Primis Financial (NASDAQ:FRST) Announces Earnings Results, Misses Estimates By $0.07 EPS

Key Points

• Primis Financial reported third-quarter EPS of $0.35, missing analysts’ $0.42 estimate by $0.07, while revenue of $49.23 million also fell short of the $50.89 million consensus.
• Core banking trends improved, with net interest margin expanding to 3.66%, earnings rising year over year, and non-performing assets declining to 1.43% of total assets. Capital strength also increased, with the tangible common equity ratio reaching 8.14%.
• Mortgage banking remained a weakness as higher interest rates reduced activity; management expects annual mortgage volume to decline to about $1.1 billion from $1.6 billion if rates stay elevated. The company declared a quarterly dividend of $0.10, equivalent to a 2.6% yield.

Primis Financial (NASDAQ:FRST - Get Free Report) announced its earnings results on Friday. The company reported $0.35 EPS for the quarter, missing analysts' consensus estimates of $0.42 by ($0.07), reports. The firm had revenue of $49.23 million for the quarter, compared to analysts' expectations of $50.89 million. Primis Financial had a net margin of 19.19% and a return on equity of 5.49%.

Here are the key takeaways from Primis Financial's conference call:

• Third-quarter earnings improved year over year to $8.7 million, or $0.35 per diluted share, while operating earnings rose substantially and pre-tax, pre-provision operating income increased 38% from the prior-year period.
• Core banking performance remained strong, with net interest margin expanding to 3.66% and core margin reaching 3.59% excluding a $700,000 interest recovery. Management expects additional, though more moderate, margin expansion from loan repricing and stable deposit costs.
• Mortgage banking revenue declined as higher rates reduced activity, and management expects annual mortgage volume to fall from roughly $1.6 billion to $1.1 billion if rates remain elevated. The mortgage division lost approximately $200,000 in the quarter, although the company has reduced fixed costs by about $4 million annually.
• Credit quality and capital trends improved, with non-performing assets declining to 1.43% of total assets, tangible book value rising 18% year over year, and the TCE ratio increasing to 8.14%. Management is targeting a TCE ratio above 8.5% through continued earnings growth and disciplined balance-sheet expansion.

Primis Financial Price Performance

FRST stock traded down $0.51 on Friday, reaching $15.43. 17,068 shares of the company's stock were exchanged, compared to its average volume of 173,144. The stock has a fifty day moving average of $15.82 and a 200-day moving average of $15.37. Primis Financial has a twelve month low of $10.04 and a twelve month high of $16.88. The firm has a market cap of $382.66 million, a PE ratio of 7.15 and a beta of 0.73. The company has a quick ratio of 0.96, a current ratio of 1.02 and a debt-to-equity ratio of 0.16.

Primis Financial Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, November 20th. Shareholders of record on Friday, November 6th will be issued a $0.10 dividend. This represents a $0.40 dividend on an annualized basis and a yield of 2.6%. The ex-dividend date of this dividend is Friday, November 6th. Primis Financial's payout ratio is currently 18.52%.

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on FRST shares. Weiss Ratings reaffirmed a "buy (b)" rating on shares of Primis Financial in a research note on Wednesday. Raymond James Financial lowered their price objective on Primis Financial from $19.00 to $18.00 and set a "strong-buy" rating for the company in a research report on Tuesday, October 6th. One analyst has rated the stock with a Strong Buy rating and two have assigned a Buy rating to the company's stock. Based on data from MarketBeat.com, Primis Financial presently has an average rating of "Buy" and a consensus target price of $17.50.

About Primis Financial

Primis Financial Corp. is a bank holding company headquartered in Glen Allen, Virginia. Its principal subsidiary, Primis Bank, provides banking and financial services to individuals, families, businesses and nonprofit organizations.

Primis Bank offers deposit products, residential and commercial real estate loans, consumer lending, business loans, treasury and cash-management services, mortgage banking and online and mobile banking. The bank also provides services designed to support small and middle-market businesses, including commercial lending and payment solutions.

The institution was formerly known as Sonabank and adopted the Primis name as part of a broader rebranding in 2020.

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