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Primis(FRST) - 2024 Q3 - Quarterly Results
FRSTPrimis(FRST)2024-10-24 21:05

Financial Performance - Net income available to common shareholders for Q3 2024 was 1.2millionor1.2 million or 0.05 per diluted share, compared to a net loss of 6.0millionor6.0 million or 0.24 per diluted share in Q3 2023[1] - Year-to-date earnings for 2024 were 7.5millionor7.5 million or 0.30 per diluted share, compared to 0.3millionor0.3 million or 0.01 per diluted share in the same period in 2023[1] - Net income attributable to Primis' common shareholders for Q3 2024 was 1.2million,comparedtoalossof1.2 million, compared to a loss of 6.0 million in Q3 2023[45] - Adjusted net income for Q3 2024 was 2.0million,upfrom2.0 million, up from 5.3 million in Q3 2023[45] - Pre-tax pre-provision operating earnings for Q3 2024 were 9.5million,comparedto9.5 million, compared to 8.2 million in Q3 2023[45] - Operating return on average assets for Q3 2024 was 0.20%, up from 0.54% in Q3 2023[45] - Operating return on average common equity for Q3 2024 was 2.11%, compared to 5.35% in Q3 2023[45] - Operating efficiency ratio improved to 80.35% in Q3 2024 from 75.17% in Q3 2023[45] - Basic operating earnings per common share were 0.08inQ32024,downfrom0.08 in Q3 2024, down from 0.21 in Q3 2023[45] - Return on average assets improved to 0.12% in 3Q 2024, compared to (0.85)% in 4Q 2023 and (0.62)% in 3Q 2023[29] - Operating return on average common equity rose to 2.11% in 3Q 2024, up from (7.91)% in 4Q 2023 and 5.35% in 3Q 2023[29] Interest Income and Margin - Net interest income increased by 3.2millionor133.2 million or 13% to 28.0 million in Q3 2024 compared to Q2 2024, with a net interest margin of 2.97%[7] - Interest income increased by 9.4% to 57.1millioninQ32024comparedto57.1 million in Q3 2024 compared to 52.2 million in Q2 2024[8] - Net interest margin increased to 2.97% in 3Q 2024, compared to 2.72% in 2Q 2024 and 2.70% in 3Q 2023[29] - Net interest income rose to 28,023thousandin3Q2024,upfrom28,023 thousand in 3Q 2024, up from 24,853 thousand in 2Q 2024[35] - Interest and dividend income grew to 57,112thousandin3Q2024,upfrom57,112 thousand in 3Q 2024, up from 52,199 thousand in 2Q 2024[35] - Net interest income after provision for credit losses was 20,512thousandin3Q2024,downfrom20,512 thousand in 3Q 2024, down from 21,734 thousand in 2Q 2024[35] - Net interest margin for loans held for sale was 6.44% in 3Q 2024, down from 7.25% in 2Q 2024 but up from 6.90% in 4Q 2023[43] - Net Interest Margin improved to 2.97% from 2.61%[44] - Net Interest Spread widened to 2.37% from 2.13%[44] Loans and Deposits - Loans held for investment decreased to 2.97billionatSeptember30,2024,comparedto2.97 billion at September 30, 2024, compared to 3.30 billion at June 30, 2024, with the Panacea and Life Premium Finance divisions showing loan growth of 4.4% and 11.1%, respectively[13] - Total deposits slightly decreased to 3.31billioninQ32024from3.31 billion in Q3 2024 from 3.34 billion in Q2 2024, with noninterest-bearing deposits at 421million[17]−PanaceaFinancialDivisiongrewoutstandingloansto421 million[17] - Panacea Financial Division grew outstanding loans to 392 million in Q3 2024, up 16.5millionfromQ22024,withdepositsat16.5 million from Q2 2024, with deposits at 90 million and a weighted average cost of 2.00%[19] - Gross loans to deposits ratio decreased to 89.68% in 3Q 2024, down from 98.95% in 2Q 2024 and 96.37% in 3Q 2023[29] - Net loans decreased to 2,913,988thousandin3Q2024from2,913,988 thousand in 3Q 2024 from 3,248,988 thousand in 2Q 2024[33] - Total deposits slightly decreased to 3,306,431thousandin3Q2024from3,306,431 thousand in 3Q 2024 from 3,335,463 thousand in 2Q 2024[34] - Loans held for sale increased significantly to 467.3millionin3Q2024,upfrom467.3 million in 3Q 2024, up from 94.6 million in 2Q 2024[38] - Total real estate loans remained stable at 2.02billionin3Q2024,comparedto2.02 billion in 3Q 2024, compared to 2.03 billion in 2Q 2024[38] - Commercial loans decreased to 526.8millionin3Q2024from526.8 million in 3Q 2024 from 619.4 million in 2Q 2024[38] - Loans increased to 6.31% from 5.32%[44] - NOW accounts increased to 2.46% from 1.88%[44] - Savings accounts grew to 4.10% from 3.78%[44] - CDs decreased to 4.09% from 3.01%[44] Noninterest Income and Expense - Noninterest income decreased to 9.3millioninQ32024comparedto9.3 million in Q3 2024 compared to 11.2 million in Q2 2024, with a 1.2millionreductioninincomerelatedtotheConsumerProgram[10]−Noninterestexpensewas1.2 million reduction in income related to the Consumer Program[10] - Noninterest expense was 31.0 million in Q3 2024, with a core expense burden of 19.8million,inlinewiththeaverageforthelastfivequarters[11][12]−Mortgagebankingincomeincreasedto19.8 million, in line with the average for the last five quarters[11][12] - Mortgage banking income increased to 6.8 million in the latest quarter, up from 5.6millioninthepreviousquarter[36]−Noninterestincomedecreasedto5.6 million in the previous quarter[36] - Noninterest income decreased to 9.3 million from 10.3millioninthepriorquarter[36]CreditQualityandProvisions−Netcharge−offsincreasedto10.3 million in the prior quarter[36] Credit Quality and Provisions - Net charge-offs increased to 8.0 million in Q3 2024, up from 5.0millioninQ22024,withConsumerProgramnetcharge−offsat5.0 million in Q2 2024, with Consumer Program net charge-offs at 6.7 million and Core net charge-offs at 1.3million(0.151.3 million (0.15% of average loans)[16] - Provision for credit losses increased to 7,511 thousand in 3Q 2024 from 3,119thousandin2Q2024[35]−Allowanceforcreditlossesendingbalancewas3,119 thousand in 2Q 2024[35] - Allowance for credit losses ending balance was (51.1) million in 3Q 2024, slightly improved from (51.6)millionin2Q2024[39]−Provisionforcreditlosseswas(51.6) million in 2Q 2024[39] - Provision for credit losses was (7.5) million in 3Q 2024, compared to (3.1)millionin2Q2024[39]−Reserveforunfundedcommitmentsdecreasedto(3.1) million in 2Q 2024[39] - Reserve for unfunded commitments decreased to (1.1) million in 3Q 2024 from (1.0)millionin2Q2024[40]−Non−performingassetsincreasedto(1.0) million in 2Q 2024[40] - Non-performing assets increased to 16,138 in 3Q 2024, up from 13,186in2Q2024and13,186 in 2Q 2024 and 10,809 in 4Q 2023[41] - Net charge-offs as a percent of average loans (annualized) increased to 0.93% in 3Q 2024, up from 0.60% in 2Q 2024 and 0.53% in 4Q 2023[30] - SBA guaranteed portion of non-performing loans rose to 5,954in3Q2024,upfrom5,954 in 3Q 2024, up from 3,268 in 2Q 2024 and 3,115in4Q2023[41]−Accruingloansdelinquent90daysormoredecreasedto1,714in3Q2024,downfrom1,897in2Q2024and1,714in4Q2023[41]CapitalandEquity−Bookvaluepercommonshareincreasedto3,115 in 4Q 2023[41] - Accruing loans delinquent 90 days or more decreased to 1,714 in 3Q 2024, down from 1,897 in 2Q 2024 and 1,714 in 4Q 2023[41] Capital and Equity - Book value per common share increased to 15.43 in Q3 2024, up 0.20fromQ22024,withtangiblebookvaluepershareat0.20 from Q2 2024, with tangible book value per share at 11.61[21] - Common shareholders' equity stood at 381million(9.48381 million (9.48% of total assets) in Q3 2024, with tangible common equity at 287 million (7.30% of tangible assets)[21] - After-tax unrealized losses on available-for-sale securities decreased by 6.0millionto6.0 million to 17.1 million in Q3 2024 due to lower market interest rates[21] - Total risk-based capital ratio increased to 12.66% in 3Q 2024, up from 12.45% in 2Q 2024 and 12.61% in 1Q 2024[29] - Common equity to assets ratio slightly decreased to 9.48% in 3Q 2024, compared to 9.49% in 2Q 2024 and 9.84% in 4Q 2023[30] - Tangible common equity to tangible assets ratio improved to 7.30% in 3Q 2024, up from 7.27% in 2Q 2024 and 7.53% in 4Q 2023[30] - Leverage ratio decreased to 8.06% in 3Q 2024, down from 8.25% in 2Q 2024 and 8.60% in 4Q 2023[30] - Tangible book value per common share increased to 11.61inQ32024from11.61 in Q3 2024 from 11.42 in Q3 2023[45] - Total Primis common stockholders' equity grew to 381.4millioninQ32024from381.4 million in Q3 2024 from 377.6 million in Q3 2023[45] - Tangible common equity increased to 286.9millioninQ32024from286.9 million in Q3 2024 from 281.6 million in Q3 2023[45] - Common equity to assets ratio ranges from 9.48% to 9.84%[46] - Effect of goodwill and other intangible assets ranges from (2.18)% to (2.31)%[46] - Tangible common equity to tangible assets ratio ranges from 7.30% to 7.53%[46] Asset and Liability Management - As of September 30, 2024, Primis had 4.0billionintotalassets,4.0 billion in total assets, 2.9 billion in total loans, and 3.3billionintotaldeposits[22]−Totalassetsincreasedto3.3 billion in total deposits[22] - Total assets increased to 4,024,603 thousand in 3Q 2024, up from 3,966,364thousandin2Q2024[33]−Totalliabilitiesincreasedto3,966,364 thousand in 2Q 2024[33] - Total liabilities increased to 3,627,283 thousand in 3Q 2024 from 3,571,807thousandin2Q2024[34]−Tangiblecommonequitystoodat3,571,807 thousand in 2Q 2024[34] - Tangible common equity stood at 286,908 thousand in 3Q 2024, up from 281,625thousandin2Q2024[34]−FederalHomeLoanBankadvancessurgedto281,625 thousand in 2Q 2024[34] - Federal Home Loan Bank advances surged to 165,000 thousand in 3Q 2024 from 80,000thousandin2Q2024[34]−Totalearningassetsgrewto80,000 thousand in 2Q 2024[34] - Total earning assets grew to 3,748,303 in 3Q 2024, compared to 3,669,045in2Q2024and3,669,045 in 2Q 2024 and 3,564,935 in 4Q 2023[42] - Total deposits reached 3,321,711in3Q2024,slightlydownfrom3,321,711 in 3Q 2024, slightly down from 3,324,688 in 2Q 2024 but up from 3,281,979in4Q2023[43]−Loansheldforsaleincreasedto3,281,979 in 4Q 2023[43] - Loans held for sale increased to 98,110 in 3Q 2024, up from 84,389in2Q2024and84,389 in 2Q 2024 and 48,380 in 4Q 2023[42] - Total funding costs increased to 29,089in3Q2024,upfrom29,089 in 3Q 2024, up from 27,346 in 2Q 2024 and 24,437in4Q2023[43]−Totalliabilitiesandstockholders′equityreached24,437 in 4Q 2023[43] - Total liabilities and stockholders' equity reached 3,992,275 in 3Q 2024, up from 3,912,245in2Q2024and3,912,245 in 2Q 2024 and 3,827,912 in 4Q 2023[42] - Investments slightly decreased to 2.95% from 2.97%[44] - Total Earning Assets rose to 6.06% from 5.10%[44] - Cost of Interest-Bearing Deposits rose to 3.48% from 2.84%[44] - Total Cost of Funds increased to 3.25% from 2.61%[44] Dividends and Shareholder Returns - Primis Financial Corp. declared a dividend of 0.10pershare,markingitsfifty−secondconsecutivequarterlydividend[21]BusinessDevelopments−ThesaleoftheLifePremiumFinanceDivisiontoEverBankisexpectedtoresultinapre−taxgainof0.10 per share, marking its fifty-second consecutive quarterly dividend[21] Business Developments - The sale of the Life Premium Finance Division to EverBank is expected to result in a pre-tax gain of 4.5 million in Q4 2024[3] - EverBank will acquire approximately 370millionofloansfromtheLifePremiumFinanceDivision,withPrimisBankprovidinginterimservicinguntilthefinalclosingonJanuary31,2025[4]−PrimishiredaseasonedmortgagewarehouselendingteaminearlyOctober2024,withfourkeyindividualsjoiningandanadditionalfourtofivesupportstaffexpectedinthecomingmonths[5]−PrimisMortgagepre−taxincomeroseto370 million of loans from the Life Premium Finance Division, with Primis Bank providing interim servicing until the final closing on January 31, 2025[4] - Primis hired a seasoned mortgage warehouse lending team in early October 2024, with four key individuals joining and an additional four to five support staff expected in the coming months[5] - Primis Mortgage pre-tax income rose to 1.0 million in Q3 2024, with locked loan volumes averaging 56.1millionpermonth,upfrom56.1 million per month, up from 52.0 million in Q2 2024[20] - V1BE platform users grew by 5% in Q3 2024, reaching over 2,400 users, while digital accounts totaled 17,000 with 911millionindepositsandaveragebalancesof911 million in deposits and average balances of 53 thousand[17]