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- **Profitability Milestone**: Adjusted ROA of 90 basis points in Q3, on track for 1% by mid-2026 with $13 million+ pretax earnings.
- **Deposit Cost Efficiency**: 16% YoY growth in noninterest-bearing deposits reduces cost by 20%, digital bank deposits at 1.37% cost.
- **Division Growth Drivers**: Mortgage warehouse pipeline of $300 million and Panacea's $150 million+ annual production support 10-12% loan growth.
- **Sticky Customer Base**: Digital bank retention >90% despite rate cuts, core deposits funded at 173 basis points.
- **Credit Stability**: Nonaccruals at manageable levels with improving real estate NOI and private equity-backed loan LTV of 35%.


**【CEO Summary】**
- **Q3 Financial Highlights**: Reported $6.8 million net earnings ($0.28 per share), up from $2 million ($0.08) in Q3 2024. ROA improved to 70 basis points (90 basis points adjusted for non-core items), nearing the 1% target.
- **Core Margin Growth**: Core margin expanded to 3.15% (3.12% in Q2), with $1.6 million quarterly pretax benefit from replacing sold loans at 200+ basis points higher yields.
- **Deposit Strategy Success**: Noninterest-bearing deposits grew 16% YoY, reducing cost of deposits by 20%. Digital bank deposits ended at $132 million (50% YoY growth) with 90%+ retention despite rate cuts.
- **Division Performance**: Mortgage warehouse loans averaged $210 million (ending at $327 million), with $1.6 million pretax earnings. Panacea loans grew to $530 million average, funded at 1.37% cost of deposits.
- **Credit Quality**: Stable with $7.5 million private equity-backed loan and $26 million construction/permanent loans in pipeline. Nonaccruals remain manageable with improving NOI on real estate assets.

**【CFO Financial Commentary】**
- **Net Interest Margin**: 3.18% (3.23% adjusted for reversals), driven by 7.16% new loan yields and 2.51% deposit costs. Expect further margin expansion from repricing and balance sheet growth.
- **Revenue Growth**: Noninterest income rose to $12 million (up $1.4 million YoY), led by mortgage division ($1.9 million pretax vs. $0.1 million in Q2).
- **Expense Management**: Core expenses held at $21.6 million (flat YoY), with $1.8 million one-time items. Targeting further OpEx reduction despite inflation.
- **Profitability Outlook**: Adjusted pretax earnings of $11 million in Q3, targeting $13 million+ to reach 1% ROA. $1 billion+ mortgage warehouse pipeline and Panacea's 2026 growth potential support expansion.

**【Q&A Highlights】**
- **Loan Growth Projections**: 10-12% YoY loan growth in 2026, driven by mortgage warehouse ($300M pipeline) and Panacea ($150M+ annual production). Core bank targeting 7-8% growth.
- **Deposit Mix Strategy**: Aiming for 20% noninterest-bearing deposits across the institution, using digital bank's 35% rate cuts to drive 10%+ checking account growth.
- **Margin Targets**: 3.30% net interest margin achievable by Q1 2026, with 1% ROA within 18 months. Digital bank deposits provide 200+ basis points spread advantage.
- **Customer Retention**: Digital bank customers have $50k+ average deposits and 2-year+ tenure, with 90%+ retention despite rate cuts. Relationship banking model neutralizes rate sensitivity.
- **Credit Resolution**: C&I loan may resolve in Q4, while real estate assets expect 1x debt coverage by mid-2026. Minimal loss exposure on $7.5M private equity-backed loan.
- **Expense Trends**: Core expenses to remain flat, with technology savings offsetting inflation. Mortgage and Panacea divisions' scale will reduce expense ratio to 27%+.


Primis Financial Corp. (FRST) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FRST

FRST fundamentals

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