Primis Financial (FRST) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $22.6 million ($0.92 per share), up from $2.5 million in Q1 2024, driven by a $24.6 million gain on the deconsolidation of Panacea Financial Holdings (PFH).

• Performance tracked expectations, with strong momentum in the core community bank, a loan pipeline of $228 million, and mortgage warehouse balances up 80% sequentially.

• Three strategies are in place to drive higher ROA: growing earning assets, expanding mortgage division profitability, and consolidating core processing contracts.

• The digital platform funds non-core lending, supporting growth and profitability without stressing the core bank.

• Quarterly cash dividend of $0.10 per share declared, marking the 54th consecutive quarterly dividend.

Financial highlights

• Net interest income for Q1 2025 was $26.4 million, up $1.1 million year-over-year, with net interest margin expanding to 3.15% from 2.84%.

• Noninterest income rose to $32.3 million from $10.3 million, mainly due to the PFH deconsolidation gain.

• Noninterest expense decreased to $32.5 million from $37.8 million sequentially; core operating expense burden dropped by $3.2 million.

• Allowance for credit losses to total loans decreased to 1.45% from 1.86% at year-end, reflecting charge-offs in the Consumer Program portfolio.

• Book value per share increased to $14.38; tangible book value per share rose to $10.59.

Outlook and guidance

• Management expects to rebuild earning assets to pre-sale levels, targeting a 21 bps ROA increase.

• Primis Mortgage expected to add 0.15% to ROA in 2025, up from 0.05% in 2024.

• Expense growth in 2025 projected to be very low; technology consolidation could yield $6–7 million in annual savings.

• Initiatives in place could double run-rate ROA from the current 0.56%.

• Cost savings are expected from consolidating core processing systems, with impact anticipated in 2026.