Primis Financial Corp. [FRST] Filings

10-Q 1 frst-20230630x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

Commission File No. 001-33037

PRIMIS FINANCIAL CORP.

(Exact name of registrant as specified in its charter)


Virginia	20-1417448
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)

1676 International Drive, Suite 900

McLean, Virginia 22102

(Address of principal executive offices) (zip code)

(703) 893-7400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading symbol	Name of each exchange on which registered:
Common Stock, par value $0.01 per share	FRST	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b–2 of the Exchange Act:


Large accelerated filer ☐	Accelerated filer ☒	Smaller reporting company ☐

Non-accelerated filer ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of August 2, 2023, there were 24,686,764 shares of common stock, $0.01 par value, outstanding.

Table of Contents

PRIMIS FINANCIAL CORP.

FORM 10-Q

June 30, 2023

TABLE OF CONTENTS		PAGE
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022		2
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022		3
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022		4
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022		6
Notes to Unaudited Condensed Consolidated Financial Statements		7

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		35

Item 3 – Quantitative and Qualitative Disclosures about Market Risk		51

Item 4 – Controls and Procedures		53

PART II - OTHER INFORMATION

Item 1 – Legal Proceedings		54

Item 1A – Risk Factors		54

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		54

Item 3 – Defaults Upon Senior Securities		54

Item 4 – Mine Safety Disclosures		54

Item 5 – Other Information		54

Item 6 - Exhibits		55

Signatures		57

Table of Contents

PRIMIS FINANCIAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)


	June 30,		December 31,
	2023		2022
ASSETS	(unaudited)
Cash and cash equivalents:
Cash and due from financial institutions	$	6,720	$	6,868
Interest-bearing deposits in other financial institutions		94,148		70,991
Total cash and cash equivalents		100,868		77,859

Securities available-for-sale, at fair value (amortized cost of $256,101 and $269,036, respectively)		223,087		236,315

Securities held-to-maturity, at amortized cost (fair value of $11,369 and $12,449, respectively)		12,378		13,520

Loans held for sale, at fair value		57,704		27,626

Loans held for investment		3,173,638		2,946,637
Less: allowance for credit losses		(38,414)		(34,544)
Net loans		3,135,224		2,912,093

Stock in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB)		12,083		25,815
Bank premises and equipment, net		25,298		25,257
Assets held for sale		3,115		3,115
Operating lease right-of-use assets		10,707		5,335
Goodwill		104,609		104,609
Intangible assets, net		2,606		3,254
Bank-owned life insurance		67,985		67,201
Deferred tax assets, net		20,391		18,289
Other assets		72,438		49,211
Total assets	$	3,848,493	$	3,569,499

LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits	$	480,832	$	582,556
Interest-bearing deposits:
NOW accounts		817,725		617,687
Money market accounts		850,359		811,365
Savings accounts		696,750		245,713
Time deposits		471,330		465,057
Total interest-bearing deposits		2,836,164		2,139,822
Total deposits		3,316,996		2,722,378

Securities sold under agreements to repurchase - short term		3,921		6,445
FHLB advances		—		325,000
Junior subordinated debt - long term		9,806		9,781
Senior subordinated notes - long term		85,647		85,531
Operating lease liabilities		11,546		5,767
Other liabilities		27,361		22,232
Total liabilities		3,455,277		3,177,134

Commitments and contingencies (See Note 8)

Stockholders' equity:
Preferred stock, $0.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding		—		—
Common stock, $0.01 par value. Authorized 45,000,000 shares; 24,690,064 and 24,680,097 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		246		246
Additional paid in capital		312,976		312,722
Retained earnings		106,075		105,247
Accumulated other comprehensive loss		(26,081)		(25,850)
Total stockholders' equity		393,216		392,365
Total liabilities and stockholders' equity	$	3,848,493	$	3,569,499

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

PRIMIS FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands, except per share amounts) (Unaudited)



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Interest and dividend income:
Interest and fees on loans	$	43,970	$	26,337	$	85,276	$	51,060
Interest and dividends on taxable securities		1,449		1,340		2,932		2,665
Interest and dividends on tax exempt securities		102		105		203		210
Interest and dividends on other earning assets		7,158		448		11,382		854
Total interest and dividend income		52,679		28,230		99,793		54,789
Interest expense:
Interest on deposits		24,783		2,311		39,827		4,684
Interest on other borrowings		1,739		1,341		5,444		2,699
Total interest expense		26,522		3,652		45,271		7,383
Net interest income		26,157		24,578		54,522		47,406
Provision for credit losses		4,301		422		9,488		521
Net interest income after provision for credit losses		21,856		24,156		45,034		46,885

Noninterest income:
Account maintenance and deposit service fees		1,430		1,442		2,646		2,793
Income from bank-owned life insurance		394		378		814		753
Mortgage banking income		5,198		593		9,513		593
Gain on sale of loans		182		—		660		—
Credit enhancement income		1,152		—		6,038		—
Other noninterest income		130		217		347		581
Total noninterest income		8,486		2,630		20,018		4,720

Noninterest expenses:
Salaries and benefits		15,283		10,573		30,311		20,198
Occupancy expenses		1,593		1,418		3,038		2,875
Furniture and equipment expenses		1,852		1,128		3,429		2,228
Amortization of intangible assets		318		341		635		682
Virginia franchise tax expense		848		814		1,697		1,627
Data processing expense		2,828		1,293		5,079		2,783
Marketing expense		521		731		1,090		1,196
Telephone and communication expense		416		366		793		748
Net gain on other real estate owned		—		—		—		(59)
Loss on bank premises and equipment and assets held for sale		—		620		—		620
Professional fees		1,075		827		1,937		1,921
Credit enhancement costs		515		—		1,388		—
Other operating expenses		5,303		2,366		8,559		4,690
Total noninterest expenses		30,552		20,477		57,956		39,509
Income (loss) before income taxes		(210)		6,309		7,096		12,096
Income tax expense (benefit)		(22)		1,361		1,331		2,612
Net income (loss)	$	(188)	$	4,948	$	5,765	$	9,484
Other comprehensive loss:
Unrealized loss on available-for-sale securities	$	(3,299)	$	(10,723)		(293)		(24,099)
Tax benefit		(693)		(2,252)		(62)

Primis Financial Corp. [FRST] Filings
10-Q	[2023-08-09]
10-Q	[2023-05-10]
10-K	[2023-03-15]
10-Q	[2022-11-09]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-14]
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-10]
10-K	[2021-03-16]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-05-08]
10-K	[2020-03-16]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-15]
10-Q	[2018-11-09]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
10-K	[2018-03-16]
10-Q	[2017-11-09]
10-Q	[2017-08-09]
10-Q	[2017-05-09]
10-K	[2017-03-16]
10-Q	[2016-11-09]
10-Q	[2016-08-08]
10-Q	[2016-05-10]
10-K	[2016-03-15]
10-Q	[2015-11-09]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-K	[2015-03-13]
10-Q	[2014-11-10]
10-Q	[2014-08-06]
10-Q	[2014-05-09]
10-K	[2014-03-12]
10-Q	[2013-11-12]
10-Q	[2013-08-09]
10-Q	[2013-05-10]
10-K	[2013-03-05]
10-Q	[2012-11-08]
10-Q	[2012-08-09]
10-Q	[2012-05-10]
10-K	[2012-04-17]