Primis Financial Corp Surpasses Q3 Expectations with Strong Net Earnings Growth
Primis Financial Corp, a leading financial institution, has reported impressive third-quarter earnings, exceeding expectations and showcasing the company's resilience in a competitive market. According to Matthew Switzer, Chief Financial Officer, Primis Financial Corp achieved $8.7 million of net earnings for the quarter, representing a significant 28% increase over the same period last year.
The company's strong performance can be attributed to its valuable deposit portfolio and disciplined approach to loan production and repricing. As Switzer noted, "We continue to benefit from a very valuable deposit portfolio with long-term loyal customers, and we pair that with loan production levels, loan production, and loan repricing opportunities that have delivered real results." This strategy has enabled the company to grow annual net interest income by approximately $28 million over the past 12 months.
Notably, Primis Financial Corp's core bank experienced a notable improvement in its net interest margin, rising to about 3.66% in the current quarter compared to 3.18% in the same period last year. This represents a significant 15% increase, underscoring the company's ability to maintain a competitive edge in a market characterized by intense competition.
However, the company faced challenges in its Mortgage Warehouse division due to the steep rise in interest rates. The average 30-year mortgage rate increased from 6.43% at the end of June to 7.28% at the end of September, leading to a decline in revenue and annual volume. In response, Primis Financial Corp has been rightsizing costs, reducing fixed expenses by approximately $4 million annually.
The company's mortgage CEO has recalibrated volumes based on these rate changes, anticipating an annual decrease from about $1.6 billion to around $1.1 billion if higher rates persist. Despite this, Primis Financial Corp remains confident in its Mortgage Warehouse division, citing the restructuring work undertaken by its team as a key factor in their ability to adapt to changing market conditions.
Primis Financial Corp's balance sheet also experienced growth, with loans increasing by 9.3% over the past year and ending the quarter at approximately $3.5 billion. The company expects total balance sheet growth of about 8%-8% for the full year, reflecting a slight decrease in warehouse balances due to market conditions.
Overall, Primis Financial Corp's Q3 performance demonstrates its ability to navigate a challenging market while maintaining a strong financial position. As Dennis Zember, President and Chief Executive Officer, noted, "We're reporting healthy increases in net earnings, which is a testament to our team's hard work and dedication."
