Primis Financial Corp.

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Good morning. And thank you for joining us for Primus Financial Corp's 2024 first quarter webcast and 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 corporate site, premisebank.com. We undertake no obligation to update or revise forward-looking statements to reflect change assumptions, 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. How a non-GAAP measure relates to the most comparable GAAP measure will be discussed when the non-GAAP measure is used, if not readily apparent. I will now turn the call over to our president and chief executive officer, Dennis Ember.

Thank you, Matt. I appreciate that. And I appreciate everyone that's joined our call today. I want to start by just saying that we've plowed a lot of changes through our company over the last year. And I think it's very satisfying to see how all those changes have added up to such material improvement. When I add back the cost of the consulting services that were a unique expense this quarter, I'm showing that we improved pre-tax, pre-provision by about $3.2 million compared to a year ago. That's substantial improvement given how serious the industry's headwinds have been. I want to give a little more color on where this improvement's come from. First, the core bank's results are outstanding. Last year, the bank consolidated 25% of its branch infrastructure and still retained about 95% of those deposits. Our core margin, which excludes the impacts of the third-party portfolio, came in at 3.03%, which is down just a touch from the fourth quarter, but still above the 3% level. Driving these results is our core bank's deposit franchise, which posted a cost of interest bearing deposits of only 2.56% when you separate out the impact of the national deposit franchise. This cost of interest bearing deposits is between 50 and 150 basis points lower than most of our regional peers and it speaks volumes about the quality of our customer base and our franchise. Our sales pipelines are heavily focused on the deposit side, where we're leveraging our advantages with Vibe and other technologies to win meaningful relationships. Secondly, Panacea earned about $1.6 million pre-tax in the quarter, which compares favorably to only $22,000 in the same quarter a year ago. Their growth in loans and deposits over the past year has been remarkable, but especially deposits where they now fund about 30% of their entire balance sheet. Their pipeline on deposit growth is multiples stronger than their pipeline on loans, and it's a direct result of the technology build-out that was made possible by their capital raise. We still have approximately $16 million after-tax of market value intangible book that we have not recognized but expect to be able to as soon as we deconsolidate Panacea Financial Holdings and recognize that improvement in book value. Our mortgage division last year recruited and built technology and secondary capabilities and through all of that they tweaked or continue to tweak their operating expense burden. This allowed mortgage to earn about $850,000 pretax in the first quarter compared to a loss of $250,000 in the same quarter a year ago. That is an excellent result for the first quarter of the year and for this industry in particular right now with 30-year rates at or above 8%. I want to keep recruiting in the division with just hitting singles and doubles to build our capacity and be ready for lower rates and the revenue boom that we expect when rates begin to fall. Lastly, our premium finance division finished the quarter with pre-tax income of about $1.3 million, up from about $850,000 in the same period a year ago. Driving those results are remarkably low operating expense burdens, managing the sector's fastest and most digitally oriented process for the facilitators and customers. This business is 100% cash secured with current production yields that are easily 100 basis points ahead of CRE. I think it says a lot about our company that we emerged through this last year this much stronger. Without question, it's our multifaceted strategy is the reason for our success, where we are not fully dependent on just one region or just one concept to drive results. At the consolidated level, we are not looking to add any more strategies or complexities. We're instead just looking to tweak and improve the slate that we already have and enjoy the better operating results that come from that success. All right, with that, I will turn it back to you, Matt.