Primis Financial in McLean, Va., expects its bulked-up mortgage business to break even in the first quarter.
The $3.6 billion-asset company has been aggressively growing Primis Mortgage by hiring lenders. The expansion lowered the company’s pretax net income by $2.7 million in the fourth quarter.
The mortgage division had $27.5 million of loans on Dec. 31. It is now licensed in 39 states and Washington, D.C.
Primis said elevated expenses ended last year and that it expects the business to contribute $4 million to $5 million to net income, along with 10-15 basis points to return on assets in 2023. The business should have $1 billion of originations this year.
The company also provided an update on Panacea, its digital bank targeting physicians and their practices. The division now has banking relationships with more than 3,000 doctor households nationwide.
Total loans at Panacea rose by 23% in the fourth quarter from a quarter earlier, to $248.4 million. About 55% of the loans are commercial, 24% are consumer and 21% are student loan refinances.
Panacea should originate $150 million to $200 million of loans in 2023. Primis also said it plans to sell some of the Panacea-originated loans; it has an agreement in place to sell $10 million of loans this month for a roughly 3-4 point gain.
The plan is to sell $50 million to $100 million of Panacea-originated loans this year.
Panacea’s deposit balances increased by 69% in the fourth quarter from a quarter earlier, to $22.9 million.
Panacea had pretax, pre-provision net income of $750,000 in the fourth quarter.
Primis said Panacea and Primis Mortgage are working together to market mortgages to Panacea’s customers.
The company also noted that its new digital platform has brought in about $29.7 million of deposits since its soft consumer launch in July. Almost half of all deposit accounts are now being opened online, compared with virtually none three years earlier.