Primis Financial Corp. Stock Price: Quote, Forecast, Splits & News (FRST)

Perplexity Finance

FRST

Primis Financial Corp.

FRST

NASDAQ

Market Closed

Monday, May 19, 2025

$9.40

-$0.01

0.11%

At close: May 19, 8:00:01 PM UTC

$9.40

$0.00

After hours: 8:05:14 PM UTC

Change

-$0.01

0.11%

Financial Profile

Prev Close

$9.41

Market Cap

$232.39M

Day Range

$9.31 - $9.54

Open

$9.31

P/E Ratio

-14.5

52W Range

$7.59 - $13.52

24H Volume

$1.53M

Dividend Yield

4.26%

EPS

-0.65

Earnings

Report Date

Apr 29, 2025

Reported Revenue

55.5M

Beat +97%

Avg 1d Change

3.65%

Report Period

Q1 2025

Reported EPS

0.14

Miss -44%

Implied Move 1d

19.59%

Transcript

10m 41s

There are many factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward looking statements. Further discussion of the company's risk factors and other important information regarding our forward looking statements are part of our recent filings with the Securities and Exchange Commission including our recently filed earnings release, which has been posted which has also been posted to the Investor Relations section of our corporate site, premisebank.com. We undertake no obligation to update or revise forward looking statements to reflect changed assumptions the occurrence of unanticipated events or changes future operating results over time. In addition, some of the financial measures that we may discuss this morning are non GAAP financial measures. How a non GAAP measure relates to the most comparable GAAP measure will be discussed when the non GAAP measure is used if not readily apparent. I will now turn the call over to our President and Chief Executive Officer, Dennis Semmer.

11m 36s

Thank you, Matt, and thank you to all of you that have joined our conference call this morning.

11m 42s

For the quarter, we saw continued we saw the our performance continue to track. Excuse me. We for the quarter, we saw our performance continuing to track to the levels that we have expected. We have three in place strategies that will drive much higher ROA that I'd like to discuss with you. But before I do that, I wanna highlight our core community bank which I believe is going to be a driver of our growth and results this year. We continue building pipelines of new customers in the current quarter.

12m 13s

Pushing today's pipeline to about three times what it was a year ago. For the first quarter, loans were down a touch because of some delays closing. But in April, as of this morning, our core bank is up $25,000,000 in loans over the quarter end with plenty of pipeline to keep the numbers moving for the rest of the second quarter. Our loan repricings in the first quarter at the core bank were in the mid-seven percent range. And our new deposit accounts opened came in under 2%. All that and our core banks ended with essentially the same operating expense that they had a year ago managing tight and letting our improvements have an outsized impact on the bottom line. The momentum at the core bank is encouraging.

12m 57s

And important when you consider the three in place strategies we have to materially change our results. I'll give you a quick recap of these and some first quarter results realizing them. First is growth in earning assets back to the level that we experienced before we sold the life premium book.

13m 16s

In the second quarter of twenty twenty four, we had about $3,750,000,000 of earning assets. About $350,000,000 higher than where we finished the first quarter of 'twenty five.

13m 28s

Growing earning assets hasn't been a problem for our bank. And as I look through the rest of this year, expect about $100,000,000 of growth from the core bank about $150,000,000 more in warehouse, and about $125,000,000 more from Panacea. None of these strategies need more operating expense. To drive this growth.

13m 52s

And so over the next few quarters, as we reach our target, I expect the spread on this growth to drop straight to pretax and lift the ROA by 20 to 25 basis points over our first quarter numbers. Second is our mortgage division. We need mortgage to add about 20 basis points to our return on compared to last year's contribution of about five basis points. We've slowly and reliably building our mortgage division since we acquired it in 2022. 2022. And I know that that growth sounds insurmountable.

14m 27s

But we closed $800,000,000 of loans in 2024 but had about $1,200,000,000 of momentum as we exited the year.

14m 38s

Our pretax income divided by closed volume in the first quarter of twenty five was 50% higher than all of 'twenty four.

14m 46s

And so we already have the higher volumes and higher profitability to carry us very close to that goal.

14m 53s

But to further support that, to highlight the opportunity here, we continue to recruit and brought on some of the best teams in the country. We added the top producing team in Nashville, Tennessee. That likely will close somewhere between 151 hundred and $75,000,000 per year. And we added a family team in Wilmington, North Carolina All are military veterans and expect that they will close $175 to $200,000,000 per year of monthly FHA VA business. We also added teams in Austin, Texas and some other markets. And collectively, the first quarter's recurring yielded increased production capacity of about $500,000,000 Lastly, we are working and probably most importantly, we are working to simplify and consolidate our core processing contracts into one.

15m 47s

We've built all the proprietary integrations and customer experiences and we did that last year so that it would be core agnostic and allow for the kind of move that we need to make.

15m 57s

Our customer experience, which is unquestionably leading the market, will not change nor will our unique and reliable method for banking the entire country. With proprietary concepts that weed out bad actors and fraudsters. What will change is the bottom line impact. And we think materially. We expect to have this announced in the second quarter of 'twenty five with a clear path to what we think or confident will be at 15 basis to 18 pickup in our ROA. Before I leave this, want to make a comment about the importance of the digital platform and why that core consolidation is so important. Had a question from an investor last night, and I sort of jogged me. It sort of made me think about this and and put this together. Right now, we fund everything that isn't the core bank. With our digital platform. Meaning I'm not stressing my very profitable core community bank with having to stretch to fund national ideas.

16m 59s

The digital platform funds all of Panacea's excess lending. Which I believe will be around $500,000,000 by the end of the year. With that funding and at our digital cost of funds, Panacea will earn the bank around a 1.5% after tax [indiscernible] The digital platform funds mortgage warehouse.

17m 20s

Which will bring in a lot of low cost funds itself. But with its production, I suppose it will need about 200 to $250,000,000 throughout the rest of twenty five. At the digital cost of funds.

17m 33s

Warehouse will earn the bank over a 2% return on assets.

17m 38s

Collectively, this is an exceptional idea for growth and profitability. It augments and supports the community bank. And severely tamps down the idea that we have to win every single loan and every single deposit in the marketplace in our core bank. Over time, that pressure in a community bank leads to poor credit decisions and higher cost of deposits. The only problem with realizing this dream scenario on almost $1,000,000,000 of balance sheet. Is the cost to run the digital core. Is pretty high. Our trailblazing idea was supported by something back then that the course couldn't do. But over time, the course have modernized now accept outside APIs and integrations. And once we've resolved the higher cost of these two cores, this safe and balanced strategy is going to be exceptionally profitable. For the bank. My last general comment about all this is about Panacea and our efforts to deconsolidate. We have made some of the change. We made what we think are most of the changes near the end of the first quarter to lessen our control over the parent company and believe we may be close to being able to illustrate a real case for deconsolidation.

18m 51s

Given that the gain is large and the accounting is complex, we are working closely with our consultants and with CRO to note for sure if the changes are adequate. Consolidating Pantasy in the first quarter reduced our operating ROA by 10 basis points. Simply from reporting our share of the non tax affected operating loss in our results. So consolidating this would have an additional impact improvement in our results. I'd to comment quickly about the consumer book that's driven all of volatility in our results and really covered up a lot of the progress and improvements we've made in the company. We moved the portfolio back to our held for investment [indiscernible] As the prospects to sell the portfolio faded.

19m 37s

Virtually all of the volatility and risk in this portfolio centered around the loans with promotional features that have declined from $90,000,000 at June thirty of 'twenty four to only $17,000,000 at the end of the most recent quarter. The standard portfolio has good consumer performance and the remaining portfolio of promotional loans are reserved at 75% of the principal balance that we expect to roll to amortization.

20m 8s

We evaluated this book aggressively in the quarter we moved it to held for investment. In our CECL model and we booked an additional provision related to that amount.

20m 17s

But going forward, we believe we've neutralized the noise and volatility here and are focused on earning back the hits we took on this as fast as possible. With that, Matt, I will turn it over to you. Thank you, Dennis. As a reminder, a detailed discussion of our financial results can be found in our press release, on our website and in our eight ks filed with the SEC. As Dennis mentioned, as in prior periods, the financial results for Panacea Holdings are in included in our consolidated earnings. When you exclude the consolidated pretax loss from Panacea Holdings, we reported pretax net income of $4,500,000 in the first quarter. We also had a little over $1,000,000 of one time items largely related to accounting expense and $1,900,000 of additional credit expense as we move the consumer portfolio back to held for investment. Adjusting for these items, pre tax net income was $7,500,000 or $5,900,000 after tax, which equates to a 66 basis point ROA in the first quarter. As we previously discussed, we expected ROA in Q1 to be lower due to the balance sheet shrinkage from the sale of the Life Premium Finance portfolio in the fall, which caused earning assets to be 10% lower than the third quarter of last year prior to the sale.

21m 34s

The first quarter also exhibits seasonal slowness in mortgage and mortgage warehouse. As Dennis discussed, our focus has been making sure we on the strategies that drive ROA higher from here we're doing. Net interest margin in the first quarter was 3.15% up from the reported two ninety basis points last quarter. We ratcheted down deposit costs exiting last year, particularly on the digital platform, benefiting the margin. Core bank cost of deposits remained very attractive at 183 basis points. We are still booking new loans with yields well over 7%, we have a substantial amount of loans repricing later this year well below that level that will continue to help the margin. Non interest income was $7,800,000 in the quarter versus $8,500,000 in the fourth quarter when excluding the Life Premium Finance gain. Increased mortgage revenue was offset by a negative swing linked quarter of $1,200,000 in fee income related to the consumer program that we are running off. A substantial driver of that swing was the continued write down of the derivative asset related to loans exiting promotional periods. The derivative value was down to $1,600,000 at March 31 and will amortize off at a much slower rate over the next five quarters.

22m 52s

On the expense side, when you exclude mortgage volatility and non items, our core expenses were 20,300,000.0 down $3,200,000 from the fourth quarter and more in line with prior periods. Have continued to prioritize holding the line on expenses to position ourselves for substantial operating leverage going forward. The technology saves Dennis discussed have the potential to reduce that run rate and additional 9%. Not including the efficiencies in other areas that come with simplifying our infrastructure. Looking forward, our focus is on executing the plan we have laid out. Growing earning assets back to $3,750,000,000 would add 24 basis points to the ROA. Achieving the growth in mortgage volumes and profitability expansion that's right in front of us would add 15 basis points and reducing our technology spend would add another 15 basis points. Collectively, that puts us on track to exceed the 1% ROA goal we've set out for ourselves. With that, operator, we can now open the line for questions.

23m 53s

Thank you very much. Today, remember to hit star plus by plus the number one on telephone keypad.

24m 3s

Our first question for today comes from the line of Christopher Marinac with Janney Montgomery and Scott. Your line is live.

24m 12s

Hey, thanks. Good morning.

24m 14s

Dennis and Matt, I wanted to ask about any wrenches that you see in the second quarter for not being able to get back to this higher profit profitability? I know there's some progress, and it's going be several quarters in the making. But just looking specifically at kind of transition to better numbers in Q2, is there anything that you see that could throw you off another quarter?

24m 38s

I mean, we are up over average balances over the first quarter where we are right now. We're up about $60,000,000 in earning assets. So I think the track towards having upside on the margin, I think we're tracking well there. We're about to come into the season where I expect mortgage warehouse to be up a little just seasonally. The core banks closing loans that have been in the pipeline and doing well there. So I I see that. We were taking on average, I mean in March, we took about $160,000,000 of applications. In the mortgage group, we closed about 65% of those. That is that's up 45% over January and February. So up pretty tremendously. This month, I mean, we've got today left to go, but it looks like this month, we're gonna beat that number. So I think the mortgage number is gonna come in strong.

25m 48s

On track with what we're looking for. And on operating expense, there really is nothing on the there's there's really nothing around here that's pressuring operating expense. To move higher.

26m 5s

We're not going to have the professional fees on a go forward basis. I mean, a lot of the professional fees we had in first quarter were just to you know, our auditor didn't get the job and start working until October. October. I mean, that's probably, you know, easy three, four months. They had to do a couple queues. To get through the year. And just accelerating that. That's not going to continue. So I know those costs are coming out. I do believe we're gonna be able to deconsolidate Tennessee, and we may have to make a couple more tweaks. You know, working with our auditors and with with the consultants. But I feel like we've done the vast majority of that. So that savings is gonna come as well as hopefully the pretty material pickup in book value. So Yeah. I mean, I I agree with everything Dennis said. I mean, Chris, our our key I mean, mortgage is kinda baked in the cake at this point. We're going into the busy season. They've recruited a tremendous couple of teams here, recently in addition to the recruiting from late last year. So I mean, we're very confident in mortgage volumes even in this rate environment.

27m 22s

Mortgage warehouse was up 80% in the quarter, but a lot of that growth and balances came at the end of the quarter. So you didn't really see it in the average balance and net interest income in the first quarter because of seasonality. But there going to be up substantially on an average basis in the second quarter by a healthy bit. And they're getting good yields with fees, on their business. And the core bank is showing good momentum. Again, were kind of flattish in the first quarter, but that's just because January and February is always so slow. But they had healthy, closings in March, and that's even with some of that being pushed into April. So as Dennis said, we're already up, for the month of April relative to to March. So all the momentum is there. It's our whole story. Is getting to the back half of '25 And holding the line on expenses, which we feel confident in and rebuilding earning assets. As you know, that those earning assets compound, we've got to get stuff booked and on the balance sheet here to replace what we sold late last year. But we're we're in progress on that.

28m 44s

That's super. Thank you both for the background on all those fronts. And then just wanted to ask about the consumer loans. Is there sort of resolution on those and payoff is a chunk of that going to happen in the next three or four quarters just would you just remind us on kind of the time frame that those will get worked out? The payoff rate in the first quarter on the standard book, which is you know, the the promo loans definitely will will more than half of those are scheduled to pay off before promo period ends.

29m 20s

Given what's remaining. And then the rest are sort of resolved with the pretty substantial reserves we have. So I think the promo book is by the end of the year, think we have the promo book being down to $4.5000000 dollars The remaining book is about $100,000,000 if standard consumer paper. It's low interest rate, low payment The payoff rate on that, Chris, is about 7% per quarter. At least it was in the first quarter. So if you look at that, you probably could realistically believe that 20% to 30% of that would pay off this year, maybe a little more.

30m 1s

So think it's amortizing. Amortizing. Paper. So it's just we're not we're not booking anymore, and it's now just running it down over time. Middle of last year, we had $200,000,000 in this book. I think we'll end this year probably eighteen months later. I think we'll end this year probably somewhere call it, $135,000,000 to $75,000,000 Great. That helps. Thank you very much. I'll step back Thank you for your questions. Our next question is from the line of Russell Gunther with Stephens Incorporated. Your line is live.

30m 51s

Hey. Good morning, guys.

30m 53s

Hey, Russell.

30m 56s

Appreciate all of the color on the average earning asset walk and where new yields and deposits came on this quarter. Could you just give us a sense for how that translates to the margin outlook? In 2Q and across the remainder of the year?

31m 13s

Mean, think we'll see, I know, five, 10 basis points of margin expansion in the second quarter And then for by the end of the year, we'll probably be up call it, 10 to 15 basis points, maybe 10 to 20. Depending on what happens with the broader rate environment.

31m 37s

We're the loan repricing that we're having in the core bank are easily hundred basis points higher than where the book is.

31m 46s

Even now with rates sort of settling down on the five to ten year. And one month sulfur, we're still picking up yield on loan repricing. Deposits, you know, I said they were in the just below 2%, probably one ninety ish, one ninety five. The core bank's cost of deposit is 1 and 83 or 184.

32m 6s

Twenty three. 183. So, I mean, really, we're sort of growing the core bank with very I mean, no move in on deposit cost, so pretty strong there.

32m 20s

Mortgage warehouse has a has a margin that's better than our overall margin.

32m 26s

So as that grows, I'd expect you to see some of that sort of fade into the numbers and lift the margin. So I like the numbers Matt is telling you.

32m 36s

That's helpful, guys. I appreciate it. And then a follow-up to the expense conversation you had earlier. If you could just kinda give us a walk through of where we stand at one two and folding in the additional savings, should they materialize, how should we think about an exit core non interest expense base in 4Q assuming Panacea deconsolidation? Yes.

33m 3s

There's a table in the press release that walks through that Gus Russell, that kind of takes out all the different parts, panacea's impact and mortgage impact. Get to that core level. Take a look at that and then let me know if you have follow-up questions. I would say you know, that run rate is should be pretty consistent for the rest of this year. The core consolidation savings is really probable. It's it's possible we would see some late this year depending on the final negotiations on that. But it's more likely something that will affect 2026.

33m 41s

Russell, one thing too. The Matt backed out the panacea you look at the core banks, OpEx is right at $20,000,000 and very consistent with where we were a year ago. I'm, like, showing how hard we've been managing that around here. And that backs out panacea OpEx because when we calculate the the impact of Panacea, we basically get paid for all of those operating expenses, and you might see them sort of meander through non interest income or non expense wherever we allocate that.

34m 17s

But really what matters and mortgage as well, mortgage OpEx really just drives mortgage revenues. So really the number that matters is that $20,000,000 I think it's 20.2 or 20.5 this quarter. That's really the number that matters.

34m 32s

And I will tell you that we you know, we're not having any massive moves around here, but we are trimming back And, you know, anything that's redundant we're looking at that.

34m 44s

We're, you know, consolidating other contracts that maybe are not core related. And savings there. The whole goal again is to hold OpEx flat and let all of the growth, whether it's mortgage, panacea, earning assets, whatever we do, skip OpEx and get a % leverage and scale straight to the bottom line. And I am very confident that we'll we'll do all that. I think if we can finish the year somewhere right around 20, maybe a touch below that I think the I think the quarterly pickup on the on negotiating this core contract consolidation is probably 1,500,000.0 to $2,000,000 a quarter. So it's a like Matt said, 9% is a material material move. And that's really on today's number. So if we could grow the bank back to where we were second quarter, hold the line on OpEx, and then get these savings, I think the the the operating results impact is going to be very, very noticeable.

35m 56s

Okay. So I guess my follow-up and this is I'm trying to get at is so that 20.2 when you're saying expect to finish the year around there, once we fold in the you know, tech and data processing spend, we should expect that to reduce. By the 01/2002, is that 1 and a half to kind of inclusive? Yeah. I'd say 18.5. I'd say 18 to 18 point with everything else that we're working on. We probably we might could get to 18, but 18 and a half I'm very confident we'd get to.

36m 29s

Okay. That's super helpful, guys. That's, what I was trying to get to. And then just switching gears on your outlook for charge offs going forward just given all the actions that have already been taking in consumer that was the bulk of charge off this quarter. How would you expect that ratio to trend over the course of the year?

36m 50s

Think we'll continue to see high charge offs. The key will be we're not expecting to see high provisions related to them. Right? So our core charge offs was I think, five or six basis points when you take out the consumer The portfolio was in runoff It's got a 16% total reserve with discounts against it. There's going to be charge offs against that reserve but the key is have we got enough allowance and discounts against that portfolio to absorb the charge offs as it runs off. We think we do at this point. So pretty confident that we do. I mean, the promo book, like we said, has 75% reserves on what we think will roll to AM. The delinquent book has comparable reserves and then the standard book has reserves that are probably four times three or four times the rest of our consumer, homegrown consumer. Book.

37m 56s

So we think we're appropriately marked. I mean, we're we so we may have the charge off. I think we rolling through those three quarters of promo loans, that's where the charge offs are coming. And we had in the second excuse me, the first quarter, had about $20,000,000 of promo loans. Mature. About 10 of it paid off and 10 of it rolled.

38m 21s

And of that 10, so, again, that 10 is probably marked with 7,500,000.0 [indiscernible] And if we can around numbers.

38m 33s

And so that's what Matt's kinda saying. If we we don't think the the charge offs will be greater than seven and a half, but that's where we're that's where we're marked.

38m 43s

Got it. Okay. Super helpful. And then just last one for me. You guys mentioned you know, a lot of the work has been done around, the panacea deconsolidation So just you know, best guesses in terms of when that should occur from a timing perspective and reminder on what the pickup, in the game could be.

39m 6s

So Dennis mentioned, we made the changes operationally and whatnot technically at the end of the first quarter. But then we have to evaluate whether going through the accounting and GAAP requirements, does that suggest that we no longer need to deconsolidate it If we come to that conclusion, it would actually be effective March 31. So even though we haven't reflected it in our numbers here, we would reflect it we would revise the first quarter to to reflect that. And it would show up in our we we would obviously make that public, but it would show up in our results when we file our 10 q. Which is scheduled for, May 12, I believe. So again, no guarantee that we're gonna come to that conclusion Still a lot of work to be done to sort through that. It's a very complicated analysis. But if we did make that determination, it would be effective at the end of the first quarter. We would elect the fair value treatment for that investment means we would market to fair market value We're carrying it at basically zero. So we would book a substantial gain from writing it up. And that's gonna have to require given the size of it, we need a third party to do that valuation.

40m 40s

Which we're getting in parallel and as, in case we do get that determination or make that determination to deconsolidate. So that we'll be prepared I can't tell you what that valuation is going to be. Though we have indicated publicly that the value of those shares at the time of the Pantheon Holdings capital raise at the end of twenty twenty three, was just under 20,000,000 pretax Given all the progress they've made since then, we've would like to think that it would be worth more than the valuation of that capital raise, but that's all subject to a third party valuation. Understood. Okay, guys. That's a lot of help. I appreciate it. That's it for me.

41m 32s

Thank you for your questions. Ladies and gentlemen, will conclude our Q and A session for today. Dennis, I'd like to hand it back over to you for any closing comments. Okay. Thank you again for joining the call and your interest. If you have any questions or comments, Matt and are available, give us a ring. Thank you. Have a great day. Thank you.

Key Insights

FRST reported a first quarter pretax net income of $4.5 million, or $7.5 million ($5.9 million after tax) when adjusting for one-time and credit expenses, equating to a 66 basis point ROA; management expects to exceed a 1% ROA as strategies are executed.
Earning assets are targeted to grow back to $3.75 billion, with $100 million from the core bank, $150 million from warehouse, and $125 million from Panacea; this growth is expected to add 24 basis points to ROA.
The mortgage division is expected to contribute an additional 15-20 basis points to ROA, with strong momentum from new team hires and increased production capacity; mortgage warehouse balances and yields are also expected to rise in Q2.
Core operating expenses are being tightly managed, with a run rate around $20 million and potential for further reduction to $18.5 million through technology and contract consolidation, targeting a 9% decrease in expense run rate.
Panacea deconsolidation could result in a substantial gain (previously valued at just under $20 million pretax), with a decision and potential impact effective as of March 31; consumer loan runoff continues, with high charge-offs expected but adequately reserved, and the promotional loan book projected to decline to $4.5 million by year-end.

Recent Transcripts

Company targets >1% ROA through asset growth, mortgage expansion, and tech cost cuts.

Premise Financial exits consumer loan portfolio, positions for cleaner earnings and margin expansion in 2025.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$100M	$104M	$126M	$144M	$108M
Cost of Revenue	$8M	$9.6M	$10M	$8.2M	$0
Gross Profit	$92M	$94M	$115M	$136M	$108M
Gross Profit %	92%	91%	92%	94%	100%
R&D Expenses	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Revenue

$100M

$104M

$126M

$144M

$108M

Cost of Revenue

$8M

$9.6M

$10M

$8.2M

Gross Profit

$92M

$94M

$115M

$136M

$108M

Gross Profit %

92%

91%

92%

94%

100%

R&D Expenses

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$23M	$31M	$18M	-$10M	-$25M
Dep. & Amort.	$8.2M	$8M	$7.4M	$9.1M	$9M
Def. Tax	-$1.6M	$6.1M	-$2.2M	-$3.7M	$0
Stock Comp.	$1.5M	$747K	$395K	$712K	$940K
Chg. in WC	-$6.1M	-$8.2M	-$2.1M	-$577K	$0

2020

2021

2022

2023

2024

Net Income

$23M

$31M

$18M

-$10M

-$25M

Dep. & Amort.

$8.2M

$8M

$7.4M

$9.1M

$9M

Def. Tax

-$1.6M

$6.1M

-$2.2M

-$3.7M

Stock Comp.

$1.5M

$747K

$395K

$712K

$940K

Chg. in WC

-$6.1M

-$8.2M

-$2.1M

-$577K

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$196M	$530M	$78M	$78M	$65M
ST Investments	$153M	$271M	$236M	$228M	$179M
Cash & ST Inv.	$349M	$801M	$314M	$230M	$244M
Receivables	$20M	$12M	$0	$0	$0
Inventory	-$219M	-$543M	$0	$0	$0

2020

2021

2022

2023

2024

Cash

$196M

$530M

$78M

$65M

ST Investments

$153M

$271M

$236M

$228M

$179M

Cash & ST Inv.

$349M

$801M

$314M

$230M

$244M

Receivables

$20M

$12M

Inventory

-$219M

-$543M

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $232M
IPO Date: 11/1/06
CEO: Mr. Dennis J. Zember Jr.
Fulltime Employees: 592
Sector: Financial Services
Industry: Banks - Regional
Country: US
Exchange: NASDAQ Global Market

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ISTR

0.98%

First Business Financial Services, Inc.

$49.65

FBIZ

0.55%

Old Point Financial Corporation

C&F Financial Corporation

$67.62

CFFI

1.29%

Southern California Bancorp

$15.26

BCAL

1.73%

Lake Shore Bancorp, Inc.

Watchlist

Earnings

Report Date

Apr 29, 2025

Reported Revenue

55.5M

Beat +97%

Avg 1d Change

3.65%

Report Period

Q1 2025

Reported EPS

0.14

Miss -44%

Implied Move 1d

19.59%

Transcript

10m 41s

11m 36s

Thank you, Matt, and thank you to all of you that have joined our conference call this morning.

11m 42s

12m 13s

12m 57s

13m 16s

In the second quarter of twenty twenty four, we had about $3,750,000,000 of earning assets. About $350,000,000 higher than where we finished the first quarter of 'twenty five.

13m 28s

13m 52s

14m 27s

But we closed $800,000,000 of loans in 2024 but had about $1,200,000,000 of momentum as we exited the year.

14m 38s

Our pretax income divided by closed volume in the first quarter of twenty five was 50% higher than all of 'twenty four.

14m 46s

And so we already have the higher volumes and higher profitability to carry us very close to that goal.

14m 53s

15m 47s

We've built all the proprietary integrations and customer experiences and we did that last year so that it would be core agnostic and allow for the kind of move that we need to make.

15m 57s

16m 59s

17m 20s

Which will bring in a lot of low cost funds itself. But with its production, I suppose it will need about 200 to $250,000,000 throughout the rest of twenty five. At the digital cost of funds.

17m 33s

Warehouse will earn the bank over a 2% return on assets.

17m 38s

18m 51s

19m 37s

20m 8s

We evaluated this book aggressively in the quarter we moved it to held for investment. In our CECL model and we booked an additional provision related to that amount.

20m 17s

21m 34s

22m 52s

23m 53s

Thank you very much. Today, remember to hit star plus by plus the number one on telephone keypad.

24m 3s

Our first question for today comes from the line of Christopher Marinac with Janney Montgomery and Scott. Your line is live.

24m 12s

Hey, thanks. Good morning.

24m 14s

24m 38s

25m 48s

On track with what we're looking for. And on operating expense, there really is nothing on the there's there's really nothing around here that's pressuring operating expense. To move higher.

26m 5s

27m 22s

28m 44s

29m 20s

30m 1s

30m 51s

Hey. Good morning, guys.

30m 53s

Hey, Russell.

30m 56s

31m 13s

31m 37s

We're the loan repricing that we're having in the core bank are easily hundred basis points higher than where the book is.

31m 46s

32m 6s

Twenty three. 183. So, I mean, really, we're sort of growing the core bank with very I mean, no move in on deposit cost, so pretty strong there.

32m 20s

Mortgage warehouse has a has a margin that's better than our overall margin.

32m 26s

So as that grows, I'd expect you to see some of that sort of fade into the numbers and lift the margin. So I like the numbers Matt is telling you.

32m 36s

33m 3s

33m 41s

34m 17s

34m 32s

And I will tell you that we you know, we're not having any massive moves around here, but we are trimming back And, you know, anything that's redundant we're looking at that.

34m 44s

35m 56s

36m 29s

36m 50s

37m 56s

38m 21s

And of that 10, so, again, that 10 is probably marked with 7,500,000.0 [indiscernible] And if we can around numbers.

38m 33s

And so that's what Matt's kinda saying. If we we don't think the the charge offs will be greater than seven and a half, but that's where we're that's where we're marked.

38m 43s

39m 6s

40m 40s

41m 32s

Key Insights

FRST reported a first quarter pretax net income of $4.5 million, or $7.5 million ($5.9 million after tax) when adjusting for one-time and credit expenses, equating to a 66 basis point ROA; management expects to exceed a 1% ROA as strategies are executed.
Earning assets are targeted to grow back to $3.75 billion, with $100 million from the core bank, $150 million from warehouse, and $125 million from Panacea; this growth is expected to add 24 basis points to ROA.
The mortgage division is expected to contribute an additional 15-20 basis points to ROA, with strong momentum from new team hires and increased production capacity; mortgage warehouse balances and yields are also expected to rise in Q2.
Core operating expenses are being tightly managed, with a run rate around $20 million and potential for further reduction to $18.5 million through technology and contract consolidation, targeting a 9% decrease in expense run rate.
Panacea deconsolidation could result in a substantial gain (previously valued at just under $20 million pretax), with a decision and potential impact effective as of March 31; consumer loan runoff continues, with high charge-offs expected but adequately reserved, and the promotional loan book projected to decline to $4.5 million by year-end.

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