Primis Financial Corp. Reports Basic and Diluted Earnings per Share from Continuing Operations of $0.19 for the First Quarter of 2022
Primis Financial Corp. (FRST) reported net income of $4.6 million for Q1 2022, a decline from $7.7 million in Q4 2021. EPS dropped to $0.19 from $0.31. The company announced plans to acquire SeaTrust Mortgage Company, with an expected close in Q2 2022. Gross loans increased by 17.6% to $2.36 billion, while total deposits remained flat at $2.69 billion. The board declared a quarterly dividend of $0.10 per share, marking its 42nd consecutive dividend. The firm continues to experience growth in core operations and digital offerings, hoping for substantial future profitability.
- Gross loans increased 17.6% to $2.36 billion.
- Quarterly dividend of $0.10 per share declared.
- Acquisition of SeaTrust Mortgage expected to enhance growth opportunities.
- Net income decreased to $4.6 million from $7.7 million quarter-over-quarter.
- EPS fell to $0.19 from $0.31 in previous quarter.
- Total deposits decreased to $2.69 billion from $2.76 billion.
Announces Signing of a Definitive Agreement to Acquire SeaTrust Mortgage Company
Declares Quarterly Cash Dividend of
MCLEAN, Va., April 28, 2022 /PRNewswire/ -- Primis Financial Corp. (NASDAQ: FRST) ("Primis" or the "Company"), and its wholly-owned subsidiary, Primis Bank (the "Bank"), today reported net income of
As discussed below, Primis today also announced the signing of a definitive agreement to acquire
Commenting on the quarter, Dennis Zember, Jr., President and CEO said "I am delighted with where we finished the quarter and even more excited about the momentum we are carrying into the rest of the year. In addition to growth in our core bank, Panacea and Life Premium Finance have substantial pipelines and a record level of engagement from referral sources. Our ability to add a wholly-owned mortgage platform into our operations for such a reasonable price provides so much opportunity to shareholders with virtually no downside. Lastly, our digital offerings are going live and will be unique for consumers and small businesses nationwide."
Highlights for the three months ended March 31, 2022
- Net income from continuing operations totaled
$4.6 million , or$0.19 per basic and diluted share, compared to$7.7 million , or$0.31 per basic and diluted share in the fourth quarter of 2021. - Total assets at the end of the first quarter of 2022 were
$3.22 billion , a decrease of3.3% compared to the first quarter of 2021. - Gross loans, excluding Paycheck Protection Program ("PPP") balances, grew at an annualized pace of
17.6% during the first quarter of 2022 compared to the fourth quarter of 2021. Gross loans, excluding PPP balances, ended the quarter at$2.36 billion , compared to$2.26 billion at December 31, 2021 and$2.06 billion at March 31, 2021. - Total deposits were
$2.69 billion at March 31, 2022, flat compared to March 31, 2021. - Non-time deposits were
$2.35 billion at March 31, 2022, an increase of4.3% compared to March 31, 2021. - Non-interest bearing demand deposits increased to
$560 million , or20.8% of total deposits compared to19.0% at the end of the same quarter in 2021. - Time deposits decreased to
$339.5 million or12.6% of total deposits at March 31, 2022 compared to$438.8 million or16.3% at the end of the first quarter in 2021. - Cost of deposits declined to
0.35% for the first quarter of 2022 compared to0.39% for the fourth quarter of 2021 and0.60% for the first quarter of 2021. - Pre-tax pre-provision earnings from continuing operations(1) and pre-tax pre-provision operating earnings from continuing operations(1) were
$6.2 million and$6.3 million , respectively, for the first quarter of 2022, compared to$8.5 million and$7.9 million , respectively, for the fourth quarter of 2021. - Provision for credit losses were
$0.1 million for the first quarter of 2022 compared to recovery of credit losses of$1.3 million for the fourth quarter of 2021. - Allowance for credit losses to total loans (excluding PPP balances) was
1.24% at March 31, 2022, compared to1.29% at December 31, 2021 and1.70% at March 31, 2021. - Book value per share was
$16.42 and tangible book value per share(1) was$12.11 at March 31, 2022, representing a decrease of$0.34 and$0.32 , respectively, from December 31, 2021 after$0.10 in dividends paid during the quarter. - Joined the USDF Consortium, a membership-based association of FDIC-insured banks, to explore the use of a bank-minted tokenized deposit (USDF™), as an alternative blockchain-powered method of moving value.
- Entered final testing of Primis' new digital bank offering.
Acquisition of SeaTrust Mortgage Company
Primis announced today a definitive agreement to acquire SeaTrust Mortgage Company from its parent company. Formed in late 2019 by an experienced management team, SeaTrust originates mortgages primarily in the Carolinas, Florida and Tennessee from eight offices. Origination volumes in 2021 were approximately
Dennis J. Zember, Jr., President and Chief Executive Officer of Primis commented, "We have been public with our desire for a wholly-owned mortgage solution at Primis and believe SeaTrust is the ideal platform for us. The platform is run very efficiently, already profitable at only
Primis anticipates closing this all-cash acquisition in the second quarter of 2022. Additionally, management expects there to be only a minimal impact to tangible book value per share at closing and expects the business to be neutral to earnings and ROA for the remainder of 2022 as earnings are reinvested in recruiting and other growth-oriented systems. Management of Primis and SeaTrust have explored several recruiting opportunities together and are confident in the ability to quickly reach a level of scale necessary for Primis.
Continued Mr. Zember, "We are excited to see the momentum from the investments we made in 2021 with earning assets growth across the organization. Panacea and Life Premium Finance started the year strong and should begin adding to profitability this year. Our core community bank continues to grow and become more profitable. Primis Mortgage will contribute in the near future and will have synergies with our other business lines. Our digital offerings are going live and will provide the base for us to build our future on. We joined the USDF Consortium in the first quarter and are already pursuing use cases for this technology. We are enthusiastic about the performance of the bank going forward."
Lines of Business
As discussed previously, the Company's efforts to develop or incubate new lines of business continue to produce early-stage results. Long–term, the Bank believes these lines of business and the outsized growth associated with them are key to delivering higher levels of earnings per share growth.
Panacea finished the first quarter of 2022 with approximately
Commenting on the momentum that Panacea is experiencing, Mr. Tyler Stafford, CEO of the division said, "The level of interest in our offerings and our value proposition continues to increase. Our pipeline of loan opportunities is well over
The Life Premium Finance Division, launched in the fourth quarter of 2021, ended the first quarter of 2022 with outstanding balances, net of deferred fees, of
Primis will soon be one of the first banks in the U.S. to offer a full service, full-featured checking account powered by its new digital platform. The account's low cost of acquisition and management allows the Bank to offer hyper-competitive terms. The account includes free overdrafts, refund to the customer of debit and credit interchange income on its cards, free ATM transactions nationwide, bill pay, peer-to-peer capabilities and delivery of almost any conceivable banking service directly to customers' doorsteps in select markets. Speaking about the progress, Mr. Zember commented "Our opportunity with this digital platform is perfectly timed. As our lending strategies in the bank and our lines of business begin to accelerate, we believe the digital bank affords us the opportunity to fund that growth profitably. Additionally, the Company is currently in late-stage discussions with several FinTech's or financially-oriented companies that currently offer single, important services to their customers but lack the full feature banking experience that Primis can offer. Our pitch to these firms and their interest levels and engagement demonstrates the opportunity with this concept, and I am determined to build substantial value for our shareholders with this idea."
Net Interest Income
Net interest income, excluding the effect of PPP fees, was
The Company's loan growth over the past several quarters has had a positive impact on both margins and net interest income as the earning asset mix improves. Loans represented
Improvements in the Company's cost of funds more than offset the small decline in loan yields. Total cost of funds in the first quarter of 2022 was
Non-interest Income
During the three months ended March 31, 2022, Primis had non-interest income of
Non-interest Expense
Non-interest expense was
Expenses associated with lines of business amounted to
The Company's efficiency ratio and operating efficiency ratio in the first quarter of 2022 was
Loan Portfolio and Asset Quality
Loans outstanding increased to
Nonperforming assets, excluding portions guaranteed by the SBA, were essentially flat at
The allowance for credit losses was
Deposits
Total deposits decreased to
Shareholders' Equity
Book value per share as of March 31, 2022 was
Additionally, the Board of Directors announced and declared a dividend of
About Primis Financial Corp.
As of March 31, 2022, Primis had
Contacts: | Address: | |||
Dennis J. Zember, Jr., President and CEO | Primis Financial Corp. | |||
Matthew A. Switzer, EVP and CFO | 6830 Old Dominion Drive | |||
Phone: (703) 893-7400 | McLean, VA 22101 |
Primis Financial Corp., NASDAQ Symbol FRST
Website: www.primisbank.com
Conference Call
The Company's management will host a conference call to discuss its first quarter results on Friday, April 29, 2022 at 10:00 a.m. (ET). A live Webcast of the conference call is available at the following website: https://app.webinar.net/NYLd0VB01OB. Participants may also call 1-888-346-2613 and ask for the Primis Financial Corp. call. A replay of the teleconference will be available through May 6, 2022 by calling 1-877-344-7529 and providing Replay Access Code 1138528.
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 from continuing operations adjusted for nonrecurring income and expenses; pre-tax pre-provision operating earnings from continuing operations; operating return on average assets from continuing operations; pre-tax pre-provision operating return on average assets from continuing operations; operating return on average equity from continuing operations; operating return on average tangible equity from continuing operations; operating efficiency ratio from continuing operations; tangible book value per share; tangible common equity; tangible common equity to tangible assets; and net interest margin excluding PPP loans 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.
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 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; statements regarding the effects of the ongoing COVID-19 pandemic and related variants on our business and financial results and conditions; 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 and Life Premium Finance Divisions, new digital bank and V1BE fulfillment service and proposed acquisition of SeaTrust; 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; changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortages and supply chain disruptions; changes in accounting principles, policies, or guidelines; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic; the ongoing impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for credit losses; 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, 2021, 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.
Primis Financial Corp. | ||||||||||||
Financial Highlights (unaudited) | ||||||||||||
(Dollars in thousands, except per share data) | For Three Months Ended: | Variance - 1Q 2022 vs. | ||||||||||
Selected Performance Ratios: | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | |||||
Return on average assets from continuing operations | (33) | bps | (50) | bps | ||||||||
Operating return on average assets from continuing operations(1) | (27) | (51) | ||||||||||
Pre-tax pre-provision operating return on average assets from continuing operations(1) | (15) | (54) | ||||||||||
Return on average equity from continuing operations | (288) | (408) | ||||||||||
Operating return on average equity from continuing operations(1) | (236) | (415) | ||||||||||
Operating return on average tangible equity from continuing operations(1) | (320) | (584) | ||||||||||
Cost of funds | (4) | (26) | ||||||||||
Net interest margin | (4) | (45) | ||||||||||
Gross loans to deposits | 4 | pts | 0 | pts | ||||||||
Efficiency ratio from continuing operations | 8 | 1,011 | ||||||||||
Operating efficiency ratio from continuing operations(1) | 6 | 1,038 | ||||||||||
Per Share Data: | ||||||||||||
Earnings per share from continuing operations - Basic | $ 0.19 | $ 0.31 | $ 0.25 | $ 0.36 | $ 0.35 | (38.71) | % | (46.18) | % | |||
Earnings per share from discontinued operations - Basic | - | - | (0.09) | 0.06 | 0.04 | - | % | (100.00) | ||||
Earnings per share - Basic | $ 0.19 | $ 0.31 | $ 0.16 | $ 0.42 | $ 0.40 | (38.71) | % | (51.94) | ||||
Earnings per share from continuing operations - Diluted | $ 0.19 | $ 0.31 | $ 0.25 | $ 0.36 | $ 0.34 | (38.71) | (44.24) | |||||
Earnings per share from discontinued operations - Diluted | - | - | (0.09) | 0.06 | 0.04 | - | (100.00) | |||||
Earnings per share - Diluted | $ 0.19 | $ 0.31 | $ 0.16 | $ 0.42 | $ 0.38 | (38.71) | % | (50.37) | ||||
Book value per share | $ 16.42 | $ 16.76 | $ 16.63 | $ 16.59 | $ 16.22 | (2.03) | 1.22 | |||||
Tangible book value per share(1) | $ 12.11 | $ 12.43 | $ 12.28 | $ 12.22 | $ 11.84 | (2.57) | 2.25 | |||||
Cash dividend per share | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | - | (0.21) | |||||
Weighted average shares outstanding - Basic | 24,503,945 | 24,476,569 | 24,474,104 | 24,450,916 | 24,349,884 | 0.11 | 0.63 | |||||
Weighted average shares outstanding - Diluted | 24,662,588 | 24,653,363 | 24,634,384 | 24,616,824 | 24,509,052 | 0.04 | 0.63 | |||||
Shares outstanding at end of period | 24,622,739 | 24,574,619 | 24,574,619 | 24,537,269 | 24,532,795 | 0.20 | % | 0.37 | % | |||
Asset Quality Ratios: | ||||||||||||
Non-performing assets as a percent of total assets, excluding SBA guarantees | 3 | bps | 6 | bps | ||||||||
Net charge-offs (recoveries) as a percent of average loans (annualized) | ( | ( | ( | (3) | (4) | |||||||
Allowance for credit losses to total loans | (2) | (23) | ||||||||||
Allowance for credit losses to total loans (excluding PPP loans) | (4) | (45) | ||||||||||
Capital Ratios: | ||||||||||||
Tangible common equity to tangible assets(1) | 31 | bps | 56 | bps | ||||||||
Leverage ratio (2) | 72 | 52 | ||||||||||
Common equity tier 1 capital ratio (2) | 90 | 35 | ||||||||||
Tier 1 risk-based capital ratio (2) | 93 | 34 | ||||||||||
Total risk-based capital ratio (2) | 89 | (7) | ||||||||||
(1) See Reconciliation of Non-GAAP financial measures. | ||||||||||||
(2) March 31, 2022 ratios are estimated and may be subject to change pending the final filing of the FR Y-9C. | ||||||||||||
Primis Financial Corp. | ||||||||||||
(Dollars in thousands) | As Of : | Variance - 1Q 2022 vs. | ||||||||||
Condensed Consolidated Balance Sheets (unaudited) | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | |||||
Assets | ||||||||||||
Cash and cash equivalents | $ 298,230 | $ 530,167 | $ 650,746 | $ 620,839 | $ 480,280 | (43.75) | % | (37.90) | % | |||
Investment securities-available for sale | 271,626 | 271,332 | 206,821 | 201,977 | 170,216 | 0.11 | 59.58 | |||||
Investment securities-held to maturity | 16,138 | 22,940 | 26,412 | 28,669 | 33,180 | (29.65) | (51.36) | |||||
Loans receivable, net of deferred fees | 2,393,669 | 2,339,986 | 2,314,584 | 2,286,355 | 2,391,529 | 2.29 | 0.09 | |||||
Allowance for credit losses | (29,379) | (29,105) | (30,386) | (31,265) | (34,893) | 0.94 | (15.80) | |||||
Net loans | 2,364,290 | 2,310,881 | 2,284,198 | 2,255,090 | 2,356,636 | 2.31 | 0.32 | |||||
Stock in Federal Reserve Bank and Federal Home Loan Bank | 11,927 | 15,521 | 15,521 | 15,521 | 15,521 | (23.16) | (23.16) | |||||
Investments in mortgage affiliate - held for sale | - | - | 10,050 | 12,949 | 14,212 | - | (100.00) | |||||
Bank premises and equipment, net | 29,872 | 30,410 | 30,686 | 30,099 | 30,076 | (1.77) | (0.68) | |||||
Operating lease right-of-use assets | 5,305 | 5,866 | 6,331 | 6,386 | 6,947 | (9.56) | (23.64) | |||||
Goodwill and other intangible assets | 106,075 | 106,416 | 106,757 | 107,098 | 107,439 | (0.32) | (1.27) | |||||
Bank-owned life insurance | 67,099 | 66,724 | 66,336 | 65,949 | 65,569 | 0.56 | 2.33 | |||||
Other real estate owned | 1,041 | 1,163 | 1,312 | 1,274 | 2,255 | (10.49) | (53.84) | |||||
Deferred tax assets, net | 12,380 | 9,571 | 13,571 | 14,442 | 14,702 | 29.35 | (15.79) | |||||
Other assets | 35,893 | 36,362 | 33,676 | 34,858 | 33,437 | (1.29) | 7.35 | |||||
Total assets | $ 3,219,876 | $ 3,407,353 | $ 3,452,417 | $ 3,395,151 | $ 3,330,470 | (5.50) | % | (3.32) | % | |||
Liabilities and stockholders' equity | ||||||||||||
Demand deposits | $ 559,682 | $ 530,282 | $ 535,706 | $ 525,244 | $ 511,611 | 5.54 | % | 9.40 | % | |||
NOW accounts | 730,235 | 849,738 | 921,667 | 912,666 | 821,746 | (14.06) | (11.14) | |||||
Money market accounts | 831,580 | 799,759 | 758,259 | 714,759 | 713,968 | 3.98 | 16.47 | |||||
Savings accounts | 225,291 | 222,862 | 216,470 | 209,441 | 202,488 | 1.09 | 11.26 | |||||
Time deposits | 339,456 | 360,575 | 374,965 | 388,954 | 438,773 | (5.86) | (22.64) | |||||
Total deposits | 2,686,244 | 2,763,216 | 2,807,067 | 2,751,064 | 2,688,586 | (2.79) | (0.09) | |||||
Securities sold under agreements to repurchase - short term | 11,231 | 9,962 | 13,348 | 12,521 | 16,445 | 12.74 | (31.71) | |||||
Federal Home Loan Bank advances | - | 100,000 | 100,000 | 100,000 | 100,000 | (100.0) | (100.00) | |||||
Subordinated debt and notes | 95,099 | 95,028 | 95,442 | 95,404 | 95,367 | 0.07 | (0.28) | |||||
Operating lease liabilities | 5,897 | 6,498 | 7,000 | 7,014 | 7,629 | (9.25) | (22.70) | |||||
Other liabilities | 17,210 | 20,768 | 20,931 | 22,208 | 24,457 | (17.13) | (29.63) | |||||
Total liabilities | 2,815,681 | 2,995,472 | 3,043,788 | 2,988,211 | 2,932,484 | (6.00) | (3.98) | |||||
Stockholders' equity | 404,195 | 411,881 | 408,629 | 406,940 | 397,986 | (1.87) | 1.56 | |||||
Total liabilities and stockholders' equity | $ 3,219,876 | $ 3,407,353 | $ 3,452,417 | $ 3,395,151 | $ 3,330,470 | (5.50) | % | (3.32) | % | |||
Tangible common equity(1) | $ 298,120 | $ 305,465 | $ 301,872 | $ 299,842 | $ 290,547 | (2.40) | % | 2.61 | % | |||
Primis Financial Corp. | ||||||||||||
(Dollars in thousands) | For Three Months Ended: | Variance - 1Q 2022 vs. | ||||||||||
Condensed Consolidated Statement of Operations (unaudited) | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | |||||
Interest and dividend income | $ 26,585 | $ 28,503 | $ 27,801 | $ 26,631 | $ 30,308 | (6.73) | % | (12.28) | % | |||
Interest expense | 3,731 | 4,262 | 4,594 | 4,831 | 5,353 | (12.46) | (30.30) | |||||
Net interest income | 22,854 | 24,241 | 23,207 | 21,800 | 24,955 | (5.72) | (8.42) | |||||
Provision for (recovery of) credit losses | 99 | (1,299) | 1,085 | (4,215) | (1,372) | (107.62) | (107.22) | |||||
Net interest income after provision for (recovery of) credit losses | 22,755 | 25,540 | 22,122 | 26,015 | 26,327 | (10.90) | (13.57) | |||||
Account maintenance and deposit service fees | 1,351 | 1,420 | 1,509 | 1,586 | 1,664 | (4.86) | (18.81) | |||||
Income from bank-owned life insurance | 375 | 535 | 387 | 379 | 386 | (29.91) | (2.85) | |||||
Gain on debt extinguishment | - | 573 | - | - | - | (100.00) | - | |||||
Recoveries on loans and securities charged-off prior to acquisition | 90 | 52 | 481 | 224 | 79 | 73.08 | 13.92 | |||||
Other | 274 | 307 | (26) | 229 | 220 | (10.75) | 24.55 | |||||
Noninterest income | 2,090 | 2,887 | 2,351 | 2,418 | 2,349 | (27.61) | (11.03) | |||||
Employee compensation and benefits | 9,625 | 9,527 | 9,032 | 8,810 | 9,372 | 1.03 | 2.70 | |||||
Occupancy and equipment expenses | 2,557 | 2,487 | 2,523 | 2,311 | 2,355 | 2.81 | 8.58 | |||||
Amortization of core deposit intangible | 341 | 342 | 341 | 341 | 341 | (0.29) | - | |||||
Virginia franchise tax expense | 813 | 733 | 732 | 759 | 675 | 10.91 | 20.44 | |||||
Data processing expense | 1,197 | 934 | 1,003 | 1,016 | 799 | 28.16 | 49.81 | |||||
Telecommunication and communication expense | 382 | 439 | 415 | 414 | 522 | (12.98) | (26.82) | |||||
Net (gain) loss on other real estate owned | (59) | 70 | - | 77 | (60) | 184.29 | (1.67) | |||||
Professional fees | 1,387 | 1,238 | 874 | 1,091 | 1,134 | 12.04 | 22.31 | |||||
Other expenses | 2,744 | 2,722 | 1,640 | 2,376 | 2,885 | 0.81 | (4.89) | |||||
Noninterest expense | 18,987 | 18,492 | 16,560 | 17,195 | 18,023 | 2.68 | 5.35 | |||||
Income from continuing operations before income taxes | 5,858 | 9,935 | 7,913 | 11,238 | 10,653 | (41.04) | (45.01) | |||||
Income tax expense | 1,265 | 2,284 | 1,702 | 2,434 | 2,301 | (44.61) | (45.02) | |||||
Income from continuing operations | 4,593 | 7,651 | 6,211 | 8,804 | 8,352 | (39.97) | (45.01) | |||||
Income (loss) from discontinued operations before income taxes | - | - | (2,899) | 1,878 | 1,315 | - | (100.00) | |||||
Income tax expense (benefit) | - | - | (627) | 407 | 284 | - | (100.00) | |||||
Income (loss) from discontinued operations | - | - | (2,272) | 1,471 | 1,031 | - | (100.00) | |||||
Net income | $ 4,593 | $ 7,651 | $ 3,939 | $ 10,275 | $ 9,383 | (39.97) | % | (51.05) | % | |||
(1) See Reconciliation of Non-GAAP financial measures. | ||||||||||||
Primis Financial Corp. | ||||||||||||
(Dollars in thousands) | As Of: | Variance - 1Q 2022 vs. | ||||||||||
Loan Portfolio Composition | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | |||||
Loans secured by real estate: | ||||||||||||
Commercial real estate - owner occupied | $ 406,285 | $ 389,109 | $ 421,940 | $ 417,489 | $ 421,666 | 4.41 | % | (3.65) | % | |||
Commercial real estate - non-owner occupied | 615,682 | 590,523 | 631,423 | 563,114 | 567,945 | 4.26 | 8.41 | |||||
Secured by farmland | 8,896 | 10,003 | 10,721 | 11,861 | 12,351 | (11.07) | (27.97) | |||||
Construction and land development | 116,365 | 121,520 | 109,763 | 109,719 | 104,661 | (4.24) | 11.18 | |||||
Residential 1-4 family | 575,946 | 548,830 | 531,556 | 516,475 | 515,518 | 4.94 | 11.72 | |||||
Multi-family residential | 152,266 | 164,071 | 153,310 | 130,221 | 136,914 | (7.20) | 11.21 | |||||
Home equity lines of credit | 72,440 | 73,877 | 75,775 | 80,262 | 85,160 | (1.95) | (14.94) | |||||
Total real estate loans | 1,947,880 | 1,897,933 | 1,934,488 | 1,829,141 | 1,844,215 | 2.63 | 5.62 | |||||
Commercial loans | 336,961 | 303,697 | 203,243 | 194,610 | 188,050 | 10.95 | 79.19 | |||||
Paycheck Protection Program loans | 31,404 | 77,319 | 140,465 | 234,315 | 335,210 | (59.38) | (90.63) | |||||
Consumer loans | 77,424 | 61,037 | 36,388 | 28,289 | 24,054 | 26.85 | 221.88 | |||||
Loans receivable, net of deferred fees | $ 2,393,669 | $ 2,339,986 | $ 2,314,584 | $ 2,286,355 | $ 2,391,529 | 2.29 | % | 0.09 | % | |||
Loans by Risk Grade: | ||||||||||||
Pass, not graded | $ - | $ - | $ - | $ - | $ - | - | % | - | % | |||
Pass Grade 1 - Highest Quality | 786 | 641 | 789 | 1,054 | 955 | 22.62 | (17.70) | |||||
Pass Grade 2 - Good Quality | 8,734 | 103,496 | 153,834 | 247,664 | 348,836 | (91.56) | (97.50) | |||||
Pass Grade 3 - Satisfactory Quality | 1,413,480 | 1,327,718 | 1,248,233 | 1,142,784 | 1,110,453 | 6.46 | 27.29 | |||||
Pass Grade 4 - Pass | 895,197 | 836,610 | 841,451 | 823,866 | 853,234 | 7.00 | 4.92 | |||||
Pass Grade 5 - Special Mention | 51,884 | 31,112 | 25,008 | 29,844 | 33,661 | 66.77 | 54.14 | |||||
Grade 6 - Substandard | 23,588 | 40,409 | 45,269 | 39,613 | 44,390 | (41.63) | (46.86) | |||||
Grade 7 - Doubtful | - | - | - | 1,530 | - | - | - | |||||
Grade 8 - Loss | - | - | - | - | - | - | - | |||||
Total loans | $ 2,393,669 | $ 2,339,986 | $ 2,314,584 | $ 2,286,355 | $ 2,391,529 | 2.29 | % | 0.09 | % | |||
(Dollars in thousands) | As Of or For Three Months Ended: | |||||||||||
Asset Quality Information | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | |||||||
Allowance for Credit Losses: | ||||||||||||
Balance at beginning of period | $ (29,105) | $ (30,386) | $ (31,265) | $ (34,893) | $ (36,345) | |||||||
(Provision for) / recovery of allowance for credit losses | (99) | 1,299 | (1,085) | 4,215 | 1,372 | |||||||
Net charge-offs | (175) | (18) | 1,964 | (587) | 80 | |||||||
Ending balance | $ (29,379) | $ (29,105) | $ (30,386) | $ (31,265) | $ (34,893) | |||||||
Reserve for Unfunded Commitments: | ||||||||||||
Balance at beginning of period | $ (977) | $ (1,129) | $ (1,599) | $ (1,450) | $ (740) | |||||||
(Expense for) / recovery of unfunded loan commitment reserve | (260) | 152 | 470 | (149) | (710) | |||||||
Total Reserve for Unfunded Commitments | $ (1,237) | $ (977) | $ (1,129) | $ (1,599) | $ (1,450) | |||||||
As Of: | Variance - 1Q 2022 vs. | |||||||||||
Non-Performing Assets: | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | |||||
Nonaccrual loans | $ 14,941 | $ 15,029 | $ 18,352 | $ 14,604 | $ 14,251 | (0.59) | % | 4.84 | % | |||
Accruing loans delinquent 90 days or more | 1,817 | 283 | - | - | - | NM | - | |||||
Total non-performing loans | 16,758 | 15,312 | 18,352 | 14,604 | 14,251 | 9.44 | 17.59 | |||||
Other real estate owned | 1,041 | 1,163 | 1,312 | 1,274 | 2,255 | (10.49) | (53.84) | |||||
Total non-performing assets | $ 17,799 | $ 16,475 | $ 19,664 | $ 15,878 | $ 16,506 | 8.04 | 7.83 | |||||
SBA guaranteed portion of non-performing loans | $ 2,651 | $ 1,388 | $ 3,361 | $ 1,380 | $ 2,960 | 90.99 | (10.44) | |||||
Troubled debt restructuring | $ 3,103 | $ 3,401 | $ 3,710 | $ 2,766 | $ 2,804 | (8.76) | 10.7 | |||||
Loans deferred under COVID-19 modifications | $ - | $ - | $ 6,985 | $ 25,977 | $ 112,834 | - | % | (100.00) | % | |||
The company defines "NM" as not meaningful for increases or decreases greater than 300 percent. | ||||||||||||
Primis Financial Corp. | ||||||||||||
(Dollars in thousands) | For Three Months Ended: | Variance - 2Q 2021 vs. | ||||||||||
Average Balance Sheet | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | |||||
Assets | ||||||||||||
Loans, net of deferred fees | $ 2,360,782 | $ 2,317,260 | $ 2,291,945 | $ 2,327,162 | $ 2,436,713 | 1.88 | % | (3.12) | % | |||
Investment securities | 302,431 | 258,265 | 229,906 | 215,713 | 193,364 | 17.10 | 56.41 | |||||
Other earning assets | 466,952 | 632,841 | 689,084 | 577,939 | 339,480 | (26.21) | 37.55 | |||||
Total earning assets | 3,130,165 | 3,208,366 | 3,210,935 | 3,120,814 | 2,969,557 | (2.44) | 5.41 | |||||
Investment in STM - Held for sale | — | 9,941 | 12,621 | 12,728 | 12,629 | |||||||
Other assets | 226,320 | 229,718 | 230,116 | 226,836 | 228,108 | (1.48) | (0.78) | |||||
Total assets | $ 3,356,485 | $ 3,448,025 | $ 3,453,672 | $ 3,360,378 | $ 3,210,294 | (2.65) | % | 4.55 | % | |||
Liabilities and stockholders' equity | ||||||||||||
Demand deposits | $ 545,530 | $ 547,504 | $ 547,500 | $ 516,877 | $ 477,812 | (0.36) | % | 14.17 | % | |||
Interest-bearing liabilities: | ||||||||||||
NOW and other demand accounts | 817,430 | 878,652 | 920,203 | 867,499 | 773,768 | (6.97) | 5.64 | |||||
Money market accounts | 809,460 | 784,942 | 744,280 | 719,925 | 653,443 | 3.12 | 23.88 | |||||
Savings accounts | 224,716 | 219,823 | 213,859 | 206,507 | 192,252 | 2.23 | 16.89 | |||||
Time deposits | 350,368 | 368,603 | 380,233 | 409,247 | 465,945 | (4.95) | (24.80) | |||||
Total Deposits | 2,747,504 | 2,799,524 | 2,806,075 | 2,720,055 | 2,563,219 | (1.86) | 7.19 | |||||
Borrowings | 171,293 | 209,215 | 208,689 | 210,505 | 218,427 | (18.13) | (21.58) | |||||
Total Funding | 2,918,797 | 3,008,739 | 3,014,764 | 2,930,560 | 2,781,646 | (2.99) | 4.93 | |||||
Other Liabilities | 23,057 | 27,407 | 28,699 | 29,013 | 33,510 | (15.87) | (31.19) | |||||
Stockholders' equity | 414,631 | 411,879 | 410,209 | 400,805 | 395,138 | 0.67 | 4.93 | |||||
Total liabilities and stockholders' equity | $ 3,356,485 | $ 3,448,025 | $ 3,453,672 | $ 3,360,378 | $ 3,210,294 | (2.65) | % | 4.55 | % | |||
Memo: Average PPP loans | $ 51,491 | $ 102,078 | $ 191,504 | $ 294,019 | $ 333,145 | (49.56) | % | (84.54) | % | |||
Net Interest Income | ||||||||||||
Loans | $ 24,749 | $ 26,701 | $ 26,181 | $ 25,182 | $ 28,957 | (7.31) | % | (14.53) | % | |||
Investment securities | 1,430 | 1,242 | 1,083 | 1,073 | 1,042 | 15.14 | 37.24 | |||||
Other earning assets | 406 | 560 | 537 | 376 | 309 | (27.50) | 31.39 | |||||
Total Earning Assets | 26,585 | 28,503 | 27,801 | 26,631 | 30,308 | (6.73) | (12.28) | |||||
Non-interest bearing DDA | - | - | - | - | - | - | - | |||||
NOW and other interest-bearing demand accounts | 666 | 832 | 1,062 | 1,022 | 1,093 | (19.95) | (39.07) | |||||
Money market accounts | 859 | 952 | 1,056 | 1,153 | 1,085 | (9.77) | (20.83) | |||||
Savings accounts | 149 | 154 | 165 | 157 | 142 | (3.25) | 4.93 | |||||
Time deposits | 700 | 809 | 877 | 1,057 | 1,496 | (13.47) | (53.21) | |||||
Total Deposit Costs | 2,374 | 2,747 | 3,160 | 3,389 | 3,816 | (13.58) | (37.79) | |||||
Borrowings | 1,357 | 1,515 | 1,434 | 1,442 | 1,537 | (10.43) | (11.71) | |||||
Total Funding Costs | 3,731 | 4,262 | 4,594 | 4,831 | 5,353 | (12.46) | (30.30) | |||||
Net Interest Income | $ 22,854 | $ 24,241 | $ 23,207 | $ 21,800 | $ 24,955 | (5.72) | % | (8.42) | % | |||
Memo: SBA PPP loan interest and fee income | $ 435 | $ 2,503 | $ 3,146 | $ 2,559 | $ 5,778 | (82.62) | % | (92.47) | % | |||
Memo: SBA PPP loan funding costs | $ 44 | $ 90 | $ 169 | $ 257 | $ 288 | (51.11) | % | (84.72) | % | |||
Net Interest Margin | ||||||||||||
Loans | (32) | bps | (57) | bps | ||||||||
Investments | 1 | (27) | ||||||||||
Other Earning Assets | - | (2) | ||||||||||
Total Earning Assets | (8) | (70) | ||||||||||
NOW | (5) | (24) | ||||||||||
MMDA | (5) | (24) | ||||||||||
Savings | (1) | (3) | ||||||||||
CDs | (6) | (49) | ||||||||||
Cost of Interest Bearing Deposits | (4) | (30) | ||||||||||
Cost of Deposits | (4) | (25) | ||||||||||
Other Funding | 35 | 37 | ||||||||||
Total Cost of Funds | (4) | (26) | ||||||||||
Net Interest Margin | (4) | (45) | ||||||||||
Net Interest Spread | (15) | (55) | ||||||||||
Memo: Excluding SBA PPP loans | ||||||||||||
Loans | (6) | bps | (20) | bps | ||||||||
Total Earning Assets | 12 | (33) | ||||||||||
Net Interest Margin* | 17 | (4) | ||||||||||
*Net interest margin excluding the effect of SBA PPP loans assumes a funding cost of 35bps on average PPP balances in all applicable periods | ||||||||||||
Primis Financial Corp. | ||||||||||||
(Dollars in thousands, except per share data) | For Three Months Ended: | For Three Months Ended: | ||||||||||
Reconciliation of Non-GAAP items: | 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 1Q 2022 | 1Q 2021 | |||||
Net income from continuing operations | $ 4,593 | $ 7,651 | $ 6,211 | $ 8,804 | $ 8,352 | $ 4,593 | $ 8,352 | |||||
Non-GAAP adjustments to Net Income from continuing operations: | ||||||||||||
Management Restructure / Recruiting | - | - | - | - | 200 | - | 200 | |||||
Merger expenses | 115 | - | - | - | - | 115 | - | |||||
(Gain) on debt extinguishment | - | (573) | - | - | - | - | - | |||||
Income tax effect | (25) | 124 | - | - | (43) | (25) | (43) | |||||
Net Income from continuing operations adjusted for nonrecurring income and expenses | $ 4,683 | $ 7,202 | $ 6,211 | $ 8,804 | $ 8,509 | $ 4,683 | $ 8,509 | |||||
Net income from continuing operations | $ 4,593 | $ 7,651 | $ 6,211 | $ 8,804 | $ 8,352 | $ 4,593 | $ 8,352 | |||||
Income tax expense | 1,265 | 2,284 | 1,702 | 2,434 | 2,301 | 1,265 | 2,301 | |||||
Provision for credit losses (incl. unfunded commitment expense) | 359 | (1,451) | 615 | (4,066) | (661) | 359 | (661) | |||||
Pre-tax pre-provision earnings from continuing operations | $ 6,217 | $ 8,484 | $ 8,528 | $ 7,172 | $ 9,992 | $ 6,217 | $ 9,992 | |||||
Effect of adjustment for nonrecurring income and expenses | 115 | (573) | - | - | 200 | 115 | 200 | |||||
Pre-tax pre-provision operating earnings from continuing operations | $ 6,332 | $ 7,911 | $ 8,528 | $ 7,172 | $ 10,192 | $ 6,332 | $ 10,192 | |||||
Return on average assets from continuing operations | ||||||||||||
Effect of adjustment for nonrecurring income and expenses | ( | |||||||||||
Operating return on average assets from continuing operations | ||||||||||||
Return on average assets from continuing operations | ||||||||||||
Effect of tax expense | ||||||||||||
Effect of provision for credit losses | ( | ( | ( | ( | ||||||||
Pre-tax pre-provision return on average assets from continuing operations | ||||||||||||
Effect of adjustment for nonrecurring income and expenses | ( | |||||||||||
Pre-tax pre-provision operating return on average assets from continuing operations | ||||||||||||
Return on average equity from continuing operations | ||||||||||||
Effect of adjustment for nonrecurring income and expenses | ( | |||||||||||
Operating return on average equity from continuing operations | ||||||||||||
Effect of goodwill and other intangible assets | ||||||||||||
Operating return on average tangible equity from continuing operations | ||||||||||||
Efficiency ratio from continuing operations | ||||||||||||
Effect of adjustment for nonrecurring income and expenses | ( | ( | ( | ( | ||||||||
Operating efficiency ratio from continuing operations | ||||||||||||
Earnings per share from continuing operations - Basic | $ 0.19 | $ 0.31 | $ 0.25 | $ 0.36 | $ 0.35 | $ 0.19 | $ 0.35 | |||||
Effect of adjustment for nonrecurring income and expenses | 0.00 | (0.02) | 0.00 | 0.00 | (0.00) | 0.00 | (0.00) | |||||
Operating earnings per share from continuing operations - Basic | $ 0.19 | $ 0.29 | $ 0.25 | $ 0.36 | $ 0.35 | $ 0.19 | $ 0.35 | |||||
Earnings per share from continuing operations - Diluted | $ 0.19 | $ 0.31 | $ 0.25 | $ 0.36 | $ 0.34 | $ 0.19 | $ 0.34 | |||||
Effect of adjustment for nonrecurring income and expenses | (0.00) | (0.02) | 0.00 | 0.00 | 0.01 | (0.00) | 0.01 | |||||
Operating earnings per share from continuing operations - Diluted | $ 0.19 | $ 0.29 | $ 0.25 | $ 0.36 | $ 0.35 | $ 0.19 | $ 0.35 | |||||
Book value per share | $ 16.42 | $ 16.76 | $ 16.63 | $ 16.59 | $ 16.22 | $ 16.42 | $ 16.22 | |||||
Effect of goodwill and other intangible assets | (4.31) | (4.34) | (4.35) | (4.37) | (4.38) | (4.31) | (4.38) | |||||
Tangible book value per share | $ 12.11 | $ 12.43 | $ 12.28 | $ 12.22 | $ 11.84 | $ 12.11 | $ 11.84 | |||||
Stockholders' equity | $ 404,195 | $ 411,881 | $ 408,629 | $ 406,940 | $ 397,986 | $ 404,195 | $ 397,986 | |||||
Less goodwill and other intangible assets | (106,075) | (106,416) | (106,757) | (107,098) | (107,439) | (106,075) | (107,439) | |||||
Tangible common equity | $ 298,120 | $ 305,465 | $ 301,872 | $ 299,842 | $ 290,547 | $ 298,120 | $ 290,547 | |||||
Equity to assets | ||||||||||||
Effect of goodwill and other intangible assets | ( | ( | ( | ( | ( | ( | ( | |||||
Tangible common equity to tangible assets | ||||||||||||
Net interest margin | ||||||||||||
Effect of adjustment for PPP associated balances* | ( | ( | ( | ( | ( | ( | ( | |||||
Net interest margin excluding PPP | ||||||||||||
*Net interest margin excluding the effect of PPP loans assumes a funding cost of 35bps on average PPP balances in all applicable periods | ||||||||||||
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SOURCE Primis Financial Corp.
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