Primis Financial Corp.

Simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. I would now like to turn the conference over to Matt Switzer, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining the conference call. Before we begin, please note that many of our comments during this call will be forward-looking statements, which involve risk and uncertainty. 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 also been posted to the investor relations section of our Corpus site, firmnessbank.com. We undertake no obligation to update or revise forward-looking statements to reflect change assumptions the occurrence of unanticipated events, or changes to future operating results over time. In addition, some of the financial measures that we may discuss this morning are non-GAAP financial measures. A reconciliation of the non-GAAP measures to the most comparable GAAP measures can be found in our earnings release. With that, I will now turn the call over to our President and Chief Executive Officer, Dennis Semberg.

Thank you, Matt, and thank you to all of you that have joined our fourth quarter conference call. Before I get into our results for the quarter and the year, I wanted to let the investing public know that our company CIO, Cody Shefflett, passed away suddenly on the afternoon of January 16th. Cody was one of the most visionary CIOs I've had the good fortune of being around. Cody could unquestionably outdream me and Matt, but he had all the engineering and technical skills to make all of it come to life. On top of that, he pastored our company staff with love and humble attention, that drove the unique culture we aspired to build. Fortunately, Cody mentored his staff incessantly for many years to always be prepared. And while I'm confident in the future, our company is reeling from his departure. Now about our results. For the quarter, what I think is important is that these results include a pre-tax loss in mortgage of about $730,000. which obviously is timing related and about $1.4 million lower than where we were in the third quarter. And while I don't want to steal all of Matt's good news, which I've been known to do, in the quarter our margin was up, our expenses were down, NPAs down to very low levels, liquidity and capital strong and getting stronger. Nobody at Premise thinks that we can even see land yet on this journey to top quartile operating ratios. but it's nice to know that we have a lot more wind in our sails. We took advantage of all the chaos in the industry in 2023 and built momentum that can be clearly seen in improving margin, operating expense control that has us close to 2022 levels going into the new year, and impressive growth in core deposits at levels that drive results. Without any noise in the quarter, our margin was up about 10 basis points, resulting from hard management of all the important factors. We controlled deposit costs. We increased loan yields. Our incremental activity was very accretive. There's more information in Matt's details that are shortly coming, but for the quarter, we opened about $75 million in new deposit accounts, costing only 2.69%. And that funded new loan production of $86 million with yields of $838. With this kind of activity, the momentum on margins and net interest income is clearly on our side going into 24, which is critical to continued quarterly improvement in our ratios. Cost controls are equally important, especially in a year when revenue is so pressured. We delivered an impressive second half of 23 with the changes that we made earlier in the year. We've restructured almost every division, consolidated eight branches, and leveraged technology to absorb even more of the jobs and tasks that were previously pushing comp levels. This restructuring mindset continued through the fourth quarter and honestly into today. And while the improvements we are making are smaller individually, they are large enough to offset growth levels and allow more of the anticipated revenue to make it to the bottom line. In 2023, we grew deposits a touch better than 20%. with a substantial amount coming through digital channels. A year later, we still have over 90% of the deposit accounts we opened originally. And with virtually no advertising expense, we continue to open accounts almost solely through referrals from existing customers. We're live with business accounts now and focusing that activity really only on referrals for the time being. But the promise of lower cost deposits on this platform is starting to take shape. Our core bank as well outperformed in 23, with our retail franchise driving substantial deposit activity amidst branch consolidation and major industry headwinds. We've taken Vibe to new levels that we didn't think were possible, and we're starting to see customer referrals for new accounts that need the convenience and the technology we're bringing to the table. Over the last two quarters, we've opened 4,400 new non-CD deposit accounts with approximately 147 million of balances, costing a remarkably low 2.25%. I don't want to convey to anybody that we've cracked this nut or that this effort is on autopilot. Moving deposit balances, even with noticeably better tools and technology, is through sheer force and grit. But the momentum and success that we've had so far builds confidence in our staff, and we're determined to continue this trend. A few other notable and I think important factors for our 2023. Our two national divisions, Panacea and Life Premium Finance, had outstanding years. Panacea was just named the exclusive banking partner of the American Dental Association. shortly thereafter closed its Series B round, rightly establishing an impressive market value for this concept. Our ownership in Panacea is worth about $20 million, which of course at this point is unrealized while that entity is consolidated. We anticipate being able to deconsolidate and recognize this gain in the near future, which would give us substantial flexibility to either ramp up share repurchases or increase our growth rate by a touch across the bank. Life Premium had an amazing year, bringing substantial diversification and quality onto our balance sheet at yields that are substantially better than CRE. On top of that, they've built remarkable technology to drive efficiency and speed, and they operate with one of the lowest expense burdens imaginable. Lastly, despite an expected slowdown Despite the expected slowdown in activity and profitability, our mortgage division finished the year profitable with just $600 million in total production. We have recruited all year without big sign-on bonuses, using culture and great technology to build our stable of producers. Looking at the current month, January 24, our pipeline is up over 25% from a year ago, and so we feel like the revenue opportunity here is much brighter. Turning this over to Matt, I'm pretty excited about what 24 could bring. Our core banks have never been this strong on expense control or management on core deposit growth and loan quality. Our divisions are past the concept stage and in places where they will drive the boost to operating ratios that we expect, and our capital and liquidity levels give us all the flexibility we need to be nimble with uncertain economic and rate conditions. So with that, Matt, turn it to you.