Primis Financial Corp. Reports $3.4 Million Net Income for Q2 2024, Significant Recovery from Prior Year

Primis Financial Corp. reported a net income of $3.4 million, or $0.14 per share, for the three months ended June 30, 2024, a significant recovery from a net loss of $2.0 million, or $(0.08) per share, in the same period last year. For the six months ended June 30, 2024, net income available to common shareholders totaled $5.9 million, or $0.24 per share, compared to $6.4 million, or $0.26 per share, for the same period in 2023. The increase in quarterly net income was primarily driven by a $1.5 million rise in net interest income, a $1.9 million increase in noninterest income, and a $0.7 million reduction in noninterest expenses, alongside a $1.2 million decrease in the provision for credit losses.

Total assets as of June 30, 2024, reached $4.0 billion, reflecting a 2.8% increase from $3.9 billion at the end of 2023. The growth in assets was supported by a 2.5% increase in total loans, which rose to $3.3 billion, and a 2.0% increase in total deposits, which amounted to $3.3 billion. Notably, non-time deposits increased by 3.1% to $2.9 billion. The ratio of gross loans to deposits remained stable at 98%. The net interest margin for the second quarter was 2.72%, up from 2.36% in the same quarter of the previous year, although it decreased from 2.84% in the first quarter of 2024.

Strategically, Primis Financial has been focusing on enhancing its mortgage banking operations, which contributed to a $1.2 million increase in mortgage banking income for the quarter. The company also reported a significant rise in income from bank-owned life insurance, which increased by $0.6 million. However, noninterest income for the six months ended June 30, 2024, decreased by 20% to $21.2 million, primarily due to a decline in Consumer Program derivative income, which was affected by fair value loss adjustments.

Operationally, Primis Financial's loan portfolio remains diversified, with a majority of loans secured by real estate. As of June 30, 2024, the company had 24 full-service branches in Virginia and Maryland, and it continues to expand its digital banking services. The allowance for credit losses as a percentage of total loans was 1.56%, slightly down from 1.62% at the end of 2023, indicating stable asset quality. Nonperforming assets increased to $13.2 million, primarily due to an uptick in nonaccrual loans, but the overall credit quality of the portfolio remains stable.

Looking ahead, Primis Financial is positioned to benefit from the current higher interest rate environment, which is expected to support loan growth and partially offset rising deposit costs. The company is also preparing for a strategic sale of its Life Premium Finance division, which is anticipated to yield a pre-tax gain of $4.5 million. Management remains focused on maintaining strong capital ratios and enhancing operational efficiencies to navigate the evolving economic landscape.