||
| Gross loans to deposits | 91.70 | % | 89.94 | % | 98.95 | % | 97.37 | % | 98.45 | % | 91.70 | % | 98.45 | % | |||||||
| Efficiency ratio | 94.59 | % | 82.98 | % | 83.42 | % | 77.41 | % | 81.31 | % | 84.83 | % | 85.16 | % | |||||||
| Operating<br> efficiency ratio^(1)^ | 98.74 | % | 80.11 | % | 79.63 | % | 76.17 | % | 79.43 | % | 83.52 | % | 75.80 | % | |||||||
| Per Common Share Data: | |||||||||||||||||||||
| Earnings per common share - Basic | $ | (0.59 | ) | $ | 0.05 | $ | 0.14 | $ | 0.10 | $ | (0.33 | ) | $ | (0.31 | ) | $ | (0.32 | ) | |||
| Operating<br> earnings per common share - Basic^(1)^ | $ | (0.65 | ) | $ | 0.08 | $ | 0.18 | $ | 0.11 | $ | (0.31 | ) | $ | (0.27 | ) | $ | 0.21 | ||||
| Earnings per common share - Diluted | $ | (0.59 | ) | $ | 0.05 | $ | 0.14 | $ | 0.10 | $ | (0.33 | ) | $ | (0.31 | ) | $ | (0.32 | ) | |||
| Operating<br> earnings per common share - Diluted^(1)^ | $ | (0.65 | ) | $ | 0.08 | $ | 0.18 | $ | 0.11 | $ | (0.31 | ) | $ | (0.27 | ) | $ | 0.21 | ||||
| Book value per common share | $ | 14.58 | $ | 15.41 | $ | 15.22 | $ | 15.16 | $ | 15.23 | $ | 14.58 | $ | 15.23 | |||||||
| Tangible<br> book value per common share^(1)^ | $ | 10.77 | $ | 11.59 | $ | 11.38 | $ | 11.31 | $ | 11.37 | $ | 10.77 | $ | 11.37 | |||||||
| Cash dividend per common share | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.40 | $ | 0.40 | |||||||
| Weighted average shares outstanding - Basic | 24,701,260 | 24,695,685 | 24,683,734 | 24,673,857 | 24,647,728 | 24,688,006 | 24,647,728 | ||||||||||||||
| Weighted average shares outstanding - Diluted | 24,701,260 | 24,719,920 | 24,708,484 | 24,707,113 | 24,647,728 | 24,688,006 | 24,647,728 | ||||||||||||||
| Shares outstanding at end of period | 24,722,734 | 24,722,734 | 24,708,234 | 24,708,588 | 24,693,172 | 24,722,734 | 24,693,172 | ||||||||||||||
| Asset Quality Ratios: | |||||||||||||||||||||
| Non-performing assets as a percent<br> of total assets, excluding SBA guarantees | 0.29 | % | 0.25 | % | 0.25 | % | 0.23 | % | 0.20 | % | 0.29 | % | 0.20 | % | |||||||
| Net charge-offs (recoveries)<br> as a percent of average loans (annualized) | 3.84 | % | 0.93 | % | 0.60 | % | 0.64 | % | 0.94 | % | 1.48 | % | 0.45 | % | |||||||
| Core<br> net charge-offs (recoveries) as a percent of average loans (annualized)^(1)^ | 0.05 | % | 0.11 | % | (0.07 | )% | 0.10 | % | 0.57 | % | 0.05 | % | 0.20 | % | |||||||
| Allowance for credit losses to<br> total loans | 1.49 | % | 1.72 | % | 1.56 | % | 1.66 | % | 1.62 | % | 1.49 | % | 1.62 | % | |||||||
| Capital Ratios: | |||||||||||||||||||||
| Common equity to<br> assets | 9.75 | % | 9.47 | % | 9.48 | % | 9.63 | % | 9.75 | % | |||||||||||
| Tangible<br> common equity to tangible assets^(1)^ | 7.39 | % | 7.29 | % | 7.27 | % | 7.36 | % | 7.46 | % | |||||||||||
| Leverage<br> ratio^(2)^ | 8.00 | % | 8.20 | % | 8.25 | % | 8.38 | % | 8.37 | % | |||||||||||
| Common<br> equity tier 1 capital ratio^(2)^ | 8.64 | % | 8.23 | % | 8.85 | % | 8.98 | % | 8.96 | % | |||||||||||
| Tier<br> 1 risk-based capital ratio^(2)^ | 8.94 | % | 8.51 | % | 9.14 | % | 9.27 | % | 9.25 | % | |||||||||||
| Total<br> risk-based capital ratio^(2)^ | 12.35 | % | 11.68 | % | 12.45 | % | 12.62 | % | 13.44 | % |
^(1)^See Reconciliation of Non-GAAP financial measures.
^(2)^ Ratios are estimated and may be subject to change pending the final filing of the FR Y-9C.
8
PrimisFinancial Corp.
| (Dollars in thousands) | For<br> Three Months Ended: | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Condensed<br> Consolidated Balance Sheets (unaudited) | 4Q<br> 2024 | 3Q<br> 2024 | 2Q<br> 2024 | 1Q<br> 2024 | 4Q<br> 2023 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 64,505 | $ | 77,274 | $ | 66,580 | $ | 88,717 | $ | 77,553 | ||||||||||
| Investment securities-available<br> for sale | 235,903 | 242,543 | 232,867 | 230,617 | 228,420 | |||||||||||||||
| Investment securities-held to<br> maturity | 9,448 | 9,766 | 10,649 | 10,992 | 11,650 | |||||||||||||||
| Loans held for sale | 227,235 | 458,722 | 94,644 | 72,217 | 57,691 | |||||||||||||||
| Loans receivable, net of deferred<br> fees | 2,907,914 | 2,973,723 | 3,300,562 | 3,227,665 | 3,219,414 | |||||||||||||||
| Allowance<br> for credit losses | (43,227 | ) | (51,132 | ) | (51,574 | ) | (53,456 | ) | (52,209 | ) | ||||||||||
| Net loans | 2,864,687 | 2,922,591 | 3,248,988 | 3,174,209 | 3,167,205 | |||||||||||||||
| Stock in Federal Reserve Bank<br> and Federal Home Loan Bank | 13,037 | 20,875 | 16,837 | 14,225 | 14,246 | |||||||||||||||
| Bank premises and equipment,<br> net | 19,432 | 19,668 | 19,946 | 20,412 | 20,611 | |||||||||||||||
| Operating lease right-of-use<br> assets | 10,279 | 10,465 | 10,293 | 10,206 | 10,646 | |||||||||||||||
| Goodwill and other intangible<br> assets | 94,124 | 94,444 | 94,768 | 95,092 | 95,417 | |||||||||||||||
| Assets held for sale, net | 5,185 | 9,864 | 5,136 | 6,359 | 6,735 | |||||||||||||||
| Bank-owned life insurance | 67,184 | 66,750 | 66,319 | 67,685 | 67,588 | |||||||||||||||
| Deferred tax assets, net | 24,019 | 25,582 | 25,232 | 24,513 | 22,395 | |||||||||||||||
| Consumer Program derivative<br> asset | 4,511 | 7,146 | 9,929 | 10,685 | 10,806 | |||||||||||||||
| Other assets | 59,272 | 58,657 | 63,830 | 64,050 | 65,583 | |||||||||||||||
| Total<br> assets | $ | 3,698,821 | $ | 4,024,347 | $ | 3,966,018 | $ | 3,889,979 | $ | 3,856,546 | ||||||||||
| Liabilities and stockholders'<br> equity | ||||||||||||||||||||
| Demand deposits | $ | 438,917 | $ | 421,231 | $ | 420,241 | $ | 463,190 | $ | 472,941 | ||||||||||
| NOW accounts | 817,715 | 748,833 | 793,608 | 771,116 | 773,028 | |||||||||||||||
| Money market accounts | 798,506 | 835,099 | 831,834 | 834,514 | 794,530 | |||||||||||||||
| Savings accounts | 775,719 | 873,810 | 866,279 | 823,325 | 783,758 | |||||||||||||||
| Time deposits | 340,178 | 427,458 | 423,501 | 422,778 | 445,898 | |||||||||||||||
| Total<br> deposits | 3,171,035 | 3,306,431 | 3,335,463 | 3,314,923 | 3,270,155 | |||||||||||||||
| Securities sold under agreements<br> to repurchase - short term | 3,918 | 3,677 | 3,273 | 3,038 | 3,044 | |||||||||||||||
| Federal Home Loan Bank advances | - | 165,000 | 80,000 | 25,000 | 30,000 | |||||||||||||||
| Secured borrowings | 17,195 | 17,495 | 21,069 | 21,298 | 20,393 | |||||||||||||||
| Subordinated debt and notes | 95,878 | 95,808 | 95,737 | 95,666 | 95,595 | |||||||||||||||
| Operating lease liabilities | 11,566 | 11,704 | 11,488 | 11,353 | 11,686 | |||||||||||||||
| Other liabilities | 25,541 | 27,169 | 24,777 | 24,102 | 28,080 | |||||||||||||||
| Total liabilities | 3,325,133 | 3,627,284 | 3,571,807 | 3,495,380 | 3,458,953 | |||||||||||||||
| Total Primis common stockholders'<br> equity | 360,462 | 381,022 | 376,047 | 374,577 | 376,161 | |||||||||||||||
| Noncontrolling<br> interest | 13,226 | 16,041 | 18,164 | 20,022 | 21,432 | |||||||||||||||
| Total<br> stockholders' equity | 373,688 | 397,063 | 394,211 | 394,599 | 397,593 | |||||||||||||||
| Total<br> liabilities and stockholders' equity | $ | 3,698,821 | $ | 4,024,347 | $ | 3,966,018 | $ | 3,889,979 | $ | 3,856,546 | ||||||||||
| Tangible<br> common equity^(1)^ | $ | 266,338 | $ | 286,578 | $ | 281,279 | $ | 279,485 | $ | 280,744 | ||||||||||
| Primis Financial Corp. | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in thousands) | For Three<br> Months Ended: | For Twelve<br> Months Ended: | ||||||||||||||||||
| Condensed<br> Consolidated Statement of Operations (unaudited) | 4Q<br> 2024 | 3Q<br> 2024 | 2Q<br> 2024 | 1Q<br> 2024 | 4Q<br> 2023 | 4Q<br> 2024 | 4Q<br> 2023 | |||||||||||||
| Interest and dividend<br> income | $ | 51,400 | $ | 57,104 | $ | 52,191 | $ | 50,336 | $ | 50,163 | $ | 211,031 | $ | 192,618 | ||||||
| Interest<br> expense | 25,260 | 29,081 | 27,338 | 25,067 | 24,437 | 106,746 | 93,907 | |||||||||||||
| Net interest income | 26,140 | 28,023 | 24,853 | 25,269 | 25,726 | 104,285 | 98,711 | |||||||||||||
| Provision<br> for credit losses | 23,046 | 7,511 | 3,119 | 6,508 | 21,310 | 40,184 | 32,540 | |||||||||||||
| Net interest<br> income after provision for credit losses | 3,094 | 20,512 | 21,734 | 18,761 | 4,416 | 64,101 | 66,171 | |||||||||||||
| Account maintenance and deposit<br> service fees | 1,276 | 1,398 | 1,780 | 1,330 | 1,518 | 5,784 | 5,733 | |||||||||||||
| Income from bank-owned life insurance | 434 | 431 | 981 | 564 | 420 | 2,410 | 2,021 | |||||||||||||
| Mortgage banking income | 5,140 | 6,803 | 6,402 | 5,574 | 3,210 | 23,919 | 17,645 | |||||||||||||
| Gain (loss) on sale of loans | (4 | ) | - | (29 | ) | 336 | 526 | 303 | 794 | |||||||||||
| Gain on sale of Life Premium<br> Finance portfolio, net of broker fees | 4,723 | - | - | - | - | 4,723 | - | |||||||||||||
| Consumer Program derivative | 928 | 79 | 1,272 | 2,041 | 2,886 | 4,320 | 18,120 | |||||||||||||
| Gain on other investments | 15 | 51 | 136 | 206 | 190 | 408 | 184 | |||||||||||||
| Gain (loss) on bank premises<br> and equipment | (13 | ) | 352 | 124 | - | (478 | ) | 463 | - | |||||||||||
| Other | 663 | 168 | 186 | 256 | 169 | 1,273 | 753 | |||||||||||||
| Noninterest<br> income | 13,162 | 9,282 | 10,852 | 10,307 | 8,441 | 43,603 | 45,250 | |||||||||||||
| Employee compensation and benefits | 15,717 | 16,764 | 16,088 | 15,735 | 14,645 | 64,304 | 58,765 | |||||||||||||
| Occupancy and equipment expenses | 3,466 | 3,071 | 3,099 | 3,106 | 2,982 | 12,742 | 12,620 | |||||||||||||
| Amortization of intangible assets | 313 | 318 | 317 | 317 | 317 | 1,265 | 1,269 | |||||||||||||
| Goodwill impairment | - | - | - | - | - | - | 11,150 | |||||||||||||
| Virginia franchise tax expense | 631 | 631 | 632 | 631 | 849 | 2,525 | 3,395 | |||||||||||||
| Data processing expense | 3,434 | 2,552 | 2,347 | 2,231 | 2,216 | 10,564 | 9,545 | |||||||||||||
| Marketing expense | 499 | 449 | 499 | 459 | 352 | 1,906 | 1,819 | |||||||||||||
| Telecommunication and communication<br> expense | 295 | 330 | 341 | 346 | 358 | 1,312 | 1,507 | |||||||||||||
| Professional fees | 3,129 | 2,914 | 2,976 | 1,365 | 1,586 | 10,384 | 4,641 | |||||||||||||
| Miscellaneous lending expenses | 1,446 | 1,098 | 285 | 451 | 1,128 | 3,280 | 3,006 | |||||||||||||
| Other expenses | 8,244 | 2,828 | 3,202 | 2,897 | 3,347 | 17,171 | 14,883 | |||||||||||||
| Noninterest<br> expense | 37,174 | 30,955 | 29,786 | 27,538 | 27,780 | 125,453 | 122,600 | |||||||||||||
| Income (loss) before income taxes | (20,918 | ) | (1,161 | ) | 2,800 | 1,530 | (14,923 | ) | (17,749 | ) | (11,179 | ) | ||||||||
| Income tax<br> expense (benefit) | (3,428 | ) | (304 | ) | 1,265 | 718 | (4,472 | ) | (1,749 | ) | (1,067 | ) | ||||||||
| Net Income (loss) | (17,490 | ) | (857 | ) | 1,535 | 812 | (10,451 | ) | (16,000 | ) | (10,112 | ) | ||||||||
| Noncontrolling<br> interest | 2,820 | 2,085 | 1,901 | 1,654 | 2,280 | 8,460 | 2,280 | |||||||||||||
| Net income<br> (loss) attributable to Primis' common shareholders | $ | (14,670 | ) | $ | 1,228 | $ | 3,436 | $ | 2,466 | $ | (8,171 | ) | $ | (7,540 | ) | $ | (7,832 | ) |
^(1)^SeeReconciliation of Non-GAAP financial measures.
9
| Primis Financial Corp. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | For Three Months Ended: | ||||||||||||||
| Loan Portfolio Composition | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | 4Q 2023 | ||||||||||
| Loans held for sale | $ | 227,235 | $ | 458,722 | $ | 94,644 | $ | 72,217 | $ | 57,691 | |||||
| Loans secured by real estate: | |||||||||||||||
| Commercial real estate - owner occupied | 475,892 | 463,848 | 463,328 | 458,026 | 455,397 | ||||||||||
| Commercial real estate - non-owner occupied | 610,473 | 609,743 | 612,428 | 577,752 | 578,600 | ||||||||||
| Secured by farmland | 3,706 | 4,356 | 4,758 | 4,341 | 5,044 | ||||||||||
| Construction and land development | 101,243 | 105,541 | 104,886 | 146,908 | 164,742 | ||||||||||
| Residential 1-4 family | 588,855 | 607,313 | 608,035 | 602,124 | 606,226 | ||||||||||
| Multi-family residential | 158,426 | 169,368 | 171,512 | 128,599 | 127,857 | ||||||||||
| Home equity lines of credit | 62,955 | 62,421 | 62,152 | 57,765 | 59,670 | ||||||||||
| Total real estate loans | 2,001,550 | 2,022,590 | 2,027,099 | 1,975,515 | 1,997,536 | ||||||||||
| Commercial loans | 614,162 | 533,998 | 619,365 | 623,804 | 602,623 | ||||||||||
| Paycheck Protection Program loans | 1,927 | 1,941 | 1,969 | 2,003 | 2,023 | ||||||||||
| Consumer loans | 284,955 | 409,754 | 646,590 | 620,745 | 611,583 | ||||||||||
| Total Non-PCD loans | 2,902,594 | 2,968,283 | 3,295,023 | 3,222,067 | 3,213,765 | ||||||||||
| PCD loans | 5,320 | 5,440 | 5,539 | 5,598 | 5,649 | ||||||||||
| Total loans receivable, net of deferred fees | $ | 2,907,914 | $ | 2,973,723 | $ | 3,300,562 | $ | 3,227,665 | $ | 3,219,414 | |||||
| Loans by Risk Grade: | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Pass Grade 1 - Highest Quality | 872 | 820 | 692 | 633 | 875 | ||||||||||
| Pass Grade 2 - Good Quality | 195,669 | 177,763 | 488,728 | 412,593 | 405,019 | ||||||||||
| Pass Grade 3 - Satisfactory Quality | 1,567,228 | 1,509,405 | 1,503,918 | 1,603,053 | 1,626,380 | ||||||||||
| Pass Grade 4 - Pass | 1,042,404 | 1,184,671 | 1,204,268 | 1,177,065 | 1,154,971 | ||||||||||
| Pass Grade 5 - Special Mention | 30,111 | 53,473 | 87,471 | 19,454 | 14,930 | ||||||||||
| Grade 6 - Substandard | 71,630 | 47,591 | 15,485 | 14,867 | 17,239 | ||||||||||
| Grade 7 - Doubtful | - | - | - | - | - | ||||||||||
| Grade 8 - Loss | - | - | - | - | - | ||||||||||
| Total loans | $ | 2,907,914 | $ | 2,973,723 | $ | 3,300,562 | $ | 3,227,665 | $ | 3,219,414 | |||||
| (Dollars in thousands) | For Three Months Ended: | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Asset Quality Information | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | 4Q 2023 | ||||||||||
| Allowance for Credit Losses: | |||||||||||||||
| Balance at beginning of period | $ | (51,132 | ) | $ | (51,574 | ) | $ | (53,456 | ) | $ | (52,209 | ) | $ | (38,541 | ) |
| Provision for for credit losses | (23,046 | ) | (7,511 | ) | (3,119 | ) | (6,508 | ) | (21,310 | ) | |||||
| Net charge-offs | 30,951 | 7,953 | 5,001 | 5,261 | 7,642 | ||||||||||
| Ending balance | $ | (43,227 | ) | $ | (51,132 | ) | $ | (51,574 | ) | $ | (53,456 | ) | $ | (52,209 | ) |
| Reserve for Unfunded Commitments: | |||||||||||||||
| Balance at beginning of period | $ | (1,127 | ) | $ | (1,031 | ) | $ | (1,577 | ) | $ | (1,579 | ) | $ | (1,025 | ) |
| (Expense for) / recovery of unfunded loan commitment reserve | 6 | (96 | ) | 546 | 2 | (554 | ) | ||||||||
| Total Reserve for Unfunded Commitments | $ | (1,121 | ) | $ | (1,127 | ) | $ | (1,031 | ) | $ | (1,577 | ) | $ | (1,579 | ) |
| Non-Performing Assets: | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Nonaccrual loans | $ | 15,027 | $ | 14,424 | $ | 11,289 | $ | 10,139 | $ | 9,095 | |||||
| Accruing loans delinquent 90 days or more | 1,713 | 1,714 | 1,897 | 1,714 | 1,714 | ||||||||||
| Total non-performing assets | $ | 16,740 | $ | 16,138 | $ | 13,186 | $ | 11,853 | $ | 10,809 | |||||
| SBA guaranteed portion of non-performing loans | $ | 5,921 | $ | 5,954 | $ | 3,268 | $ | 3,095 | $ | 3,115 |
10
| Primis Financial Corp. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | For<br> Three Months Ended: | For<br> Twelve Months Ended: | |||||||||||||||||||
| Average Balance Sheet | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | 4Q 2023 | 4Q 2024 | 4Q 2023 | ||||||||||||||
| Assets | |||||||||||||||||||||
| Loans held for sale | $ | 100,027 | $ | 98,110 | $ | 84,389 | $ | 58,896 | $ | 48,380 | $ | 85,430 | $ | 44,643 | |||||||
| Loans, net of deferred fees | 3,127,472 | 3,324,157 | 3,266,651 | 3,206,888 | 3,208,295 | 3,231,262 | 3,126,717 | ||||||||||||||
| Investment securities | 253,120 | 242,631 | 244,308 | 241,179 | 228,335 | 245,323 | 237,452 | ||||||||||||||
| Other earning<br> assets | 96,697 | 83,405 | 73,697 | 77,067 | 79,925 | 82,757 | 281,052 | ||||||||||||||
| Total earning assets | 3,577,316 | 3,748,303 | 3,669,045 | 3,584,030 | 3,564,935 | 3,644,772 | 3,689,864 | ||||||||||||||
| Other assets | 237,793 | 243,715 | 243,196 | 248,082 | 262,977 | 242,566 | 261,265 | ||||||||||||||
| Total<br> assets | $ | 3,815,109 | $ | 3,992,018 | $ | 3,912,241 | $ | 3,832,112 | $ | 3,827,912 | $ | 3,887,338 | $ | 3,951,129 | |||||||
| Liabilities and equity | |||||||||||||||||||||
| Demand deposits | $ | 437,388 | $ | 421,908 | $ | 433,315 | $ | 458,306 | $ | 473,750 | $ | 441,520 | $ | 495,107 | |||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW and other demand accounts | 787,884 | 748,202 | 778,458 | 773,943 | 782,305 | 772,099 | 784,680 | ||||||||||||||
| Money market accounts | 819,803 | 859,988 | 823,156 | 814,147 | 790,971 | 829,331 | 831,196 | ||||||||||||||
| Savings accounts | 767,342 | 866,375 | 866,652 | 800,328 | 783,432 | 825,129 | 777,143 | ||||||||||||||
| Time deposits | 404,682 | 425,238 | 423,107 | 431,340 | 451,521 | 421,058 | 474,178 | ||||||||||||||
| Total<br> Deposits | 3,217,099 | 3,321,711 | 3,324,688 | 3,278,064 | 3,281,979 | 3,289,137 | 3,362,304 | ||||||||||||||
| Borrowings | 160,886 | 238,994 | 158,919 | 120,188 | 120,213 | 169,912 | 159,442 | ||||||||||||||
| Total Funding | 3,377,985 | 3,560,705 | 3,483,607 | 3,398,252 | 3,402,192 | 3,459,049 | 3,521,746 | ||||||||||||||
| Other Liabilities | 39,566 | 36,527 | 34,494 | 34,900 | 39,056 | 36,421 | 35,494 | ||||||||||||||
| Total liabilites | 3,417,551 | 3,597,232 | 3,518,101 | 3,433,152 | 3,441,248 | 3,495,470 | 3,557,240 | ||||||||||||||
| Primis common stockholders' equity | 382,466 | 377,314 | 374,731 | 378,008 | 379,442 | 373,637 | 393,302 | ||||||||||||||
| Noncontrolling<br> interest | 15,092 | 17,472 | 19,409 | 20,952 | 7,222 | 18,231 | 587 | ||||||||||||||
| Total<br> stockholders' equity | 397,558 | 394,786 | 394,140 | 398,960 | 386,664 | 391,868 | 393,889 | ||||||||||||||
| Total<br> liabilities and stockholders' equity | $ | 3,815,109 | $ | 3,992,018 | $ | 3,912,241 | $ | 3,832,112 | $ | 3,827,912 | $ | 3,887,338 | $ | 3,951,129 | |||||||
| Net<br> Interest Income | |||||||||||||||||||||
| Loans held for sale | $ | 1,553 | $ | 1,589 | $ | 1,521 | $ | 907 | $ | 842 | $ | 5,570 | $ | 2,806 | |||||||
| Loans | 46,893 | 52,699 | 48,024 | 46,816 | 46,723 | 194,432 | 169,982 | ||||||||||||||
| Investment securities | 1,894 | 1,799 | 1,805 | 1,715 | 1,645 | 7,213 | 6,373 | ||||||||||||||
| Other earning<br> assets | 1,060 | 1,017 | 841 | 898 | 953 | 3,816 | 13,457 | ||||||||||||||
| Total<br> Earning Assets Income | 51,400 | 57,104 | 52,191 | 50,336 | 50,163 | 211,031 | 192,618 | ||||||||||||||
| Non-interest bearing DDA | - | - | - | - | - | - | - | ||||||||||||||
| NOW and other interest-bearing<br> demand accounts | 4,771 | 4,630 | 4,827 | 4,467 | 4,334 | 18,695 | 15,404 | ||||||||||||||
| Money market accounts | 6,190 | 7,432 | 6,788 | 6,512 | 6,129 | 26,923 | 23,717 | ||||||||||||||
| Savings accounts | 7,587 | 8,918 | 8,912 | 8,045 | 7,860 | 33,462 | 29,774 | ||||||||||||||
| Time deposits | 4,127 | 4,371 | 4,095 | 3,990 | 3,964 | 16,582 | 14,795 | ||||||||||||||
| Total<br> Deposit Costs | 22,675 | 25,351 | 24,622 | 23,014 | 22,287 | 95,662 | 83,690 | ||||||||||||||
| Borrowings | 2,585 | 3,730 | 2,716 | 2,053 | 2,150 | 11,084 | 10,217 | ||||||||||||||
| Total<br> Funding Costs | 25,260 | 29,081 | 27,338 | 25,067 | 24,437 | 106,746 | 93,907 | ||||||||||||||
| Net<br> Interest Income | $ | 26,140 | $ | 28,023 | $ | 24,853 | $ | 25,269 | $ | 25,726 | $ | 104,285 | $ | 98,711 | |||||||
| Net<br> Interest Margin | |||||||||||||||||||||
| Loans held for sale | 6.18 | % | 6.44 | % | 7.25 | % | 6.19 | % | 6.90 | % | 6.52 | % | 6.29 | % | |||||||
| Loans | 5.96 | % | 6.31 | % | 5.91 | % | 5.87 | % | 5.78 | % | 6.02 | % | 5.44 | % | |||||||
| Investments | 2.98 | % | 2.95 | % | 2.97 | % | 2.86 | % | 2.86 | % | 2.94 | % | 2.68 | % | |||||||
| Other Earning<br> Assets | 4.36 | % | 4.85 | % | 4.59 | % | 4.69 | % | 4.73 | % | 4.61 | % | 4.79 | % | |||||||
| Total<br> Earning Assets | 5.72 | % | 6.06 | % | 5.72 | % | 5.65 | % | 5.58 | % | 5.79 | % | 5.22 | % | |||||||
| NOW | 2.41 | % | 2.46 | % | 2.49 | % | 2.32 | % | 2.20 | % | 2.42 | % | 1.96 | % | |||||||
| MMDA | 3.00 | % | 3.44 | % | 3.32 | % | 3.22 | % | 3.07 | % | 3.25 | % | 2.85 | % | |||||||
| Savings | 3.93 | % | 4.10 | % | 4.14 | % | 4.04 | % | 3.98 | % | 4.06 | % | 3.83 | % | |||||||
| CDs | 4.06 | % | 4.09 | % | 3.89 | % | 3.72 | % | 3.48 | % | 3.94 | % | 3.12 | % | |||||||
| Cost<br> of Interest Bearing Deposits | 3.25 | % | 3.48 | % | 3.42 | % | 3.28 | % | 3.15 | % | 3.36 | % | 2.92 | % | |||||||
| Cost of Deposits | 2.80 | % | 3.04 | % | 2.98 | % | 2.82 | % | 2.69 | % | 2.91 | % | 2.49 | % | |||||||
| Other Funding | 6.39 | % | 6.22 | % | 6.89 | % | 6.90 | % | 7.10 | % | 6.52 | % | 6.41 | % | |||||||
| Total<br> Cost of Funds | 2.97 | % | 3.25 | % | 3.16 | % | 2.97 | % | 2.85 | % | 3.09 | % | 2.67 | % | |||||||
| Net Interest Margin | 2.91 | % | 2.97 | % | 2.72 | % | 2.84 | % | 2.86 | % | 2.86 | % | 2.68 | % | |||||||
| Net Interest Spread | 2.30 | % | 2.37 | % | 2.11 | % | 2.22 | % | 2.27 | % | 2.25 | % | 2.12 | % |
11
| Primis Financial Corp. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share data) | For Three<br> Months Ended: | For Twelve<br> Months Ended: | |||||||||||||||||||
| Reconciliation of Non-GAAP<br> items: | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | 4Q 2023 | 4Q 2024 | 4Q 2023 | ||||||||||||||
| Net income (loss)<br> attributable to Primis' common shareholders | $ | (14,670 | ) | $ | 1,228 | $ | 3,436 | $ | 2,466 | $ | (8,171 | ) | $ | (7,540 | ) | $ | (7,832 | ) | |||
| Non-GAAP adjustments to Net Income: | |||||||||||||||||||||
| Branch Consolidation / Other<br> restructuring | - | - | - | - | 449 | - | 1,937 | ||||||||||||||
| Loan officer fraud, operational<br> losses | - | - | - | - | - | - | 200 | ||||||||||||||
| Professional fee expense related<br> to accounting matters and LPF sale | 1,782 | 1,352 | 1,453 | 438 | - | 5,025 | - | ||||||||||||||
| Professional fee expenses related<br> to Panacea investment | - | - | - | - | 194 | - | 194 | ||||||||||||||
| Goodwill impairment | - | - | - | - | - | - | 11,150 | ||||||||||||||
| Gains on sale of closed bank<br> branch buildings | - | (352 | ) | (124 | ) | - | - | (476 | ) | - | |||||||||||
| Gain on sale of Life Premium<br> Finance portfolio, net of broker fees | (4,723 | ) | - | - | - | - | (4,723 | ) | - | ||||||||||||
| Consumer program fraud losses | 1,250 | - | - | - | - | 1,250 | - | ||||||||||||||
| Income tax<br> effect | 365 | (216 | ) | (287 | ) | (95 | ) | (139 | ) | (232 | ) | (503 | ) | ||||||||
| Net income<br> (loss) attributable to Primis' common shareholders adjusted for nonrecurring income and expenses | $ | (15,996 | ) | $ | 2,012 | $ | 4,478 | $ | 2,809 | $ | (7,667 | ) | $ | (6,696 | ) | $ | 5,146 | ||||
| Net income (loss) attributable<br> to Primis' common shareholders | $ | (14,670 | ) | $ | 1,228 | $ | 3,436 | $ | 2,466 | $ | (8,171 | ) | $ | (7,540 | ) | $ | (7,832 | ) | |||
| Income tax expense (benefit) | (3,428 | ) | (304 | ) | 1,265 | 718 | (4,472 | ) | (1,749 | ) | (1,067 | ) | |||||||||
| Provision<br> for credit losses (incl. unfunded commitment expense) | 23,040 | 7,607 | 2,573 | 6,506 | 21,864 | 33,220 | 32,636 | ||||||||||||||
| Pre-tax pre-provision earnings | $ | 4,942 | $ | 8,531 | $ | 7,274 | $ | 9,690 | $ | 9,221 | $ | 23,931 | $ | 23,737 | |||||||
| Effect of<br> adjustment for nonrecurring income and expenses | (1,691 | ) | 1,000 | 1,329 | 438 | 643 | 1,076 | 13,481 | |||||||||||||
| Pre-tax<br> pre-provision operating earnings | $ | 3,251 | $ | 9,531 | $ | 8,603 | $ | 10,128 | $ | 9,864 | $ | 25,007 | $ | 37,218 | |||||||
| Return on average assets | (1.53 | )% | 0.12 | % | 0.35 | % | 0.26 | % | (0.85 | )% | (0.19 | )% | (0.20 | )% | |||||||
| Effect of<br> adjustment for nonrecurring income and expenses | (0.14 | )% | 0.08 | % | 0.11 | % | 0.03 | % | 0.05 | % | 0.02 | % | 0.33 | % | |||||||
| Operating<br> return on average assets | (1.67 | )% | 0.20 | % | 0.46 | % | 0.29 | % | (0.80 | )% | (0.17 | )% | 0.13 | % | |||||||
| Return on average assets | (1.53 | )% | 0.12 | % | 0.35 | % | 0.26 | % | (0.85 | )% | (0.19 | )% | (0.20 | )% | |||||||
| Effect of tax expense | (0.36 | )% | (0.03 | )% | 0.13 | % | 0.08 | % | (0.46 | )% | (0.03 | )% | (0.03 | )% | |||||||
| Effect of<br> provision for credit losses (incl. unfunded commitment expense) | 2.41 | % | 0.77 | % | 0.27 | % | 0.68 | % | 2.27 | % | 0.85 | % | 0.83 | % | |||||||
| Pre-tax pre-provision return<br> on average assets | 0.52 | % | 0.86 | % | 0.75 | % | 1.02 | % | 0.96 | % | 0.62 | % | 0.60 | % | |||||||
| Effect of<br> adjustment for nonrecurring income and expenses and expenses | (0.18 | )% | 0.10 | % | 0.10 | % | 0.04 | % | 0.07 | % | 0.03 | % | 0.34 | % | |||||||
| Pre-tax<br> pre-provision operating return on average assets | 0.34 | % | 0.96 | % | 0.85 | % | 1.06 | % | 1.03 | % | 0.65 | % | 0.94 | % | |||||||
| Return on average common equity | (15.26 | )% | 1.31 | % | 3.69 | % | 2.59 | % | (8.54 | )% | (2.02 | )% | (1.99 | )% | |||||||
| Effect of<br> adjustment for nonrecurring income and expenses | (1.38 | )% | 0.84 | % | 1.12 | % | 0.36 | % | 0.53 | % | 0.22 | % | 3.30 | % | |||||||
| Operating return on average common<br> equity | (16.64 | )% | 2.15 | % | 4.81 | % | 2.95 | % | (8.01 | )% | (1.79 | )% | 1.31 | % | |||||||
| Effect of<br> goodwill and other intangible assets | (5.43 | )% | 0.71 | % | 1.61 | % | 0.99 | % | (2.70 | )% | (0.61 | )% | 0.47 | % | |||||||
| Operating<br> return on average tangible common equity | (22.07 | )% | 2.86 | % | 6.42 | % | 3.94 | % | (10.71 | )% | (2.40 | )% | 1.78 | % | |||||||
| Efficiency ratio | 94.59 | % | 82.98 | % | 83.42 | % | 77.41 | % | 81.31 | % | 84.83 | % | 85.16 | % | |||||||
| Effect of<br> adjustment for nonrecurring income and expenses | 4.16 | % | (2.87 | )% | (3.79 | )% | (1.24 | )% | (1.88 | )% | (1.30 | )% | (9.36 | )% | |||||||
| Operating<br> efficiency ratio | 98.74 | % | 80.11 | % | 79.63 | % | 76.17 | % | 79.43 | % | 83.52 | % | 75.80 | % | |||||||
| Earnings per common share - Basic | $ | (0.59 | ) | $ | 0.05 | $ | 0.14 | $ | 0.10 | $ | (0.33 | ) | $ | (0.31 | ) | $ | (0.32 | ) | |||
| Effect of<br> adjustment for nonrecurring income and expenses | (0.05 | ) | 0.03 | 0.04 | 0.01 | 0.02 | 0.03 | 0.53 | |||||||||||||
| Operating<br> earnings per common share - Basic | $ | (0.65 | ) | $ | 0.08 | $ | 0.18 | $ | 0.11 | $ | (0.31 | ) | $ | (0.27 | ) | $ | 0.21 | ||||
| Earnings per common share - Diluted | $ | (0.59 | ) | $ | 0.05 | $ | 0.14 | $ | 0.10 | $ | (0.33 | ) | $ | (0.31 | ) | $ | (0.32 | ) | |||
| Effect of<br> adjustment for nonrecurring income and expenses | (0.05 | ) | 0.03 | 0.04 | 0.01 | 0.02 | 0.03 | 0.53 | |||||||||||||
| Operating<br> earnings per common share - Diluted | $ | (0.65 | ) | $ | 0.08 | $ | 0.18 | $ | 0.11 | $ | (0.31 | ) | $ | (0.27 | ) | $ | 0.21 | ||||
| Book value per common share | $ | 14.58 | $ | 15.41 | $ | 15.22 | $ | 15.16 | $ | 15.23 | $ | 14.58 | $ | 15.23 | |||||||
| Effect of<br> goodwill and other intangible assets | (3.81 | ) | (3.82 | ) | (3.84 | ) | (3.85 | ) | (3.86 | ) | (3.81 | ) | (3.86 | ) | |||||||
| Tangible book value per<br> common share | $ | 10.77 | $ | 11.59 | $ | 11.38 | $ | 11.31 | $ | 11.37 | $ | 10.77 | $ | 11.37 | |||||||
| Net charge-offs (recoveries)<br> as a percent of average loans (annualized) | 3.84 | % | 0.93 | % | 0.60 | % | 0.64 | % | 0.94 | % | 1.48 | % | 0.45 | % | |||||||
| Impact of<br> third-party consumer portfolio | (3.79 | )% | (0.82 | )% | (0.67 | )% | (0.54 | )% | (0.37 | )% | (1.43 | )% | (0.25 | )% | |||||||
| Core net<br> charge-offs (recoveries) as a percent of average loans (annualized) | 0.05 | % | 0.11 | % | (0.07 | )% | 0.10 | % | 0.57 | % | 0.05 | % | 0.20 | % | |||||||
| Total Primis common stockholders'<br> equity | $ | 360,462 | $ | 381,022 | $ | 376,047 | $ | 374,577 | $ | 376,161 | $ | 360,462 | $ | 376,161 | |||||||
| Less goodwill<br> and other intangible assets | (94,124 | ) | (94,444 | ) | (94,768 | ) | (95,092 | ) | (95,417 | ) | (94,124 | ) | (95,417 | ) | |||||||
| Tangible<br> common equity | $ | 266,338 | $ | 286,578 | $ | 281,279 | $ | 279,485 | $ | 280,744 | $ | 266,338 | $ | 280,744 | |||||||
| Common equity to assets | 9.75 | % | 9.47 | % | 9.48 | % | 9.63 | % | 9.75 | % | 9.75 | % | 9.75 | % | |||||||
| Effect of<br> goodwill and other intangible assets | (2.36 | )% | (2.18 | )% | (2.21 | )% | (2.27 | )% | (2.29 | )% | (2.36 | )% | (2.29 | )% | |||||||
| Tangible<br> common equity to tangible assets | 7.39 | % | 7.29 | % | 7.27 | % | 7.36 | % | 7.46 | % | 7.39 | % | 7.46 | % |
12
Exhibit 99.2
Fourth Quarter 2024 NASDAQ: FRST
This presentation and certain of our other filings with the Securities and Exchange Commission contain statements that consti tut e “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 Securities E xch ange Act of 1934, as amended. All statements other than statements of historical fact are forward - looking statements. Such statements can generally be identified by such words as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and other similar words or expressions of the future or otherwise regarding the outlook for the Company’s future business and financial performance and/or the performance of the banking industry and economy in general . T hese forward - looking statements include, but are not limited to, our expectations regarding our future operating and financial performance, including the preliminary estimate d f inancial and operating information presented herein, which is subject to adjustment; our outlook and long - term goals for future growth and new offerings and services; our expectatio ns regarding net interest margin; expectations on our growth strategy, expense management, capital management and future profitability; expectations on credit quality and performa nce ; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward - looking statements are not guarantees of future performance and involv e known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, per formance or achievements expressed or implied by such forward - looking statements. Forward - looking statements are based on the information known to, and current beliefs and expec tations of, the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward - loo king statements. Factors that might cause such differences include, but are not limited to: the Company’s ability to implement its various strategic and growth initiatives, in cluding its recently established Panacea Financial Division digital banking platform, V1BE fulfillment service, mortgage warehouse division and Primis Mortgage Company; the risks associ ate d with the Life Premium Finance sale, including failure to achieve the expected impact to our operating results; competitive pressures among financial institutions increasin g s ignificantly; changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices; changes in management’s plans fo r t he future; credit risk associated with our lending activities; the impact of current and future economic and market conditions generally (including seasonality) and in the fina nci al services industry, nationally and within our primary market areas; changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortag es and supply chain disruptions; the impact of tariffs and trade policies; changes in accounting principles, policies, or guidelines; adverse results from current or future litigation, re gulatory examinations or other legal and/or regulatory actions; potential impacts of adverse developments in the banking industry highlighted by high - profile bank failures, including impacts o n customer confidence, deposit outflows, liquidity and the regulatory response thereto; potential increases in the provision for credit losses; our ability to identify and address inc reased cybersecurity risks, including those impacting vendors and other third parties; fraud or misconduct by internal or external actors, which we may not be able to prevent, det ect or mitigate; acts of God or of war or other conflicts, including the current Ukraine/Russia conflict and Israel/Hamas conflict, acts of terrorism, pandemics or other catastrophic e ven ts that may affect general economic conditions; and other general competitive, economic, political, and market factors, including those affecting our business, operations, prici ng, products, or services. Forward - looking statements speak only as of the date on which such statements are made. These forward - looking statements are bas ed upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertaint ies , including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 1 0 - K for the year ended December 31, 2023, under the captions “Cautionary Note Regarding Forward - Looking Statements” and “Risk Factors,” and in the Company’s Quarterly Reports o n Form 10 - Q and Current Reports on Form 8 - K. The Company undertakes no obligation to update any forward - looking statement to reflect events or circumstances after the date o n which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward - looking statements. 2
Statements included in this presentation include non - GAAP financial measures and should be read along with the accompanying tabl es. Primis uses non - GAAP financial measures to analyze its performance. The measures entitled net income adjusted for nonrecurring income a nd expenses; pre - tax pre - provision operating earnings; operating return on average assets; pre - tax pre - provision operating return o n average assets; operating return on average equity; operating return on average tangible equity; operating efficiency ratio; operating earnin gs per share – basic; operating earnings per share – diluted; tangible book value per share; tangible common equity; tangible common equity to tangibl e assets; and core net interest margin are not measures recognized under GAAP and therefore are considered non - GAAP financial measures. We use the term “operating” to describe a financial measure that excludes income or expense considered to be non - recurring in nature. Items ide ntified as non - operating are those that, when excluded from a reported financial measure, provide management or the reader with a measure th at may be more indicative of forward - looking trends in our business. A reconciliation of these non - GAAP financial measures to the most compara ble GAAP measures is provided in the Reconciliation of Non - GAAP Items table. Management believes that these non - GAAP financial measures provide additional useful information about Primis that allows manage ment and investors to evaluate the ongoing operating results, financial strength and performance of Primis and provide meaningful comp ari son to its peers. Non - GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as p romulgated under GAAP, and investors should consider Primis’ performance and financial condition as reported under GAAP and all other re lev ant information when assessing the performance or financial condition of Primis. Non - GAAP financial measures are not standardized a nd, therefore, it may not be possible to compare these measures with other companies that present measures having the same or similar names. Non - GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a su bstitute for analysis of the results or financial condition as reported under GAAP. 3
Corp. Headquarters: McLean, VA Bank Headquarters: Glen Allen, VA Branches: 24 Ticker (NASDAQ): FRST Valuation Market Capitalization: $287 million Price / Book Value per Share 0.79x Price / Tangible Book Value (1) : 1.08x Price / 2025 Estimated EPS (2) : 8.16x Price / 2026 Estimated EPS (2) : 7.48x Dividend Yield (3) : 3.45% 4 Pricing as of January 27, 2025. Financial data as of or for the three months ended December 31, 2024. (1) See reconciliation of Non - GAAP financial measures on slide 12. (2) Mean analyst estimates per Capital IQ. (3) Assumes $0.40 annualized dividend.
Loans: $231 billion Customer Deposits: $981 million Lending now focused on Mortgage Warehouse and c onstruction - perm lending alongside national builder. Deposit strategy focused on leveraging uniqueness and checking ability with Primis - owned affinity brands and influential sponsors and brand endorsers. Digital Platform / National LOBs Loans (Portfolio & HFS): $200 million 2024 Production: $800 million 2025 Run Rate: $1.25 billion Standout grower in the shrinking mortgage industry for 2 years Bought a platform with virtually no production. Recruiting steadily towards $2 billion. 100% of national construction - perm is government, one - time close. Should be 20% higher on GOS and 20% cheaper on commission. Primis Mortgage 5 Total Loans: $2.91 billion Total Customer Deposits: $3.31 billion Panacea Financial Loans: $433 million Deposits: $92 million Nation’s largest and most competitive FinTech focused on doctors, vets and dentists. Should have 10,000 clients by year end with deposits, loans and other unique offerings that tie them hard into Panacea. Deposit pipeline and capabilities that extend beyond the affinity brand and drastically improve profitability. Loans: $ 2.1 billion Customer Deposits: $2.2 billion 100% our primary focus in 2025. Community Bank operating 24 branches in VA and MD. Low focus on CRE. C&I Specialties. No pressure to lunge at CRE or high - rate deposits because of leverage from remaining company. Highly valuable deposit and loan franchise. Core Community Bank
6 4Q24 CoD Reg. Bank YE Cost % of Tot. Amount ($B) Category 2.47% AUB 0% 19.7% 0.43 DDA 2.91% FVCB 0.94% 22.4% 0.49 NOW 2.07% TOWNE 2.98% 35.2% 0.76 MMDA 2.20% UCB 0.23% 6.9% 0.15 Savings 1.94% PEBO 3.75% 15.7% 0.34 CDs 1.81% SSB 1.87% 2.17 1.97% WSBC • Core franchise leveraged our Digital Platform success to focus only on strong, profitable relationships (fewer rate shoppers) • Cost of Deposits about 100bps below our Community Bank Competition and more in line with larger regional bank competition • Should improve further with continued DDA success to 25% of total deposits • Commercial focus includes V1BE as a driver for deposit success • Launched in 2021…fully developed by Primis, 100% owned by Primis • 3,000 unique users…lost only 1 customer since inception • Approx. $200 million of checking accounts serviced by the app • Increases our close rate by 5x and shortens the sales cycle by 3 – 6 months on commercial checking accounts 2,072 2,215 3,632 0 1,000 2,000 3,000 4,000 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Monthly V1BE Requests by Customers 47% CAGR Core Community Bank Leveraged Our Digital Franchise Cost of Deposits Looks Much More Like Regional Bank Peers Deposits per Branch (1) (1) Deposits per branch includes balances that were swept off balance sheet in the respective period and excludes brokered de pos its. Dollars in thousands. $44,646 $57,882 $69,082 $81,949 $137,822 $137,834 2019 2020 2021 2022 2023 2024
7 • Our core bank is focused on new relationships, not just new business with existing relationships • No pressure to lunge at commercial real estate or high - rate deposits because of the leverage from remaining Company • Commercial real estate concentrations well below regulatory guidelines • Organizational changes and selective hires in key markets driving impressive pipeline growth • Substantial opportunity to reprice lower yielding assets with $351 million of loans repricing in 2025 (WAC of 5.90%) and $300 million repricing in 2026 (WAC of 4.59%) % of New with DDA Account % New Cust. to Bank New Loans (75% Close Rate) Total Loan Pipeline ($MM) Quarter 58% 21% $44 $51 Q4’23 66% 41% $48 $60 Q1’24 61% 48% $63 $79 Q2’24 79% 69% $53 $74 Q3’24 93% 88% $89 $119 Q4’24 Net Interest Spread – Core Bank Core Bank Loan Pipeline 3.70% 3.80% 3.90% 4.00% 4.10% Dec 23 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24
8 Closed Mortgage Volume ($MM) $291 $605 $801 $1,250 2022 2023 2024 2025 Est. Geographic Reach • Demonstrated growth in difficult mortgage environment with disciplined recruiting • Volume per loan officer approximately $1 million in 2024, over twice the level of 2022 • Expectations for 2025 don’t include incremental volume from national construction - perm strategy
Launched in November 2022 • One of only a handful of fully - functional, all - digital checking accounts in the U.S. • 18,000 customers • Average customer has been with Primis for 1.5 years • 19% of customers are new customers in our footprint • Incremental offering is FF less 15bps • Virtually no marketing • Open 300 - 500 accounts per quarter • 75% of the money came from top 10 banks in the U.S., not other Fintechs or online banks. Launched in December 2024 As of January 2025, we’ve approved: • 54 customers • Approved lines of $424 million • Average yield (w/ fees) in Dec of SOFR plus 340bps Building Reputation and Infrastructure. Focusing on smaller lines through Q1 2025. Will augment offering with larger lines and MSR relationships through 2025. Believe it is highly likely that we can more than replace LPF with this asset class. 9 National Mortage Warehouse One - Time Close Const/Perm as Preferred Lender for National Builders National Digital – Existing National Digital – Affinity Gained Preferred Status for a $15 billion builder in Jan 2025. Approved to offer lending solutions in 85 offices. Solution is a: • One - time close Government program • Prime plus offering on rate with some fee potential (0.50 - 1.00%) • Because it’s one - time, 100% of the secondary volume we approve will go through Primis Mortgage Currently focused on a single National Builder but our solution is unique and priced aggressively. Expect adoption to be attractive. Unique concept launching mid - March 2025 • Mimics strategy we launched with Panacea but much more focused on deposit side • Leverages nationally - known brand ambassadors and influencers to drive adoption. Unique offering because these ambassadors and influencers have not been approached or retained by financial institutions. The Panacea market cap fully proves the value proposition. • No BaaS – all of the concepts are built, developed and managed by Primis alone. Digital Deposit Platform Simple and Scalable National Lending
10 • Margin opportunity approximately 50% greater than Life Premium Finance • Combined revenue opportunity as much as $44 million annually at run - rate balances ($1 to $1.3 billion combined) and implied margin and doesn’t require additional Fed moves • The combination of efficient and scalable business lines with a unique digital platform provides tremendous opportunity for operating leverage • Infrastructure already in place • Incremental expense as businesses scale significantly lower than revenue growth Avg. Bal. Approx. ($MM) Yield/Cost Pricing $ 275 7.25% Various SOFR Terms Life Premium Finance $ 275 5.07% Fed Effective less 25bps Digital Funding $ 6.0 2.18% Implied Margin / Revenue Avg. Bal. Approx. ($MM) Yield/Cost Pricing $ 350 7.47% SOFR + 315bps Warehouse Lending 100 8.50% Prime + 100bps National Const - Perm $ 450 4.33% Fed Effective Digital Funding $ 15.2 3.38% Implied Margin / Revenue 2025 Expectations – New Strategies 2024 Approx. Results – Sold Assets
11 • Life - to - date loan originations of ~ $ 615 mil. (committed bal.) , +35% y/y • Q4’24 originations of $59 mil. • Total deposits of $ 92 mil., + 65 % y/y • Opened 346 deposit accounts • 1/1/25 deposit cost of 1.65 % • 2024 pre - tax earnings contribution of $6.6 mil., or 1.90% pre - tax ROA • #1 Ranked “Bank For Doctors” on Google • ~6,000 doctors and practices nationwide • Preferred partner for 38 national and state medical, dental and veterinary associations and organizations representing >415,000 active doctors in the U.S. Q4’24 Summary Q4’24 Loan Composition ($ 433.8 million) 69.3% 17.0% 13.7% Commercial PRN Student Refi
12 $ 14.58 Book value per common share – December 31, 2024 (3.81) Effect of goodwill and other intangible assets $ 10.77 Tangible book value per common share – December 31, 2024