EX-99.1 2 frst-ex99_1.htm EX-99.1

Exhibit 99.1

Primis Financial Corp. Reports Basic and Diluted Earnings per Share from Continuing Operations for the Fourth Quarter of 2022

Declares Quarterly Cash Dividend of $0.10 Per Share

MCLEAN, Va., Jan. 26, 2023 /PRNewswire/ -- Primis Financial Corp. (NASDAQ: FRST) ("Primis" or the "Company"), and its wholly-owned subsidiary, Primis Bank (the "Bank"), today reported net income from continuing operations of $3.1 million for the quarter ended December 31, 2022, compared to $5.1 million for the quarter ended September 30, 2022 and $7.7 million for the quarter ended December 31, 2021. Earnings per share ("EPS") from continuing operations for the three months ended December 31, 2022 were $0.13 on a basic and $0.12 on a diluted basis, compared to $0.21 on a basic and $0.20 on a diluted basis for the three months ended September 30, 2022 and $0.31 on both a basic and diluted basis for the three months ended December 31, 2021.

Dennis J. Zember, Jr., President and CEO commented about the year's results, saying, "We have exhausted ourselves over the last three years, and intensely in 2022, building growth and profitability engines that will deliver long-term results for shareholders. We have restored regulatory relationships, built two national lines of business focused on top quality borrowers and assets, restructured the community bank, diversified our revenue sources, rationalized our branch footprint and restored manageable levels of talent throughout the bank. I am excited and determined that these investments will separate us from our peers on operating ratios and earnings per share in 2023 and beyond."

Net income from continuing operations for the twelve months ended December 31, 2022 was $17.7 million, compared to $31.0 million for the twelve months ended December 31, 2021. EPS from continuing operations for the twelve months ended December 31, 2022 were $0.72 on a basic and diluted basis, compared to $1.28 on a basic and $1.26 on a diluted basis for the twelve months ended December 31, 2021.

Financial Highlights for the Period Ended December 31, 2022

  • Return on average assets from continuing operations of 0.36% for the three months ended December 31, 2022 versus 0.61% for the three months ended September 30, 2022 and 0.88% for the three months ended December 31, 2021.  Operating return on average assets from continuing operations(1) of 0.09%, 0.64% and 0.83% for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
  • Pre-tax pre-provision return on average assets from continuing operations(1) was 1.33% for the three months ended December 31, 2022, versus 1.16% for the three months ended September 30, 2022 and 0.98% for the three months ended December 31, 2021. 
  • Pre-tax pre-provision operating return on average assets from continuing operations(1) was 0.78% for the three months ended December 31, 2022, versus 1.05% for the three months ended September 30, 2022 and 0.91% for the three months ended December 31, 2021. Excluding losses related to mortgage banking, this ratio would have been 1.10% for the fourth quarter of 2022 and 1.15% for the third quarter of 2022. 
  • Loans held for investment grew at a rate of 26.0% for 2022, or 30.1%, net of a decline in Paycheck Protection Program ("PPP") loan balances.  Loans held for investment grew at an annualized rate of 31.5% in the fourth quarter compared to the linked-quarter, net of a decline in PPP balances.
  • Total deposits grew an annualized 2.1% from the linked-quarter to $2.72 billion at December 31, 2022. 
  • Non-interest bearing checking deposits were $582.6 million, representing 21.4% of total deposits at December 31, 2022, compared to 25.4% at September 30, 2022 and 19.2% at December 31, 2021. 
  • Net interest margin of 3.67% in the fourth quarter of 2022 was up substantially from 3.00% in the same period last year and up 10 basis points from 3.57% in the third quarter of 2022. Core net interest margin(1), which excludes the effects of PPP loans and revenue due to a third-party loan servicer (as described below), was 3.51% in the fourth quarter of 2022, down slightly from 3.58% in the third quarter of 2022 and up substantially from 2.79% in the fourth quarter of 2021.
  • Allowance for credit losses to total loans was 1.17% at December 31, 2022, compared to 1.17% at September 30, 2022 and 1.24% at December 31, 2021.  Allowance for credit losses to total loans (excluding PPP balances and loans held for sale) was 1.17% at December 31, 2022, compared to 1.17% at September 30, 2022 and 1.29% at December 31, 2021. 
  • Equity to assets was 11.04% at December 31, 2022.  Tangible common equity to tangible assets of 8.27% is 68 basis points higher than peer(2) median at December 31, 2022.

Operating Performance

Speaking about the items in the Company's quarterly performance, Mr. Zember said, "Our results in the fourth quarter were noisy, as we worked to finish any investing or restructuring that could have negatively affected 2023. When I normalize the quarter for several material factors, I believe our core profitability illustrates the run-rate of our earnings power going into 2023. Without the costs and one-time revenue boost, I believe we had our best quarter, buoyed by a strong net interest margin. Additionally, our results in 2022 included substantial provisioning for loan growth that will moderate in 2023 alongside two divisions (Primis Mortgage and Panacea) that will unquestionably produce meaningful boosts to our ratios in 2023 compared to their build-out style performance in 2022."

Reported Pre-Tax Pre-Provision Earnings:


$11,511

Plus: Mortgage pre-tax loss related to production buildout:


$2,743

Plus: Severance and restructuring costs:


$1,175

Plus: OREO Loss


$131

Less: Noninterest income related to third-party credit enhanced portfolio


($1,822)

Less: One time gain on sale of investment


($4,144)

Management's Pre-tax Pre-Provision Run-Rate Earnings


$9,594

Net Interest Income

Net interest income increased to $29.6 million for the three months ended December 31, 2022 from $27.5 million for the three months ended September 30, 2022 and $24.2 million for the three months ended December 31, 2021. Included in fourth quarter net interest income is excess net revenue of $1.37 million attributable to a third-party serviced loan portfolio that is offset by the same amount recorded in noninterest expense. Excluding this revenue, net interest income increased to $28.2 million for the three months ended December 31, 2022 from $27.4 million for the three months ended September 30, 2022.

The Company's reported net interest margin for the fourth quarter of 2022 was 3.67%, compared to 3.57% in the third quarter of 2022. Core net interest margin, excluding the effects of PPP balances and the third-party net revenue described above, was 3.51% for the fourth quarter versus 3.58% in the third quarter of 2022. Yield on loans held for investment for the fourth quarter of 2022 was 5.04%, or 4.86% excluding the adjustments above, compared to 4.51% in the third quarter of 2022. Cost of deposits and cost of funds in the fourth quarter of 2022 were 0.78% and 1.19%, respectively, versus 0.48% and 0.71%, respectively, in the third quarter of 2022.

Noninterest Income

During the three months ended December 31, 2022, Primis had noninterest income of $11.0 million, compared to $5.6 million for the three months ended September 30, 2022, with a large driver of the increase due to a $4.1 million gain on the Company's investment in Infinex Financial Services which sold in the fourth quarter. Noninterest income includes gains of $1.8 million and $1.2 million for the fourth quarter and third quarter, respectively, for recovery of credit losses due to loan portfolio credit enhancement provided by a third party. Excluding these gains and the Infinex sale, noninterest income increased to $5.0 million in the fourth quarter of 2022 from $4.4 million in the third quarter of 2022.

Revenue due to mortgage activity was essentially flat at $2.3 million in the fourth quarter of 2022 versus $2.2 million in the linked quarter. The Company closed $86 million in loans in the quarter versus $63 million in the third quarter, or a 36% increase, in what is a seasonally slow quarter for the industry.

Noninterest Expense

Noninterest expense was $29.1 million for the fourth quarter of 2022, compared to $23.8 million for the third quarter of 2022. As noted in the net interest income discussion above, noninterest expense for the fourth quarter of 2022 included $1.37 million of servicing and other expenses for a third-party managed loan portfolio. Noninterest expense adjusted for these expenses, branch consolidation costs, other restructuring costs and unfunded commitment reserve impacts was $26.5 million for the fourth quarter of 2022 versus $23.1 million for the third quarter of 2022. A significant driver of the increased noninterest expense was an increase of $2.2 million in expenses related to Primis Mortgage to $5.4 million in the fourth quarter of 2022 versus $3.2 million in the third quarter of 2022. As noted last quarter, Primis Mortgage hired substantial production teams late in the third quarter of 2022, the full effects of which were felt in the fourth quarter. Certain members of these teams also had elevated salary draws for a limited period of time while pipelines were built, and which have now expired, totaling $0.9 million in the fourth quarter. Non-interest expense related to mortgage should more closely align with revenue generation going forward. Excluding mortgage, nonrecurring expenses and the third party expenses described above, noninterest expense for the fourth quarter of 2022 was $21.2 million versus $20.3 million linked-quarter.

The Company's efficiency ratio from continuing operations was 71.7% in the fourth quarter of 2022 versus 71.9% in the third quarter of 2022. The operating efficiency ratio from continuing operations(1) in the fourth quarter of 2022 was 79.9% compared to 73.6% in the third quarter of 2022. As noted above, the efficiency ratio was heavily impacted by Primis Mortgage in the fourth quarter. Excluding mortgage, the operating efficiency ratio was 69.2% for the fourth quarter of 2022 versus 69.0% for the third quarter of 2022.

Loan Portfolio

Loans held for investment increased to $2.95 billion at December 31, 2022, compared to $2.74 billion at September 30, 2022. Loans held for investment grew at an annualized rate of 26.0% for the twelve months of 2022 or 30.1%, net of a decline in PPP balances, and a substantially higher growth rate than management's expectations at the beginning of 2022. Loan growth was particularly strong in the Panacea and Life Premium Finance divisions in the fourth quarter, as discussed below.

Asset Quality

Asset quality metrics for the fourth quarter were negatively affected by one nonaccrual relationship discussed last quarter. As previously disclosed, this relationship is primarily secured by multiple assisted living facilities and a smaller tract of land. Management has a receiver appointed by the court ahead of an anticipated foreclosure and aggressively valued the properties for that sale. Provisions associated with this single borrower in the quarter were approximately $5.0 million.

Commented Mr. Zember, "Because our asset quality ratios are so materially affected by this one relationship, we valued the collateral very conservatively and are moving with haste to dispose of the property. Outside of this relationship, our total NPAs were $15.6 million at the end of the year including $8.0 million in a single family loan that is current with a less than 50% loan to value. While I am aggravated with the hassle of these assets and the associated charge-offs, I feel confident about our credit quality and currently do not see any weaknesses or trends that I believe will affect losses in 2023."

The Company recorded a provision for loan losses of $7.9 million for the fourth quarter of 2022 versus $2.9 million for the third quarter of 2022. Of this provision, $1.8 million was due to charge-offs and reserve build for the loan portfolio with a third-party credit enhancement described previously. This portion of the provision is fully offset by a gain recorded in noninterest income and has no effect on net income. Excluding this provision amount and the amounts related to the impairments described above, and net of recoveries experienced in the quarter, the allowance for credit losses would have increased $2.6 million in the fourth quarter. Of this amount, approximately $1.6 million was due to loan growth in the fourth quarter with the remainder due to increased loss rates from weakened economic forecasts. As a percentage of loans, excluding PPP balances, the allowance for credit losses was 1.17% at the end of the third and fourth quarters of 2022.

Net charge-offs were $5.3 million for the fourth quarter of 2022, up from $1.1 million in the third quarter of 2022. Excluding the losses tied to the impaired relationship described above and $1.5 million of charge-offs that are covered by a third-party, the fourth quarter would have experienced $1.3 million of net recoveries.

Nonperforming assets, excluding portions guaranteed by the SBA, were $34.9 million at December 31, 2022 compared to $37.2 million at September 30, 2022, while loans rated substandard or doubtful decreased to $41.0 million in the fourth quarter of 2022 from $47.3 million in the third quarter of 2022. Other real estate owned declined to zero from $1.0 million linked-quarter.

Deposits

Total deposits increased to $2.72 billion at December 31, 2022 from $2.71 billion at September 30, 2022 and decreased compared to $2.76 billion at December 31, 2021. Non-interest bearing demand deposits now represent 21.4% of total deposits and time deposits represent only 17.1% of total deposits at December 31, 2022. Non-interest bearing balances decreased 15.3% compared to the linked-quarter to $582.6 million. The Company has a single large depositor whose balance declined approximately $30 million in the fourth quarter of the year but is expected to fund back fully during the first and second quarters of 2023. Time deposits increased 28.1% compared to the linked-quarter to $465.1 million as the Bank extended maturities in the face of rising rates with approximately $100 million in CDs of varying maturities and rates. While newly launched, the Bank's new digital banking offering is beginning to see balance growth with $29.7 million of deposits on the new platform at year-end and almost $40 million at the time of this press release.

Lines of Business

The table below highlights revenue and expenses directly attributable to the Company's various business lines. Net interest income in the table below also includes an assumed cost of funds given to each business line for illustrative purposes, with offsetting benefit to net interest income included in the Bank column. The Bank column includes all activities not captured in the business lines, including parent company activities.

(Dollars in thousands)

Bank


Panacea


LPF


Mortgage















Consolidated Statement of Operations (unaudited)

Q4 '22

Q3 '22

Chg

Q4 '22

Q3 '22

Chg

Q4 '22

Q3 '22

Chg

Q4 '22

Q3 '22

Chg

Net Interest Income *

$        25,482

$        25,284

0.8 %

$          1,840

$          1,465

25.6 %

$             659

$             530

24.4 %

$             226

$             171

32.3 %

Noninterest Income

2,750

2,195

25.3 %

3

2

86.2 %

5

5

(9.4 %)

2,264

2,197

3.1 %

Operating Noninterest Expense (excl. res. for unfunded)

20,005

18,655

7.2 %

1,093

1,242

(12.0 %)

91

70

30.8 %

5,357

3,175

68.8 %

Pre-Tax Pre-Provision Net Income(1)

8,227

8,824

(6.8 %)

750

225

234.0 %

573

466

23.1 %

(2,867)

(806)

N/A














Gross Loans (inc. HFS)

$    2,506,632

$    2,403,460

4.3 %

$      248,402

$      201,887

23.0 %

$      193,803

$      129,031

50.2 %

$        27,626

$        16,096

71.6 %

Total Deposits

2,691,415

2,687,747

0.1 %

22,912

13,595

68.5 %

8,049

6,977

15.4 %

-

-

0.0 %














*  Net interest income assumes business line funding requirements are provided by the Company at its cost of funds plus 100 basis points.  






   Net interest income, noninterest income and noninterest expense excludes $1.4 million, $1.8 million and $1.4 million, respectively, related to credit enhanced portfolio managed by a third party.


Panacea continues to experience substantial growth as a result of its nationally-recognized brand. The division has banking relationships with over 3,000 doctor households across all 50 states. Panacea finished the fourth quarter of 2022 with approximately $248.4 million in outstanding loans, an increase of $46.5 million, or 23.0%, from September 30, 2022. At the end of the fourth quarter, Panacea's loan portfolio was 55% commercial, 24% consumer and 21% student loan refinance. As highlighted above, Panacea increased its profitability in the fourth quarter of 2022 on a funded basis by 234% from third quarter levels and expects significant continued improvements throughout 2023.

The Company's strategy with Panacea centers heavily on making it a very effective deposit player with its target customers, which began to bear fruit in the fourth quarter. Panacea-related deposits increased to $22.9 million at December 31, 2022, up 69% from September 30, 2022 and a substantially higher rate of growth than loan growth for the quarter. Lastly, Panacea is in the early stages of leveraging the Company's mortgage capabilities with Primis Mortgage to market residential mortgage products to its nationwide customer base.

The Life Premium Finance ("LPF") division, launched in late 2021, ended the fourth quarter of 2022 with outstanding balances, net of deferred fees, of $193.8 million, compared to $129.0 million at the end of the third quarter of 2022. The LPF division is already showing a healthy level of profitability (including assumed cost of funds) with a loan portfolio that is predominantly variable rate based (one year renewals) and cash secured.

As previously discussed, the Company took advantage of market disruption to expand Primis Mortgage with high quality producers in order to build production capacity for 2023. As a result, Primis Mortgage reduced pre-tax net income by $2.7 million in the fourth quarter. Higher expenses related to these team acquisitions ended at the end of the fourth quarter. The Company expects Primis Mortgage to be break-even in the first quarter of 2023 and to contribute $4 to $5 million to net income and 10 to 15 basis points to return on assets in 2023.

Shareholders' Equity

Book value per share as of December 31, 2022 was $15.98, an increase of $0.09 from September 30, 2022. Tangible book value per share(1) at the end of the fourth quarter of 2022 was $11.61, an increase of $0.07 from September 30, 2022. Shareholders' equity was $394.4 million, or 11.04% of total assets, at December 31, 2022. Tangible common equity(1) at December 31, 2022 was $286.5 million, or 8.27% of tangible assets(1). Unrealized losses on the Company's available-for-sale securities portfolio declined by $1.6 million to $25.9 million due to marginal increases in market interest rates during the quarter. The Company has the wherewithal to hold these securities until maturity or recovery of the value and does not anticipate realizing any losses on the investments.

Additionally, the Board of Directors announced and declared a dividend of $0.10 per share payable on February 24, 2023 to shareholders of record on February 10, 2023. This is Primis' forty-fifth consecutive quarterly dividend.

About Primis Financial Corp.

As of December 31, 2022, Primis had $3.57 billion in total assets, $2.95 billion in total loans and $2.72 billion in total deposits. Primis Bank provides a range of financial services to individuals and small- and medium-sized businesses through thirty-two 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

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 fourth quarter results on Friday, January 27, 2022 at 10:00 a.m. (ET). A live Webcast of the conference call is available at the following website: https://events.q4inc.com/attendee/236726104. Participants may also call 1-888-330-3573 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 4440924.

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; operating earnings per share from continuing operations – basic; operating earnings per share from continuing operations – 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.

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; 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 banking platform, V1BE fulfillment service and Primis Mortgage Company; 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.

(1)

Non-GAAP financial measure.  Please see "Reconciliation of Non-GAAP Items"in the financial tables for more information and for a reconciliation to GAAP.

(2)

Per S&P Global.  Includes publicly-traded banks with assets between $2 billion and $10 billion with reported ratios as of December 31, 2022.

Primis Financial Corp.   

















Financial Highlights (unaudited)

















(Dollars in thousands, except per share data)

For Three Months Ended:


Variance - 4Q 2022 vs.



For Twelve Months Ended:


Variance


Selected Performance Ratios:

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


3Q 2022


4Q 2021



4Q 2022

4Q 2021


YTD


Return on average assets from continuing operations

0.36 %

0.61 %

0.63 %

0.55 %

0.88 %


(25)

bps

(53)

bps


0.53 %

0.92 %


(39)

bps

Operating return on average assets from continuing operations(1)

0.09 %

0.64 %

0.76 %

0.57 %

0.83 %


(55)


(74)



0.51 %

0.92 %


(41)


Pre-tax pre-provision return on average assets from continuing operations(1)

1.33 %

1.16 %

0.83 %

0.75 %

0.98 %


17


35



0.68 %

1.02 %


(34)


Pre-tax pre-provision operating return on average assets from continuing operations(1)

0.78 %

1.05 %

1.00 %

0.77 %

0.91 %


(28)


(14)



0.55 %

1.01 %


(46)


Return on average equity from continuing operations

3.07 %

4.98 %

4.92 %

4.49 %

7.37 %


(191)


(430)



4.37 %

7.67 %


(330)


Operating return on average equity from continuing operations(1)

0.75 %

5.22 %

5.93 %

4.58 %

6.94 %


(447)


(618)



4.13 %

7.59 %


(346)


Operating return on average tangible equity from continuing operations(1)

1.03 %

7.14 %

8.08 %

6.16 %

9.36 %


(611)


(832)



5.62 %

10.33 %


(471)


Cost of funds


1.19 %

0.71 %

0.53 %

0.52 %

0.56 %


48


63



0.75 %

0.65 %


10


Net interest margin

3.67 %

3.57 %

3.33 %

2.96 %

3.00 %


10


67



3.39 %

3.01 %


38


Core net interest margin(1)

3.51 %

3.58 %

3.35 %

2.96 %

2.79 %


(7)


72



3.35 %

2.79 %


56


Gross loans to deposits

108.32 %

101.06 %

97.99 %

89.11 %

84.68 %


7

pts

24

pts


108.32 %

84.68 %


24

pts

Efficiency ratio from continuing operations

71.71 %

71.85 %

75.01 %

76.11 %

68.16 %


(0)


355



73.34 %

67.43 %


590


Operating efficiency ratio from continuing operations(1)

79.89 %

73.64 %

70.23 %

75.65 %

69.63 %


6


1,025



75.05 %

67.61 %


743





















Per Share Data:

















Earnings per share from continuing operations - Basic

$            0.13

$            0.21

$            0.20

$            0.19

$            0.31


(38.10)

%

(58.06)

%


$          0.72

$          1.27


(43.31)

%

Earnings per share from discontinued operations - Basic 

-

-

-

-

-


-


-



$             -

$          0.01


(100.00)


Earnings per share - Basic

$            0.13

$            0.21

$            0.20

$            0.19

$            0.31


(38.10)


(58.06)



$          0.72

$          1.28


(43.75)


Operating earnings per share from continuing operations - Basic(1)

$            0.03

$            0.22

$            0.25

$            0.19

$            0.29


(85.71)


(89.54)



$          0.68

$          1.26


(45.71)


Earnings per share from continuing operations - Diluted

$            0.12

$            0.20

$            0.20

$            0.19

$            0.31


(40.00)


(61.29)



$          0.72

$          1.26


(42.86)


Earnings per share from discontinued operations - Diluted 

-

-

-

-

-


-


-



-

0.01


(100.00)


Earnings per share - Diluted

$            0.12

$            0.20

$            0.20

$            0.19

$            0.31


(40.00)


(61.29)



$          0.72

$          1.27


(43.31)


Operating earnings per share from continuing operations - Diluted(1)

$            0.03

$            0.21

$            0.24

$            0.19

$            0.29


(85.70)


(89.50)



$          0.68

$          1.25


(45.59)


Book value per share

$           15.98

$           15.89

$           16.17

$           16.42

$           16.76


0.57


(4.65)



$        15.98

$        16.76


(4.65)


Tangible book value per share(1)

$           11.61

$           11.54

$           11.77

$           12.11

$           12.43


0.61


(6.60)



$        11.61

$        12.43


(6.60)


Cash dividend per share

$            0.10

$            0.10

$            0.10

$            0.10

$            0.10


-


-



$          0.40

$          0.40


-


Weighted average shares outstanding - Basic

24,601,108

24,576,887

24,562,753

24,503,945

24,476,569


0.10


0.51



24,561,483

24,438,309


0.50


Weighted average shares outstanding - Diluted

24,685,663

24,688,422

24,681,425

24,662,588

24,653,363


(0.01)


0.13



24,668,838

24,600,555


0.28


Shares outstanding at end of period

24,680,097

24,650,239

24,650,239

24,622,739

24,574,619


0.12

%

0.43

%


24,680,097

24,574,619


0.43

%




















Asset Quality Ratios:

















Non-performing assets as a percent of total assets, excluding SBA guarantees

0.98 %

1.11 %

0.61 %

0.47 %

0.44 %


(13)

bps

53

bps


0.98 %

0.44 %


53

bps

Net charge-offs (recoveries) as a percent of average loans (annualized)

0.74 %

0.17 %

(0.07 %)

(0.03 %)

(0.00 %)


57


74



0.23 %

0.06 %


17


Allowance for credit losses to total loans

1.17 %

1.17 %

1.15 %

1.23 %

1.24 %


0


(7)



1.17 %

1.24 %


(7)


Allowance for credit losses to total loans  (excluding PPP loans)

1.17 %

1.17 %

1.16 %

1.24 %

1.29 %


0


(11)



1.17 %

1.29 %


(11)





















Capital Ratios:


















Equity to assets


11.04 %

11.67 %

12.32 %

12.55 %

12.10 %


(63)

bps

(105)

bps







Tangible common equity to tangible assets(1)

8.27 %

8.73 %

9.27 %

9.57 %

9.26 %


(46)


(99)








Leverage ratio (2)


9.48 %

10.11 %

10.31 %

9.77 %

9.41 %


(63)


7








Common equity tier 1 capital ratio (2)

10.54 %

11.17 %

11.59 %

12.64 %

13.09 %


(63)


(255)








Tier 1 risk-based capital ratio (2)

10.88 %

11.53 %

11.97 %

13.06 %

13.52 %


(65)


(264)








Total risk-based capital ratio (2)

14.80 %

15.71 %

16.29 %

17.66 %

18.52 %


(91)


(372)



























(1) See Reconciliation of Non-GAAP financial measures.






(2) December 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 - 4Q 2022 vs.


Condensed Consolidated Balance Sheets (unaudited)

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


3Q 2022


4Q 2021


Assets 












Cash and cash equivalents

$         77,859

$         97,738

$         70,721

$       298,230

$       530,167


(20.34)

%

(85.31)

%

Investment securities-available for sale

236,315

238,891

257,180

271,626

271,332


(1.08)


(12.91)


Investment securities-held to maturity

13,520

14,391

14,978

16,138

22,940


(6.05)


(41.06)


Loans held for sale

27,626

13,388

16,096

-

-


106.35


-


Loans receivable, net of deferred fees

2,948,836

2,737,086

2,628,797

2,393,669

2,339,986


7.74


26.02


Allowance for credit losses

(34,544)

(31,956)

(30,209)

(29,379)

(29,105)


8.10


18.69



Net loans


2,914,292

2,705,130

2,598,588

2,364,290

2,310,881


7.73


26.11


Stock in Federal Reserve Bank and Federal Home Loan Bank

25,815

16,689

12,940

11,927

15,521


54.68


66.32


Bank premises and equipment, net

25,257

25,534

26,113

29,872

30,410


(1.08)


(16.95)


Operating lease right-of-use assets

5,335

5,511

4,777

5,305

5,866


(3.19)


(9.05)


Goodwill and other intangible assets

107,863

108,170

108,524

106,075

106,416


(0.28)


1.36


Assets held for sale, net

3,115

3,127

3,127

-

-


(0.38)


100.00


Bank-owned life insurance

67,201

67,519

67,339

67,099

66,724


(0.47)


0.71


Other real estate owned

-

1,041

1,041

1,041

1,163


(100.00)


(100.00)


Deferred tax assets, net

18,289

17,892

14,658

12,380

9,571


2.22


91.09


Other assets


49,050

42,141

40,496

35,893

36,362


16.39


34.89



Total assets

$    3,571,537

$    3,357,162

$    3,236,578

$    3,219,876

$    3,407,353


6.39

%

4.82

%














Liabilities and stockholders' equity











Demand deposits

$       582,556

$       687,272

$       653,181

$       559,682

$       530,282


(15.24)

%

9.86

%

NOW accounts


617,687

637,786

677,237

730,235

849,738


(3.15)


(27.31)


Money market accounts

811,365

803,050

802,953

831,580

799,759


1.04


1.45


Savings accounts

245,713

217,220

220,211

225,291

222,862


13.12


10.25


Time deposits


465,057

362,992

329,223

339,456

360,575


28.12


28.98


    Total deposits


2,722,378

2,708,320

2,682,805

2,686,244

2,763,216


0.52


(1.48)


Securities sold under agreements to repurchase - short term

6,445

9,886

10,020

11,231

9,962


(34.81)


(35.30)


Federal Home Loan Bank advances

325,000

125,000

25,000

-

100,000


160.00


225.00


Subordinated debt and notes

95,312

95,241

95,170

95,099

95,028


0.07


0.30


Operating lease liabilities

5,767

6,044

5,299

5,897

6,498


(4.58)


(11.25)


Other liabilities


22,232

20,863

19,647

17,210

20,768


6.56


7.05



Total liabilities

3,177,134

2,965,354

2,837,941

2,815,681

2,995,472


7.14


6.06


Stockholders' equity

394,403

391,808

398,637

404,195

411,881


0.66


(4.24)



Total liabilities and stockholders' equity

$    3,571,537

$    3,357,162

$    3,236,578

$    3,219,876

$    3,407,353


6.39

%

4.82

%














Tangible common equity(1)

$       286,540

$       283,638

$       290,113

$       298,120

$       305,465


1.02

%

(6.20)

%




















































Primis Financial Corp.   

















(Dollars in thousands)

For Three Months Ended:


Variance - 4Q 2022 vs.



For Twelve Months Ended:


Variance





















Condensed Consolidated Statement of Operations (unaudited)

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


3Q 2022


4Q 2021



4Q 2022

4Q 2021


YTD


Interest and dividend income

$         38,635

$         32,596

$         28,258

$         26,585

$         28,503


18.53

%

35.55

%


$    126,074

$    113,243


11.33

%

Interest expense


9,058

5,146

3,652

3,731

4,262


76.02


112.53



21,587

19,040


13.38



Net interest income

29,577

27,450

24,606

22,854

24,241


7.75


22.01



104,487

94,203


10.92


Provision for (recovery of) credit losses

7,860

2,890

422

99

(1,299)


171.97


 NM 



11,271

(5,801)


(294.29)



Net interest income after provision for (recovery of) credit losses

21,717

24,560

24,184

22,755

25,540


(11.58)


(14.97)



93,216

100,004


(6.79)


Account maintenance and deposit service fees

1,427

1,525

1,442

1,351

1,420


(6.43)


0.49



5,745

7,309


(21.40)


Income from bank-owned life insurance

847

394

378

375

535


114.97


58.32



1,994

1,687


18.20


Gain on debt extinguishment

-

-

-

-

573


-


(100.00)



-

573


(100.00)


Mortgage banking income

2,264

2,197

593

-

-


3.05


100.00



5,054

-


100.00


Gain on sale of LLC investments

4,411

-

-

-

-


100.00


100.00



4,710

-


100.00


Other 


2,039

1,504

217

364

359


35.57


 NM 



3,825

1,566


144.25



Noninterest income

10,988

5,620

2,630

2,090

2,887


95.52


280.60



21,328

11,135


91.54


Employee compensation and benefits

16,213

12,594

10,573

9,625

9,527


28.74


70.18



49,005

36,741


33.38


Occupancy and equipment expenses

2,899

2,857

2,546

2,557

2,487


1.47


16.57



10,859

9,578


13.37


Amortization of core deposit intangible

317

326

341

341

342


(2.76)


(7.31)



1,325

1,364


(2.86)


Virginia franchise tax expense

814

813

814

813

733


0.12


11.05



3,254

2,899


12.25


Data processing expense

1,702

1,528

1,293

1,197

934


11.39


82.23



6,013

3,850


56.18


Telecommunication and communication expense

343

342

366

382

439


0.29


(21.87)



1,433

1,790


(19.94)


Net (gain) loss on other real estate owned

131

-

-

(59)

70


100.00


87.14



72

87


(17.24)


Loss on bank premises and equipment

-

64

620

-

-


(100.00)


-



684

-


100.00


Professional fees


1,605

1,261

827

1,387

1,238


27.28


29.64



4,787

5,467


(12.44)


Other expenses


5,066

3,976

3,050

2,744

2,722


27.41


86.11



14,836

9,624


54.16



Noninterest expense

29,090

23,761

20,430

18,987

18,492


22.43


57.31



92,268

71,400


29.23


Income from continuing operations before income taxes

3,615

6,419

6,384

5,858

9,935


(43.68)


(63.61)



22,276

39,739


(43.94)


Income tax expense 

530

1,365

1,375

1,265

2,284


(61.17)


(76.80)



4,535

8,721


(48.00)



Income from continuing operations

3,085

5,054

5,009

4,593

7,651


(38.96)


(59.68)



17,741

31,018


(42.80)


Income (loss) from discontinued operations before income taxes

-

-

-

-

-


-


-



-

294


(100.00)


Income tax expense (benefit)

-

-

-

-

-


-


-



-

64


(100.00)



Income (loss) from discontinued operations

-

-

-

-

-


-


-



-

230


(100.00)



Net income 

$           3,085

$           5,054

$           5,009

$           4,593

$           7,651


(38.96)

%

(59.68)

%


$      17,741

$      31,248


(43.23)

%




















(1) See Reconciliation of Non-GAAP financial measures.












 The company defines "NM" as not meaningful for increases or decreases greater than 300 percent.











































Primis Financial Corp.   











(Dollars in thousands)

As Of:


Variance - 4Q 2022 vs.















Loan Portfolio Composition

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


3Q 2022


4Q 2021


Loans held for sale

$         27,626

$         13,388

$         16,096

$                  -

$                  -


106.35

%

100.00

%

Loans secured by real estate:












Commercial real estate - owner occupied

461,126

437,636

433,840

406,285

389,109


5.37


18.51



Commercial real estate - non-owner occupied

581,168

573,732

600,436

615,682

590,523


1.30


(1.58)



Secured by farmland

8,436

8,852

9,305

8,896

10,003


(4.70)


(15.67)



Construction and land development

148,762

138,371

117,604

116,365

121,520


7.51


22.42



Residential 1-4 family

610,919

616,764

607,548

575,946

548,830


(0.95)


11.31



Multi-family residential

140,321

137,253

144,406

152,266

164,071


2.24


(14.48)



Home equity lines of credit

65,152

65,852

69,860

72,440

73,877


(1.06)


(11.81)



     Total real estate loans

2,015,884

1,978,460

1,982,999

1,947,880

1,897,933


1.89


6.21















Commercial loans

523,110

470,934

448,582

336,961

303,697


11.08


72.25


Paycheck Protection Program loans

4,564

8,014

17,525

31,404

77,319


(43.05)


(94.10)


Consumer loans


405,278

279,678

179,691

77,424

61,037


44.91


 NM 



Loans receivable, net of deferred fees

$    2,948,836

$    2,737,086

$    2,628,797

$    2,393,669

$    2,339,986


7.74

%

26.02

%














Loans by Risk Grade:











  Pass, not graded

$                  -

$                  -

$                  -

$                  -

$                  -


-

%

-

%

  Pass Grade 1 - Highest Quality

600

616

609

786

641


(2.60)


(6.40)


  Pass Grade 2 - Good Quality

209,605

149,389

129,571

8,734

103,496


40.31


102.52


  Pass Grade 3 - Satisfactory Quality

1,591,364

1,520,364

1,513,054

1,413,480

1,327,718


4.67


19.86


  Pass Grade 4 - Pass

1,073,952

984,012

890,709

895,197

836,610


9.14


28.37


  Pass Grade 5 - Special Mention

32,278

35,410

67,736

51,884

31,112


(8.84)


3.75


  Grade 6 - Substandard

41,037

47,295

27,118

23,588

40,409


(13.23)


1.55


  Grade 7 - Doubtful

-

-

-

-

-


-


-


  Grade 8 - Loss


-

-

-

-

-


-


-


Total loans


$    2,948,836

$    2,737,086

$    2,628,797

$    2,393,669

$    2,339,986


7.74

%

26.02

%







(Dollars in thousands)

As Of or For Three Months Ended:









Asset Quality Information

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021

Allowance for Credit Losses: 



Balance at beginning of period

$        (31,956)

$        (30,209)

$        (29,379)

$        (29,105)

$        (30,386)

(Provision for) / recovery of allowance for credit losses

(7,860)

(2,890)

(422)

(99)

1,299

Net charge-offs


5,272

1,143

(408)

(175)

(18)

Ending balance


$        (34,544)

$        (31,956)

$        (30,209)

$        (29,379)

$        (29,105)









Reserve for Unfunded Commitments:



Balance at beginning of period

$          (1,380)

$          (1,069)

$          (1,237)

$            (977)

$          (1,129)

(Expense for) / recovery of unfunded loan commitment reserve

(36)

(311)

168

(260)

152

Total Reserve for Unfunded Commitments

$          (1,416)

$          (1,380)

$          (1,069)

$          (1,237)

$            (977)

























As Of:


Variance - 4Q 2022 vs.















Non-Performing Assets:

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


3Q 2022


4Q 2021


Nonaccrual loans

$         35,484

$         36,851

$         19,635

$         14,941

$         15,029


(3.71)

%

136.10

%

Accruing loans delinquent 90 days or more

3,361

1,855

1,512

1,817

283


81.19


 NM 


Total non-performing loans

38,845

38,706

21,147

16,758

15,312


0.36


153.69


Other real estate owned

-

1,041

1,041

1,041

1,163


(100.00)


(100.00)


Total non-performing assets

$         38,845

$         39,747

$         22,188

$         17,799

$         16,475


(2.27)


135.78


SBA guaranteed portion of non-performing loans

$           3,969

$           2,573

$           2,319

$           2,651

$           1,388


54.26


185.95















Troubled debt restructuring

$           3,599

$           3,170

$           2,695

$           3,103

$           3,401


13.53


5.8















 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.



For Twelve Months Ended:


Variance





















Average Balance Sheet

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


3Q 2022


4Q 2021



4Q 2022

4Q 2021


YTD


Assets


















Loans held for sale

$         22,413

$         21,199

$           6,936

$                  -

$                  -


5.73

%

100.00

%


$      12,722

$               -


100.00

%

Loans, net of deferred fees 

2,824,892

2,669,605

2,509,978

2,360,782

2,317,260


5.82


21.91



2,592,801

2,342,802


10.67


Investment securities

253,345

269,780

287,722

302,431

258,265


(6.09)


(1.91)



278,162

224,505


23.90


Other earning assets

92,604

90,268

158,817

466,952

632,841


2.59


(85.37)



200,828

560,994


(64.20)


Total earning assets

3,193,254

3,050,852

2,963,453

3,130,165

3,208,366


4.67


(0.47)



3,084,513

3,128,301


(1.40)


Investment in STM - Held for sale

9,941


-


(100.00)



11,974


(100.00)


Other assets


246,593

234,355

228,893

226,320

229,718


5.22


7.35



234,097

228,703


2.36


Total assets


$    3,439,847

$    3,285,207

$    3,192,346

$    3,356,485

$    3,448,025


4.71

%

(0.24)

%


$  3,318,610

$  3,368,978


(1.50)

%




















Liabilities and stockholders' equity

















Demand deposits

$       648,151

$       665,020

$       596,714

$       545,530

$       547,504


(2.54)

%

18.38

%


$    614,285

$    522,683


17.53

%

Interest-bearing liabilities:

















NOW and other demand accounts

624,868

660,387

695,481

817,430

878,652


(5.38)


(28.88)



698,907

860,482


(18.78)


Money market accounts

805,303

803,860

810,781

809,460

784,942


0.18


2.59



807,330

726,059


11.19


Savings accounts

232,543

219,167

222,274

224,716

219,823


6.10


5.79



224,682

208,202


7.92


Time deposits 


379,088

343,986

329,198

350,368

368,603


10.20


2.84



350,720

405,670


(13.55)


   Total Deposits

2,689,953

2,692,420

2,654,448

2,747,504

2,799,524


(0.09)


(3.91)



2,695,924

2,723,096


(1.00)


Borrowings


325,100

166,621

107,784

171,293

209,215


95.11


55.39



193,050

218,955


(11.83)


  Total Funding


3,015,053

2,859,041

2,762,232

2,918,797

3,008,739


5.46


0.21



2,888,974

2,942,051


(1.80)


Other Liabilities


26,318

23,832

22,095

23,057

27,407


10.43


(3.97)



23,825

22,358


6.56


Stockholders' equity

398,476

402,334

408,019

414,631

411,879


(0.96)


(3.25)



405,811

404,569


0.31


Total liabilities and stockholders' equity

$    3,439,847

$    3,285,207

$    3,192,346

$    3,356,485

$    3,448,025


4.71

%

(0.24)

%


$  3,318,610

$  3,368,978


(1.50)

%




















Memo:  Average PPP loans

$           5,926

$         11,868

$         23,950

$         51,491

$       102,078


(50.07)

%

(94.19)

%


$      23,152

$    229,447


(89.91)

%




















Net Interest Income

















Loans held for sale

$             349

$             263

$               93

$                  -

$                  -


32.70

%

100.00

%


$           705

$               -


100.00

%

Loans



35,881

30,260

26,272

24,749

26,701


18.58


34.38



117,162

107,021


9.48


Investment securities

1,571

1,518

1,445

1,430

1,242


3.49


26.49



5,964

4,440


34.32


Other earning assets

834

555

448

406

560


50.27


48.93



2,243

1,782


25.87


   Total Earning Assets

38,635

32,596

28,258

26,585

28,503


18.53


35.55



126,074

113,243


11.33





















Non-interest bearing DDA

-

-

-

-

-


-


-



-

-


-


NOW and other interest-bearing demand accounts

544

536

556

666

832


1.49


(34.62)



2,303

4,010


(42.57)


Money market accounts

2,894

1,667

938

859

952


73.61


203.99



6,357

4,246


49.72


Savings accounts

305

141

142

149

154


116.31


98.05



737

618


19.26


Time deposits 


1,567

943

674

700

809


66.17


93.70



3,884

4,238


(8.35)


  Total Deposit Costs

5,310

3,287

2,310

2,374

2,747


61.55


93.30



13,281

13,112


1.29





















Borrowings


3,748

1,859

1,342

1,357

1,515


101.61


147.39



8,306

5,928


40.11


  Total Funding Costs

9,058

5,146

3,652

3,731

4,262


76.02


112.53



21,587

19,040


13.38





















Net Interest Income

$         29,577

$         27,450

$         24,606

$         22,854

$         24,241


7.75

%

22.01

%


$    104,487

$      94,203


10.92

%




















Memo:  SBA PPP loan interest and fee income

$               14

$               28

$               59

$             435

$           2,503


(50.00)

%

(99.44)

%


$           533

$      13,985


(96.19)

%

Memo:  SBA PPP loan funding costs

$                 5

$               10

$               21

$               44

$               90


(50.00)

%

(94.44)

%


$             81

$           803


(89.91)

%

Memo: Revenue impact of third-party managed portfolio

$          1,369

$                  -

$                  -

$                  -

$                  -


100.00

%

100.00

%


$        1,369

$               -


100.00

%







































Net Interest Margin

















Loans held for sale

6.18 %

4.92 %

5.38 %

0.00 %

0.00 %


126

bps

618

bps


5.54 %

0.00 %


554

bps

Loans



5.04 %

4.50 %

4.20 %

4.25 %

4.57 %


54


47



4.52 %

4.57 %


(5)


Investments


2.46 %

2.23 %

2.01 %

1.92 %

1.91 %


23


55



2.14 %

1.98 %


16


Other Earning Assets

3.57 %

2.44 %

1.13 %

0.35 %

0.35 %


113


322



1.12 %

0.32 %


80


  Total Earning Assets

4.80 %

4.24 %

3.82 %

3.44 %

3.52 %


56


128



4.09 %

3.62 %


47





















NOW



0.35 %

0.32 %

0.32 %

0.33 %

0.38 %


3


(3)



0.33 %

0.47 %


(14)


MMDA


1.43 %

0.82 %

0.46 %

0.43 %

0.48 %


61


95



0.79 %

0.58 %


21


Savings


0.52 %

0.26 %

0.26 %

0.27 %

0.28 %


26


24



0.33 %

0.30 %


3


CDs 



1.64 %

1.09 %

0.82 %

0.81 %

0.87 %


55


77



1.11 %

1.04 %


7


  Cost of Interest Bearing Deposits

1.03 %

0.64 %

0.45 %

0.44 %

0.48 %


39


55



0.64 %

0.60 %


4


  Cost of Deposits

0.78 %

0.48 %

0.35 %

0.35 %

0.39 %


30


39



0.49 %

0.48 %


1



















-


Other Funding


4.57 %

4.43 %

4.99 %

3.22 %

2.87 %


14


170



4.30 %

2.71 %


159


  Total Cost of Funds

1.19 %

0.71 %

0.53 %

0.52 %

0.56 %


48


63



0.75 %

0.65 %


10





















Net Interest Margin

3.67 %

3.57 %

3.33 %

2.96 %

3.00 %


10


67



3.39 %

3.01 %


38


Net Interest Spread

3.28 %

3.31 %

3.15 %

2.81 %

2.96 %


(3)


32



3.14 %

2.97 %


17





















Memo:  Excluding SBA PPP loans and revenue impact of third-party managed portfolio


















Loans


4.86 %

4.51 %

4.23 %

4.27 %

4.33 %


34

bps

52

bps


4.49 %

4.40 %


8

bps


Total Earning Assets

4.64 %

4.25 %

3.85 %

3.44 %

3.32 %


39


132



4.06 %

3.42 %


63



Net Interest Margin*

3.51 %

3.58 %

3.35 %

2.96 %

2.79 %


(7)


72



3.35 %

2.79 %


56





















*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 Twelve Months Ended:













Reconciliation of Non-GAAP items:

4Q 2022

3Q 2022

2Q 2022

1Q 2022

4Q 2021


4Q 2022

4Q 2021

Net income from continuing operations

$           3,085

$           5,054

$           5,009

$           4,593

$           7,651


$   17,741


$   31,018

Non-GAAP adjustments to Net Income from continuing operations:











Branch Consolidation / Other restructuring

1,175

308

901

-

-


2,384


200


(Gain) on sale of Infinex investment

(4,144)

-

-

-

-


(4,144)


-


Merger expenses

-

-

401

115

-


516


-


(Gain) on debt extinguishment

-

-

-

-

(573)


-


(573)


Income tax effect

641

(67)

(281)

(25)

124


269


81


Net income from continuing operations adjusted for nonrecurring income and expenses

$             757

$           5,295

$           6,030

$           4,683

$           7,202


$   16,766


$   30,726













Net income from continuing operations

$           3,085

$           5,054

$           5,009

$           4,593

$           7,651


$   17,741


$   31,018


Income tax expense

530

1,365

1,375

1,265

2,284


4,535


8,721


Provision for credit losses (incl. unfunded commitment expense)

7,896

3,201

254

359

(1,451)


172


(5,563)

Pre-tax pre-provision earnings from continuing operations

$         11,511

$           9,620

$           6,638

$           6,217

$           8,484


$   22,448


$   34,176


Effect of adjustment for nonrecurring income and expenses and impact of third-party managed portfolio

(4,791)

(912)

1,302

115

(573)


(4,286)


(373)

Pre-tax pre-provision operating earnings from continuing operations

$           6,720

$           8,708

$           7,940

$           6,332

$           7,911


$   18,162


$   33,803













Return on average assets from continuing operations

0.36 %

0.61 %

0.63 %

0.55 %

0.88 %


0.53 %


0.92 %


Effect of adjustment for nonrecurring income and expenses

(0.27 %)

0.03 %

0.13 %

0.01 %

(0.05 %)


(0.03 %)


(0.01 %)

Operating return on average assets from continuing operations

0.09 %

0.64 %

0.76 %

0.57 %

0.83 %


0.51 %


0.92 %













Return on average assets from continuing operations

0.36 %

0.61 %

0.63 %

0.55 %

0.88 %


0.53 %


0.92 %


Effect of tax expense

0.06 %

0.16 %

0.17 %

0.15 %

0.26 %


0.14 %


0.26 %


Effect of provision for credit losses  (incl. unfunded commitment expense)

0.91 %

0.39 %

0.03 %

0.04 %

(0.17 %)


0.01 %


(0.17 %)

Pre-tax pre-provision return on average assets from continuing operations

1.33 %

1.16 %

0.83 %

0.75 %

0.98 %


0.68 %


1.02 %


Effect of adjustment for nonrecurring income and expenses and expenses and impact of third-party managed portfolio

(0.55 %)

(0.11 %)

0.16 %

0.01 %

(0.07 %)


(0.13 %)


(0.01 %)

Pre-tax pre-provision operating return on average assets from continuing operations

0.78 %

1.05 %

1.00 %

0.77 %

0.91 %


0.55 %


1.01 %













Return on average equity from continuing operations

3.07 %

4.98 %

4.92 %

4.49 %

7.37 %


4.37 %


7.67 %


Effect of adjustment for nonrecurring income and expenses

(2.32 %)

0.24 %

1.00 %

0.09 %

(0.43 %)


(0.24 %)


(0.07 %)

Operating return on average equity from continuing operations

0.75 %

5.22 %

5.93 %

4.58 %

6.94 %


4.13 %


7.59 %


Effect of goodwill and other intangible assets

0.28 %

1.92 %

2.15 %

1.58 %

2.42 %


1.48 %


2.73 %

Operating return on average tangible equity from continuing operations

1.03 %

7.14 %

8.08 %

6.16 %

9.36 %


5.62 %


10.33 %













Efficiency ratio from continuing operations

71.71 %

71.85 %

75.01 %

76.11 %

68.16 %


73.34 %


67.43 %


Effect of adjustment for nonrecurring income and expenses and impact of third-party managed portfolio

8.17 %

1.79 %

(4.78 %)

(0.46 %)

1.47 %


1.71 %


0.18 %

Operating efficiency ratio from continuing operations

79.89 %

73.64 %

70.23 %

75.65 %

69.63 %


75.05 %


67.61 %













Earnings per share from continuing operations - Basic

$            0.13

$            0.21

$            0.20

$            0.19

$            0.31


$      0.72


$      1.27


Effect of adjustment for nonrecurring income and expenses

(0.10)

0.01

0.05

0.00

(0.02)


(0.04)


(0.01)

Operating earnings per share from continuing operations - Basic

$            0.03

$            0.22

$            0.25

$            0.19

$            0.29


$      0.68


$      1.26













Earnings per share from continuing operations - Diluted

$            0.12

$            0.20

$            0.20

$            0.19

$            0.31


$      0.72


$      1.26


Effect of adjustment for nonrecurring income and expenses

(0.09)

0.01

0.04

(0.00)

(0.02)


(0.04)


(0.01)

Operating earnings per share from continuing operations - Diluted

$            0.03

$            0.21

$            0.24

$            0.19

$            0.29


$      0.68


$      1.25













Book value per share

$           15.98

$           15.89

$           16.17

$           16.42

$           16.76


$    15.98


$    16.76


Effect of goodwill and other intangible assets

(4.37)

(4.39)

(4.40)

(4.31)

(4.34)


(4.37)


(4.33)

Tangible book value per share

$           11.61

$           11.54

$           11.77

$           12.11

$           12.43


$    11.61


$    12.43













Stockholders' equity

$       394,403

$       391,808

$       398,637

$       404,195

$       411,881


$ 394,403


$ 411,881


Less goodwill and other intangible assets

(107,863)

(108,147)

(108,524)

(106,075)

(106,416)


(107,863)


(106,416)

Tangible common equity

$       286,540

$       283,661

$       290,113

$       298,120

$       305,465


$ 286,540


$ 305,465













Equity to assets


11.04 %

11.67 %

12.32 %

12.55 %

12.10 %


11.04 %


12.09 %


Effect of goodwill and other intangible assets

(2.77 %)

(2.94 %)

(3.04 %)

(2.98 %)

(2.84 %)


(2.77 %)


(2.83 %)

Tangible common equity to tangible assets

8.27 %

8.73 %

9.27 %

9.57 %

9.26 %


8.27 %


9.26 %













Net interest margin

3.67 %

3.57 %

3.33 %

2.96 %

3.00 %


3.39 %


3.01 %


Effect of adjustments for PPP associated balances and revenue impact of third-party managed portfolio*

(0.16 %)

0.01 %

0.02 %

(0.00 %)

(0.21 %)


(0.04 %)


(0.22 %)

Core net interest margin

3.51 %

3.58 %

3.35 %

2.96 %

2.79 %


3.35 %


2.79 %













*Net interest margin excluding the effect of PPP loans assumes a funding cost of 35bps on average PPP balances in all applicable periods