Primis Financial Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
January 29, 2025
Skip to Participants
Operator

Good morning. My name is Adra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Premise Financial Corp. 4th Quarter Earnings Call. Today's conference is being recorded.

Operator

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. At this time, I'd like to turn the conference over to Matthew Switzer, Chief Financial Officer. Please go ahead.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Good morning and thank you for joining us for Premise Financial Corp's 2024 Q4 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. For further discussion of the company's risk factors and other important information regarding our forward looking statements

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

are part

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

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 changed 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 measures used have not readily apparent. I will now turn the call over to our President and Chief Executive Officer, Dennis Seber.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Thank you, Matt, and thank you to all of you that have joined our Q4 conference call.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

First

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

off, let's start with a discussion about why we moved this portfolio into held for sale and what the impact of that decision was financially. Moving this portfolio into held for sale allowed us to market significantly enough that we can mostly neutralize the credit costs and position it to be moved off the balance sheet. We are serious about moving on a host of strategic options like we said in the press release that would realize the market value of our company and no real strategic option is available to us until this book is in held for sale and or sold. I believe having it marked like this lets our company focus on all of the strategies that we've outlined and even more to succeed. Had we orchestrated this exit alongside the deconsolidation of Panacea, we would have improved tangible book value and our company's strategic future.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

And I really wish we could have orchestrated that in just one quarter. But the fact is we can only do half of that this quarter and we're working on the other half right now for that we believe we can handle in the first half of twenty twenty five. So the decision here was either to slog through a couple more quarters with lower earnings or just take the hit, position us to shed this book as soon as we can and push the kind of operating ratios that we believe would be noticeable. In the end, I believe we made the right decision so that 25% could be cleaner. I obviously see real value in our company that has not been recognized, partially because we haven't been selling as hard with last year's delayed filings and some because of the noise of this consumer book.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I want to go over some of the values some of these hidden values real quick. At December 31, 2024, our core bank had $2,100,000,000 of core deposits with a cost of deposits of only $187,000,000 at year end. That's 25 basis points to 50 basis points lower than some of our larger $25,000,000,000 peers and it's easily 100 basis points lower or more than our comparably sized community bank competition. Better yet, our core bank has very enviable levels of CRE and we have very reliable credit quality. Over the last 5 years, we've grown core deposits slowly but surely, but we've only focused on core relationships and the result is this significant pricing advantage.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

The digital strategy of course has higher rates, but if my community bank had a cost of fund had a cost if my community bank has a cost of deposit that's 100 basis points lower than my competition, you have to attribute some of that to a digital strategy that let us be this laser focused in the bank. We've achieved all of this while consolidating our branch footprint from 42 to only 24 branches, rolling most of those customers into VIBE and achieving a 95% retention rate through all the consolidation. Even better on the lending side, we ended the year with a pipeline that was twice as large as the prior year and over 80% of that volume is coming from new customers to the bank. I don't mean new money to existing customers, I mean brand new customers that have never banked with us. Our model in the bank is profitable and clean and positioned in very good markets.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

On the digital side, we have a remarkable offering with 1 of the nation's only full digital fully digital full service checking accounts that's grown to about 18,000 customers. But if we can't drive the results, the margins, the operating ratio improvement then really it's not valuable. Last year our Life premium book yielded 6.47 dollars and our digital deposits cost $507,000,000 So we only had 140 basis points of margin. I mean both of these are very efficient platforms, but collectively that just didn't provide a meaningful bottom line. If you fast forward to right now, we've reduced the rate on those deposits by 75 basis points and we've moved higher on the asset side by about 200 basis points with Mortgage Warehouse.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Essentially, we are positioned to push margins in the 325 to 350 range on this national strategy with efficient platforms and safe short term asset strategies. The fact is this isn't fully at scale yet, but as we build the book on warehouse and construction perm, we will see progress and the results in 2025. Our mortgage division has been consistently growing production 30% to 40% when you compare any month to the prior year. Assuming no scenario where rates fall and volumes move higher, our mortgage company will still produce results that impact our ROA by 10 to 15 basis points. We've built this slowly over the last few years moving from $250,000,000 of production to over 1,000,000,000 dollars We could absolutely step on the gas year with recruiting, but we are cautious and stingy with signing bonuses and instead working organic strategies like the National Construction Perm offering.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Lastly, Panacea, our division focused on doctors, vets and dentists. This division grew to just under $435,000,000 in total loans and impressively reached almost $100,000,000 in low cost funding. These growth rates are around 30% to 40% and are only accelerating as we move into the end of the year where we believe we have a chance to reach 10,000 clients. The banking division is very profitable with an ROA that's accretive to the bank's overall ROA and the parent company PFH where we have significant unrealized value continues to innovate solutions for doctors that have high adoption rates and make them customers for life. There are $100,000,000,000 banks in our country with fewer doctor clients than we have and I dare say there isn't a bank in the U.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

S. With more innovative ways to capture the lifetime market value of a doctor client than Premise and Panacea have brought. Matt will discuss in more detail and give you his reconciliation, but I'd leave you with this. Our moves in the 4th quarter neutralized $20,000,000 of credit costs. As of today, we're about $5,500,000 better annualized in net interest income from the combination of lowering deposit costs and selling life premium.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

That number moves to about $17,000,000 annual once warehouse is at scale in $25,000,000 and there's only $1,500,000 more of incremental operating expense to achieve this. Mortgage values are strong and still growing and most importantly, our core bank is our central focus for value and profitability. As I stated in the beginning, we are focused on all of the strategy that would realize the market value in our company. This starts with cutting out the noise and just posting the kind of results that we know the bank can achieve. It feels like a massive knife wound to have to have done this, but limping along trying to outlast it was not a good strategy.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I'd just rather take my licks like we did and find new ways to work even harder to succeed and we are positioned to do that. Matt, with that, I will turn it over to you for your comments.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Thank you, Dennis. As a reminder, a summary of our financial results can be found in our press release and investor presentation, both of which can be found in our 8 ks filed with the SEC. In those materials, you will find a discussion of recent trends and quarter over quarter comparisons. Given the noise from various initiatives this quarter, both offensive and defensive, my remarks this morning are going to focus on interpreting the associated adjustments to articulate the core profitability of the bank, which is closer to $10,000,000 of pretax income versus the loss reported. On a pre tax basis, when you exclude the consolidated pre tax loss from Panacea Holdings, we reported a loss of $17,400,000 The following items are included in this loss related to the consumer program cleanup.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

$20,800,000 of provision for the consumer loan book for the fair value mark and additional provision for the smaller portion that was not moved to held for sale. Dollars 2,500,000 of interest reversal related to charged off consumer loans and $1,250,000 of fraud losses on consumer loans. Without these items, we would have made $7,100,000 pretax. Other items that impacted the quarter or were non recurring in nature that we discussed in the earnings release include the following: a $4,700,000 net gain from the sale of the Life Premium Finance business $1,800,000 approximately of legal and accounting expenses related to restatements and other activities And approximately $2,000,000 of other expense items related to various initiatives or accrual activity that we can't lump into the non recurring item in the press release, but are not that are not expected to continue in subsequent quarters. After the net impact of these items, the bank would have made approximately $6,200,000 pretax in the 4th quarter.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

This level of profitability is still below what we believe run rate will be due to the following drags. The life premium finance portfolio was sold at the end of October and only partially replaced with mortgage warehouse in the quarter. The loss of spread on the life premium finance portfolio was approximately $1,300,000 but is temporary until mortgage warehouse gets to scale later this year. We had approximately $50,000,000 of promotional loans on average in the Q4 where we recorded no income. This cost us at least $1,000,000 of revenue in the Q4.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Half of the remaining promo balances exit the period in the Q1, so this drag will largely be eliminated soon. We lagged adjustments to rates on the digital platform due to a technology change that was planned for November. As a result, we didn't make our first rate adjustment until mid December and another one in mid January. This cost us another $1,000,000 approximately of interest carry in the Q4. Lastly, retail mortgage is seasonally slow in the Q4 and was a drag to pre tax earnings of roughly $500,000 but will begin to flip back to profitability as we move through the Q1 and is projected to be meaningfully more profitable in 2025.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

If you adjust for these drag items, pretax earnings potential is closer to $10,000,000 and before building in any growth or further margin expansion in 2025. These items are not hypothetical as they are based on strategic moves we have already implemented and will be realized in the first half of twenty twenty five. We appreciate it is very hard to parse through all these moving parts, but we believe the decision to tackle the consumer portfolio in the Q4 was the right one and positions the bank to have cleaner earnings and demonstrate the bank's true profit potential as we move through 2025 and our initiatives bear fruit. With that, operator, we can now open the line for questions.

Operator

Thank you. We'll take our first question from Russell Gunther at Stephens.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

Hey, good morning guys.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Good morning Russell.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

Just if we can start on the loan growth outlook, given some of the puts and takes with exit verticals and new entrants. I think the deck also referenced the new construction to perm relationship, unlikely to contribute a lot this year. But maybe just start in terms of the sort of net loan growth outlook you've got baked in for 2025?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Yes, I'll Matt, I'll start and you can fill in the blanks. If you look across the bank, this is across the company. This is probably the 1st year I think that we since I've been here that we're coming in with a pipeline and loan growth potential that's probably mostly bank focused. At the end of the year, I mean like I said on the like we said in the press release and I mentioned our core bank's loan pipeline is double what it was a year ago. So can we grow in the bank?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Absolutely. I think the bank probably this year is somewhere between call it $125,000,000 $175,000,000 so not quite double digits. But the fact is we don't focus real hard on investor CRE. We're mostly just owner occupied CRE and C and I. We're chasing new relationships.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

So not just existing money to or not just new money to existing customers, we're looking for actual new customers that can help grow checking accounts as well. LifeSpring and Finance is gone, so that's not in our number at the end of the year. What we expect is for mortgage warehouse to grow to scale, which we're calling about the same value or values as what we disposed of. So that's probably against where we at the end of the year probably another $300,000,000 I think the opportunity there is much larger than that. The team we brought had more than double that outstanding and tripled that at some point before they sort of cut off funding.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

So there's a lot of scale potential there. But for this year, we're really just modeling replacing Life premium. Panacea is going to grow up and down. Panacea has got some level of opportunity within the capital markets securitizing loans and forward flow agreements. So I think Panacea may grow a little bit in the Q1 and then get to realize some of the potential for what you would see in the secondary market, it might be much more competitive with some of their doctor customers.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

All right, Dennis.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

Thank you. It's really helpful. And then maybe just switching gears to the margin. So, similar question, just given the entries and exits of lending verticals, you talked about 325 to 350 for the margin over time. Maybe just give us a sense for the cadence and where you would expect to exit this year 4Q 'twenty five?

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

I think we should be closer to the upper end of that range, I mean, as we roll off the Liferoom Finance book and it will be spread over the year, but in terms of the buildup to that margin. But we exited the Q4. We had a 3.18 margin if you add back the interest reversal in the Q4. And that was before reduction in rates. The life premium finance book, if you I mean not the life premium finance book, the consumer book on a core basis does have a reasonable yield.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

So that will go away, but that will be replaced by mortgage warehouse, construction perm. I think you might have said we wouldn't see construction perm this year. We fully expect to see some construction perm lending this year and probably a noticeable amount and that comes with good yields on it. And then the continued reduction in deposit rates. So I mean we're expecting margin expansion in the Q1 and then kind of ticking up through the year as all those different business lines build up volume.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Russell, I'd also add, excuse me, I'd also add, I mean, we posted decent margins last year, especially relative to our competition and that was really with call it 30% of our funding being from the national platform. But the fact is our asset strategy there was very thin. So even with those margins, I mean it was a little depressed inside of that with what I would probably call something under 2% on the digital side. And that obviously we've made the move to relieve ourselves of that and think that that's going to come through as well. When Matt and I model net interest income and net interest margin, I mean, we don't have the level of checking account that we want.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

And when we model net interest income, I mean, we come out with still with like Matt said at the top end of that range. Matt's deck last thing. Matt's deck shows that pretty much all of the asset repricing assuming we stay here right now, all of the asset repricing that we have for the year is positive to interest income. So we're not in a place where rates have fallen to a degree that we expect to see interest income shrink. We still have upside potential on most of what's renewed.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

All right guys, great. Thank you both for the help on the puts and takes to the NIM. And then with the consumer exit, what should we be thinking about in terms of core kind of net charge off and provision levels?

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Our core charge offs this quarter was like 5 basis points. So we're not seeing a whole lot of charge off activity outside of the consumer book. So call it 5 to 10 basis points here in the near term. And then provisioning levels should still be relatively modest because if you think of the biggest drivers of balance sheet growth, probably the largest incremental volume is coming from mortgage warehouse and the reserve burden on that business is very, very low. I think we're modeling like 15 basis points, which is arguably still too high.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

So it's but a similar level of reserve coverage as the LifeBroom and Finance book had. So probably maybe $1,000,000 a quarter of provision covered charge offs and covered some incremental growth.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

Got it. Okay, great. Thanks, Matt. And then guys, last one for me, just kind of bigger picture, the release referenced, and you guys in your comments, potential for the panacea deconsolidation and recognizing that gain. I think the release also referenced you think it's more than the last valuation of roughly $20,000,000 So can you are you able to quantify any upside to that estimate today and then just give us a sense for what pro form a tangible book is expected to look like with that recognized?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

wish I could confidently say a number. I can just confidently say that it's not less than what we did last time. I mean, Panacea's growth I mean, the whole strategy there is to develop the products and services and solutions, more than just loans and deposits, but everything that you would possibly need to exhaust and recognize the full financial value of a doctor client for life. And the progress that we have made on that since December of 'twenty three to right now and through the middle of the year is massive. Okay.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

So I know that the value is there. I know the excitement for what they're doing is there. I see the results. Honestly, we probably could have deconsolidated that last year but deconsolidating it means that we really to do that you have to move a lot of the employees who are bank employees into that entity. And I don't know, we didn't want to risk doing that and fall into the banking as a service even though we didn't think it would be, but didn't want any new ones available for that.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

And I don't know, I think we've as time has gone on and PFH has become more substantial, I don't think the risk of Banking as a Service is as real. And so I think we

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

can

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

probably move to 1, just deconsolidate it. That's really all we're talking about. It's not selling down our position. It's not selling out. It's not monetizing it necessarily.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

And we're not saying that, that would never happen, but just deconsolidating it is really all we're talking about. And the safe way to do that is to just sort of transfer some employees and some services into that entity.

Russell Gunther
Managing Director & Equity Research Analyst at Stephens Inc

That's it for me. Thanks for taking all of my questions.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Thanks, Ross.

Operator

We'll move next to Christopher Marinac at Janney Montgomery Scott.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Hey, thanks. Good morning. Can we go back

Christopher Marinac
Director of Research at Janney Montgomery Scott

to the consumer loan sale? And just give me just one more recap about the loss there. Is that more timing based from an accounting standpoint? And is there potential to recoup some of those losses? I just want to go back to the history of these kind of having credit enhancements along the way.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

There's We're not modeling a whole lot of recovery on this, Chris. I mean, the unfortunate fact is, I mean, if you look at the charge offs, the core charge offs that we reported, I mean, there was significant charge offs in the quarter on the book in addition to the charge we took to move it to fair market value. So our intention is to get out of this portfolio as soon as possible, which is part of why we went ahead and moved it to held for sale. So that's unlikely to result in a big recovery on that charge, maybe a small amount, but not something that we're necessarily counting on. While we're going through that process, there will still be some income on the portfolio though.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

So it's not to say that it's sitting there in held for sale earning us 0, but we're not assuming a big portion of that $20,000,000 fair market value adjustment comes back.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Got it. Okay. So at the end of the day, this is more a strategic decision to exit and move on to your other core business lines? Exactly. Yes.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Okay. And then on

Christopher Marinac
Director of Research at Janney Montgomery Scott

the

Christopher Marinac
Director of Research at Janney Montgomery Scott

strategic sort of front, is there anything else on the strategic review that you've done? That was the beginning of the press release last night and I just wanted to verify if there's something else down there or if we've seen the strategic changes and now you're executing on

Christopher Marinac
Director of Research at Janney Montgomery Scott

the core bank from here?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I mean strategically, I mean there are things other things we're doing. I mean we are the operating expense base obviously we are not trying to drive every improvement that we have with just revenue. So we are focused hard on some strategies on the expense sort of efficiency side. One thing that we did not I mean we're not baking in here is, is there a chance or a strategy that would drive lower cost funding onto the digital platform?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I mean we're talking about 3.25 basis points of digital of spread on digital. I mean, if we just grew 10% of our incremental funding with checking account, we'd be closer to 4%. So I mean we're not modeling that but we are not sitting here on our hands either. We do have some strategy to realize some of that. And some of that is I mean I can see some of that but we're not modeling it yet and we're not talking about it strategically.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

On the core bank side, really this is the first time, Chris, that we had enough confidence that the core bank can be meaningful to our results. And so I would tell you that we are recruiting hard for new lenders really in our markets and our regions. There's been some disruption that's probably going to help that. And the telephone is ringing and there's opportunity. So I'd say strategically the opportunity the things that we're already doing are really focused on recruiting at the core bank and getting more checking accounts through the digital platform.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Great. Thanks for that, Dennis. And I guess that leads to my follow-up question on deposits. I mean, what would you say is the mix of deposits a year or 2 from now? Or what would you like it to be in terms of the digital bank versus the core bank?

Christopher Marinac
Director of Research at Janney Montgomery Scott

Just thinking about the $2,000,000,000 and change at the core and the roughly $1,000,000,000 at the digital.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Probably would like to see probably $2,500,000,000 If you're talking 2 years from now probably $2,500,000,000 at the core bank. We're not going to get we're going to stay laser focused on only hardcore relationship. We did the fact that we were able to accomplish this in the core bank, I don't want to give up that and get out there and just and do anything aggressive on the growth side. So I think with commercial relationships and stuff that we're doing with new business, I think we can grow 10% a year for the next couple of years there, probably $2,500,000,000 We don't really need to grow the digital side. Really what we've got to do on the digital side is take it from $1,000,000,000 of what we have now to and just sort of change the mix there as well so that it's kind of 20% lower cost funding and then the rest sort of what we have right now.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

That's really the only thing we're focused on. We're not looking to try to grow, we call it $3,000,000,000 of deposits or really $3,100,000,000 or $3,200,000,000 when you include Panacea in there to $5,000,000,000 or $6,000,000,000 We're really just focused on tweaking the mix and driving all the profitability that comes out of that before we try to get materially bigger.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Got it. And that evolution on the mix has already started with the last quarter, really last two quarters as those costs have come down?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Yes, correct.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Got it. Okay. And then, on Panacea, I know you talked a lot about this already with Russell's questions, but I just wanted to, I guess, ask, A, should the deposits grow at Panacea? And then, B, where do you see Panacea beyond doing some of the deconsolidation moves that Matt talked about? Where do you see that in terms of size and contributor to earnings looking out at year 2?

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I mean, I think the contributor to earnings is going to be more profitable this year than last year. I think as they I mean, we don't want Tyler and I both don't want Premises balance sheet overwhelmed with their business. It's good for us and for them to have alternate sources. So I think we I don't think we're peaking on profitability, but we're probably $1,000,000 or $2,000,000 sort of away from that. I think the chances of growing deposits there are very real.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

When we talk about exhausting the financial value of a lifetime doctor client, a lot of that centers on introducing technology. We're going to have 10,000 doctors, vets and dentists that have never been in a branch have more than have almost approaching 2 services have material checking accounts have several ancillary services. So all of it is technology focused and that technology really it was the second half of this year really mostly 4th quarter kind of thing where some of their new deposit technology hit the doctors' devices and almost immediately started seeing a lift in deposit growth. Canacea is exceptional at selling commercial checking account. The average commercial checking account there is $75,000 They have more they're not just plain checking account.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

They have all the ancillary treasury services. They have bankers servicing them real time, real life. So I mean, I think their deposit pipeline is I mean funding all of their balance sheet with deposits is not possible. But funding a lot more of their deposits right now they're probably like 25 percent that I could see it. I'm sure Tyler is listening.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

I could probably see that move into 30%, 35%, 40% over time, maybe even better than that.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Great. Thanks for all the background, Dennis, and Matt too. I appreciate it.

Christopher Marinac
Director of Research at Janney Montgomery Scott

Very helpful.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

All right.

Matthew Switzer
Matthew Switzer
Executive VP & CFO at Primis Financial

Thanks, Chris.

Operator

And that concludes our Q and A session. I will now turn the conference back over to Dennis Sember for closing remarks.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Thank you everybody that called. Matt and I are available all day today and we'll be at the Janney conference tomorrow. If you have any questions or comments, we're available. All right. Thank you.

Dennis Zember
Dennis Zember
CEO at Primis Financial Corp

Have a good day.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Matthew Switzer
      Matthew Switzer
      Executive VP & CFO
    • Dennis Zember
      Dennis Zember
      CEO
Analysts
Powered by Quartr
Earnings Conference Call
Primis Financial Q4 2024
00:00 / 00:00

Transcript Sections