Significant Operating Leverage and Margin Expansion Strategy
Primis highlighted its wide operating leverage, with incremental margins in the mid-4% range, driven by the sale of the life premium portfolio and the addition of the warehouse lending team.
The company emphasized that its digital platform is scalable and targeted, contributing $36 million at a 4.06% rate, supporting low-cost deposits and high-yield lending.
Management stressed that deposit costs have decreased by 32% year-over-year to 2.89%, significantly improving margin and deposit competitiveness.
Adjusted earnings per share were $44.78 with an adjusted ROE of 11.00% and ROA of 1.07%.
Adjusted net income was $607 million, exceeding expectations, driven by better-than-expected net interest income growth, lower credit costs, and expenses at the low end of guidance.
Allowance ratio decreased 1 basis point to 1.18%, with strong reserve coverage and risk management framework.
Deposits grew by $610 million or 0.4% sequentially, led by the Direct Bank and SVB Commercial segments.
Loans declined modestly by $89 million or 0.1% sequentially, with growth in Global Fund Banking and General and Commercial Bank segments offset by declines in tech and healthcare portfolios.
Net charge-offs declined by 8 basis points sequentially and were below guidance, concentrated in general office, investor-dependent, and equipment finance portfolios.
Net interest income increased 2% sequentially, with headline NIM at 3.26% and NIM ex accretion up 2 basis points to 3.14%.
Share repurchases totaled $613 million in the quarter, with a new $4 billion share repurchase plan approved to commence after the current plan.
Ameriprise reported adjusted operating EPS growth of 7% to $9.11 with a strong margin of 27%.
Ameriprise returned 81% of operating earnings to shareholders in the quarter and plans to increase payout ratio to 85% for the second half of the year.
Asset management operating earnings increased 2% to $222 million with margins at 39%.
Free cash flow generation remains strong with a 90% free cash flow conversion rate across segments.
Retirement and Protection Solutions earnings increased 9% to $214 million, driven by favorable life claims and strong interest earnings.
Return on equity remains very strong at 52%, among the industry's best.
The bank's total assets increased 6%, with good loan growth and spread earnings.
Total revenues increased 4% driven by asset growth and strong transactional activity.
Wealth management client assets grew 11% to a record $1.1 trillion, with wrap assets up 15%.
Dafinchi