Primis Financial Corp. ((FRST)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Primis Financial Corp. painted a positive picture of the company’s financial health and strategic direction. The sentiment was overwhelmingly optimistic, with strong financial performance and strategic growth initiatives taking center stage. The company is particularly focused on expanding its digital platforms and mortgage services, which have shown significant promise. Despite facing some challenges with consumer program volatility, Primis is well-positioned for continued growth, supported by cost-saving measures and a robust market position in specialized banking services.
Strong Net Income and Earnings
Primis Financial Corp. reported a net income of $8.4 million, or $0.34 per share, for the second quarter. This reflects the company’s strong financial performance and its ability to generate substantial earnings, reinforcing investor confidence.
Improved Operating Leverage
The company achieved wide operating leverage with incremental margins in the mid-4% range. Operating expenses remained steady or declined, showcasing Primis’s efficiency in managing costs while enhancing profitability.
Digital Platform Success
Primis’s digital platform raised $36 million nationwide at a rate of 4.06%, leading to a significant reduction in deposit costs to 2.89%. This represents a 32% decrease compared to the same quarter last year, highlighting the platform’s success in optimizing financial operations.
Mortgage Growth
Primis Mortgage demonstrated impressive growth by closing about $323 million in the quarter, a 52% increase from the same quarter in 2024. This underscores the company’s strong performance in the mortgage sector.
Cost Reduction Initiatives
The company has implemented cost reduction initiatives, including a negotiated solution with its core provider, saving approximately $300,000 per month starting in August. Additional technology-oriented savings are expected, further enhancing financial efficiency.
Panacea Financial Performance
Panacea Financial, a division of Primis, grew to over $500 million in outstanding credit and was rated the #1 bank for doctors on Google. This illustrates strong performance and market recognition, bolstering Primis’s reputation in specialized banking services.
Loan Growth
Gross loans held for investment increased by almost 12% annualized from March 31 to June 30, with a focus on high-yield earning assets. This growth trajectory highlights Primis’s strategic focus on expanding its loan portfolio.
Consumer Program Volatility
The second quarter was the last to bear significant noise due to the consumer program, impacting the reported net interest income. This challenge is expected to subside, allowing for clearer financial reporting in future quarters.
Potential Loan Growth Moderation
Loan growth may slow in the second half of 2025, particularly in the mortgage warehouse, which is expected to moderate in the fourth quarter. This potential moderation reflects a cautious approach to maintaining sustainable growth.
Forward-Looking Guidance
During the earnings call, Primis Financial Corp. provided forward-looking guidance, projecting a 12% annualized loan growth driven by divisions like Panacea and Primis Mortgage. The company also highlighted a negotiated savings of $300,000 per month with a core provider, expected to increase to $600,000 by early 2027. Primis aims to maintain operating expenses around $18 million per quarter by 2026, demonstrating a commitment to financial discipline and strategic growth.
In summary, Primis Financial Corp.’s earnings call conveyed a strong sense of optimism and strategic foresight. The company’s robust financial performance, coupled with strategic initiatives in digital platforms and mortgage services, positions it well for future growth. Despite some challenges, Primis’s cost-saving measures and market position in specialized banking services provide a solid foundation for continued success.