Southern National Bancorp of Virginia Earnings 2021-03-31

Balance Sheet	Income Statement	Cash Flow

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 March 31, 2021

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)

6830 Old Dominion Drive

McLean, Virginia 22101

(Address of principal executive offices) (zip code)

(703) 893-7400

(Registrant’s telephone number, including area code)

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

(Former name or former address, if changed since last report)

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 May 3, 2021, there were 24,530,417 shares of common stock, $0.01 par value, outstanding.

Table of Contents

PRIMIS FINANCIAL CORP.

FORM 10-Q

March 31, 2021

INDEX		PAGE
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020		2
Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2021 and 2020		3
Consolidated Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2021 and 2020		4
Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020		5
Notes to Unaudited Consolidated Financial Statements		6

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		32

Item 3 – Quantitative and Qualitative Disclosures about Market Risk		43

Item 4 – Controls and Procedures		45

PART II - OTHER INFORMATION

Item 1 – Legal Proceedings		45

Item 1A – Risk Factors		46

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		46

Item 3 – Defaults Upon Senior Securities		46

Item 4 – Mine Safety Disclosures		46

Item 5 – Other Information		46

Item 6 - Exhibits		47

Signatures		49

Table of Contents

PRIMIS FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)


	March 31,		December 31,
	2021		2020
	(unaudited)		*
ASSETS
Cash and cash equivalents:
Cash and due from financial institutions	$	7,791	$	8,585
Interest-bearing deposits in other financial institutions		472,489		187,600
Total cash and cash equivalents		480,280		196,185

Securities available for sale, at fair value		170,216		153,233

Securities held to maturity, at amortized cost (fair value of $33,978 and $41,832, respectively)		33,180		40,721

Total loans		2,391,529		2,440,496
Less allowance for credit losses		(34,893)		(36,345)
Net loans		2,356,636		2,404,151
Stock in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB)		15,521		16,927
Equity method investment in mortgage affiliate		13,912		12,652
Preferred investment in mortgage affiliate		3,305		3,305
Bank premises and equipment, net		30,076		30,306
Operating lease right-of-use assets		6,947		7,511
Goodwill		101,954		101,954
Core deposit intangibles, net		5,485		5,826
Bank-owned life insurance		65,569		65,409
Other real estate owned		2,255		3,078
Deferred tax assets, net		14,702		14,646
Accrued interest receivable		15,604		19,998
Other assets		14,828		12,771
Total assets	$	3,330,470	$	3,088,673

LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits	$	511,611	$	440,674
Interest-bearing deposits:
NOW accounts		821,746		714,752
Money market accounts		713,968		603,318
Savings accounts		202,488		183,814
Time deposits		438,773		490,048
Total interest-bearing deposits		2,176,975		1,991,932
Total deposits		2,688,586		2,432,606

Securities sold under agreements to repurchase - short term		16,445		16,065
FHLB advances		100,000		100,000
Junior subordinated debt - long term		9,694		9,682
Senior subordinated notes - long term		85,673		105,647
Operating lease liabilities		7,629		8,238
Other liabilities		24,457		25,881
Total liabilities		2,932,484		2,698,119
Commitments and contingencies (See Note 6)

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; 24,532,795 and 24,368,612 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		244		243
Additional paid in capital		310,582		308,870
Retained earnings		84,897		77,956
Accumulated other comprehensive income		2,263		3,485
Total stockholders' equity		397,986		390,554
Total liabilities and stockholders' equity	$	3,330,470	$	3,088,673

* Derived from audited consolidated financial statements

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

PRIMIS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

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


	For the Three Months Ended
	March 31,
	2021		2020
Interest and dividend income:
Interest and fees on loans	$	28,957	$	26,741
Interest and dividends on taxable securities		919		1,244
Interest and dividends on tax exempt securities		123		117
Interest and dividends on other earning assets		309		379
Total interest and dividend income		30,308		28,481
Interest expense:
Interest on deposits		3,816		6,503
Interest on repurchase agreements		26		19
Interest on junior subordinated debt		95		139
Interest on senior subordinated notes		1,327		712
Interest on other borrowings		89		593
Total interest expense		5,353		7,966
Net interest income		24,955		20,515
Provision (recovery) for credit losses		(1,372)		3,450
Net interest income after provision for credit losses		26,327		17,065

Noninterest income:
Account maintenance and deposit service fees		1,817		1,698
Income from bank-owned life insurance		386		386
Equity gain from mortgage affiliate		1,315		231
Recoveries related to acquired charged-off loans and investment securities		79		184
Other		220		321
Total noninterest income		3,817		2,820

Noninterest expenses:
Salaries and benefits		9,372		12,309
Occupancy expenses		1,539		1,939
Furniture and equipment expenses		816		619
Amortization of core deposit intangible		341		341
Virginia franchise tax expense		675		570
Data processing expense		799		707
Telephone and communication expense		522		368
Net (gain) loss on other real estate owned		(60)		71
Professional fees		1,287		1,193
Other operating expenses		2,885		1,735
Total noninterest expenses		18,176		19,852
Income before income taxes		11,968		33
Income tax expense		2,585		6
Net income	$	9,383	$	27
Other comprehensive income:
Unrealized gain (loss) on available for sale securities	$	(1,736)	$	3,014
Accretion of amounts previously recorded upon transfer to held to maturity from available for sale		189		4
Net unrealized gain (loss)		(1,547)		3,018
Tax effect		(325)		634
Other comprehensive income (loss)		(1,222)		2,384
Comprehensive income	$	8,161	$	2,411
Earnings per share, basic	$	0.39	$	0.00
Earnings per share, diluted	$	0.38	$	0.00

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

PRIMIS FINANCIAL CORP.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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


	For the Three Months Ended March 31, 2021
							Accumulated
			Additional				Other
	Common		Paid in		Retained		Comprehensive
	Stock		Capital		Earnings		Income		Total
Balance - December 31, 2020	$	243	$	308,870	$	77,956	$	3,485	$	390,554
Net income		—		—		9,383		—		9,383
Changes in other comprehensive income on investment securities (net of tax $(325))		—		—		—		(1,222)		(1,222)
Dividends on common stock ($0.10 per share)		—		—		(2,442)		—		(2,442)
Issuance of common stock under Stock Incentive Plan		1		1,237		—		—		1,238
Repurchase of restricted stock		—		(7)		—		—		(7)
Stock-based compensation expense		—		482		—		—		482
Balance - March 31, 2021	$	244	$	310,582	$	84,897	$	2,263	$	397,986

	For the Three Months Ended March 31, 2020
							Accumulated
			Additional				Other
	Common		Paid in		Retained		Comprehensive
	Stock		Capital		Earnings		Income		Total
Balance - December 31, 2019	$	241	$	306,755	$	69,462	$	783	$	377,241
Net income		—		—		27		—		27
Changes in other comprehensive income on investment securities (net of tax $634)		—

Price	15.59	EPS	1
Shares	24	P/E	12
MCap	380	P/FCF	14
Net Debt	-49	EBIT	65
TEV	331	TEV/EBIT	5
TTM 2019-09-30, in MM, except price, ratios

10-Q	2021-03-31	Filed 2021-05-10
10-K	2020-12-31	Filed 2021-03-16
10-Q	2020-09-30	Filed 2020-11-09
10-Q	2020-06-30	Filed 2020-08-10
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10-K	2019-12-31	Filed 2020-03-16
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10-Q	2019-06-30	Filed 2019-08-08
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10-K	2018-12-31	Filed 2019-03-15
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10-K	2016-12-31	Filed 2017-03-16
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-08
10-Q	2016-03-31	Filed 2016-05-10
10-K	2015-12-31	Filed 2016-03-15
10-Q	2015-09-30	Filed 2015-11-09
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10-Q	2014-06-30	Filed 2014-08-06
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10-K	2013-12-31	Filed 2014-03-12
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-09
10-Q	2013-03-31	Filed 2013-05-10
10-K	2012-12-31	Filed 2013-03-05
10-Q	2012-09-30	Filed 2012-11-08
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-05-08	Filed 2012-05-10
10-K	2011-12-31	Filed 2012-04-17
10-Q	2011-09-30	Filed 2011-11-09
10-Q	2011-06-30	Filed 2011-08-09
10-Q	2011-03-31	Filed 2011-05-09
10-K	2010-12-31	Filed 2011-03-15
10-Q	2010-09-30	Filed 2010-11-08
10-Q	2010-06-30	Filed 2010-08-12
10-Q	2010-03-31	Filed 2010-05-14
10-K	2009-12-31	Filed 2010-03-08

8-K	2020-10-26
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8-K	2018-03-12
8-K	2018-01-26

EX-10.1	sona-20210331xex10d1.htm
EX-10.2	sona-20210331xex10d2.htm
EX-10.3	sona-20210331xex10d3.htm
EX-31.1	sona-20210331xex31d1.htm
EX-31.2	sona-20210331xex31d2.htm
EX-32.1	sona-20210331xex32d1.htm

SONA 10Q Quarterly Report

Southern National Bancorp of Virginia Earnings 2021-03-31