Primis Financial (FRST) Q4 2024 earnings summary

Executive summary

• Moved consumer loan portfolio to held for sale, neutralizing $20 million in credit costs and positioning for strategic options and cleaner 2025 results.

• Strategic repositioning included selling the Life Premium Finance business, launching a mortgage warehouse lending business, and focusing on scalable, profitable business lines.

• Core Community Bank remains the primary focus for 2025, operating 24 branches in VA and MD, with total loans of $2.91 billion and deposits of $3.31 billion.

• Digital and national lines, including Panacea Financial and Primis Mortgage, continue to drive growth and diversification.

• Declared a $0.10 per share quarterly dividend, marking the 53rd consecutive quarterly payout.

Financial highlights

• Reported pre-tax loss of $17.4 million, primarily due to consumer loan portfolio cleanup and related provisions.

• Net interest income for Q4 2024 was $26.1 million, down 7% sequentially due to interest reversals and portfolio sales; adjusted net interest income would have been $28.6 million, up 11.3% year-over-year.

• Panacea Financial achieved $6.6 million pre-tax earnings in 2024, with a pre-tax ROA of 1.90%.

• Tangible book value per share as of December 31, 2024, was $10.77.

• Deposits per branch increased to $137,834 in 2024, up from $44,646 in 2019, reflecting strong deposit growth.

Outlook and guidance

• Loan growth for 2025 expected at $125–$175 million in the core bank, with mortgage warehouse projected to add $300 million as it replaces life premium finance.

• Primis Mortgage expects 2025 production run rate of $1.25 billion, with further growth from national construction-perm strategy.

• Digital and national lines expected to generate up to $44 million in annual revenue at run-rate balances, with margin opportunity 50% greater than previous asset classes.

• Core operating expense burden projected between $21–$22 million per quarter in 2025.

• Panacea Financial targets 10,000 clients by year-end, expanding deposit and loan offerings.