Declares Quarterly Cash Dividend of $0.10 Per Share

MCLEAN, Va., Oct. 22, 2026 /PRNewswire/ -- Primis Financial Corp. (NASDAQ: FRST) ("Primis" or the "Company"), and its wholly-owned subsidiary, Primis Bank (the "Bank"), today reported net income available to common shareholders of $8.7 million, or $0.35 per diluted share, for the three months ended September 30, 2026, compared to net income available to common shareholders of $6.8 million, or $0.28 per diluted share, for the three months ended September 30, 2025.  For the nine months ended September 30, 2026, the Company reported net income available to common shareholders of $25.4 million, or $1.03 per diluted share, compared to net income available to common shareholders of $31.9 million, or $1.29 per diluted share, for the nine months ended September 30, 2025.

Operating net income available to common shareholders⁽¹⁾ was $8.7 million, or $0.35 per diluted share, for the three months ended September 30, 2026, up 27% from operating net income available to common shareholders⁽¹⁾ of $6.8 million, or $0.28 per diluted share, for the three months ended September 30, 2025.  Year-to-date results in 2026 and 2025 benefited from investment gains of $5.9 million in the second quarter of 2026 and $32.0 million in the second quarter of 2025.  Excluding these gains and other nonrecurring items, operating net income available to common shareholders⁽¹⁾ for the nine months ended September 30, 2026, was $22.3 million, or $0.90 per diluted share, up 211% from operating net income available to common shareholders⁽¹⁾ of $7.2 million, or $0.29 per diluted share, for the nine months ended September 30, 2025.

Commenting on the results, Dennis J. Zember, Jr., President and Chief Executive Officer of the Company, stated, "The progress we have made over the past year is substantial.  A core margin of 3.59% with expansion of 14 basis points linked-quarter is a testament to the value of our Core Bank franchise which continues to drive slow and steady growth at attractive margins.  Our core earnings engine delivered a solid quarter in the face of unprecedented headwinds that reduced our retail mortgage pipeline 37% and reduced revenue by $2.3 million versus the second quarter. In a steady environment for retail mortgage, we would have been at our 1.00% ROAA target this quarter as expected.   We are already making changes to close the gap during this period of lower volumes while preserving our ability to benefit when volumes eventually recover."

Third Quarter And Year-to-Date 2026 Highlights

The Company demonstrated strong profitability in the third quarter and year-to-date in 2026.  Significant areas of improvement year-over-year are detailed in the chart below:

Division Updates

The third quarter of 2026 demonstrated continued progress across the Company's strategies to meet its growth and profitability goals in 2026. The following discussion highlights recent progress for each of these strategies:

Core Community Bank

The Core Bank's 24 banking offices in Virginia and Maryland represent almost two-thirds of the Company's total balance sheet and are a vital source of attractive lending and core funding.  Recent activity in the Core Bank includes the following:

• The Core Bank has low concentrations of investor CRE (24% of total loans and only 188% of regulatory capital).
• Core Bank loan growth of 11% annualized in the third quarter of 2026 with a pipeline of $160 million as of September 30, 2026.
• Cost of deposits of 1.63% in the third quarter of 2026 compared to 1.73% in the same quarter in 2025. 
• Approximately 21% of the Core Bank's deposits are noninterest bearing.
• Zero brokered deposits.

The Core Bank's deposit base is supported by what management believes is the region's best and most unique technology including the Bank's proprietary and recently rebranded Banking Valet service.  Over 87% of Banking Valet users are commercial customers and clients who actively use the service have average relationship balances of almost $1 million.

Primis Mortgage

Primis Mortgage had closed mortgage volume of $347 million in the third quarter of 2026, up 12.5% compared to the same quarter in 2025, in spite of significant macroeconomic headwinds in the third quarter of 2026.  Construction-to-permanent loan volume was $40.0 million in the third quarter of 2026 versus $26.4 million in the same period in 2025.  Pre-tax losses related to Primis Mortgage were approximately $0.3 million for the third quarter of 2026, down from earnings of $1.9 million in the third quarter of 2025. 

Mortgage Warehouse

Mortgage warehouse lending showed resilience in the third quarter of 2026 in the face of substantial market disruption.  Outstanding loan balances at September 30, 2026 were $501 million, down 8% from $544 million at June 30, 2026 and up 53% from $327 million at September 30, 2025.  Average loan balances were $427 million in the third quarter of 2026, up slightly from $426 million in the second quarter of 2026 and up 103% from $210 million in the third quarter of 2025.  Mortgage warehouse also funded on average approximately 11% of its balance sheet with associated customer noninterest bearing deposit balances during the third quarter of 2026.  

Panacea Financial

Panacea's growth remained strong through the third quarter of 2026 with loans outstanding of $642 million, including loans held for sale, up 17% annualized compared to June 30, 2026.  Panacea sold approximately $32 million of loans in the third quarter of 2026 and had $39 million of loans classified as held for sale at September 30, 2026.  Panacea loans held for investment were $603 million at September 30, 2026, up 14% annualized from $583 million at June 30, 2026.  At the end of the third quarter of 2026, Panacea customer deposits totaled $207 million, up 56% from September 30, 2025.  Panacea remains the number one ranked "Bank for doctors" on Google and serves over 7,500 professionals and practices nationwide.     

Digital Platform

Our highly scalable digital platform continues to provide attractive funding for the Bank's nationwide business lines while protecting the Bank's low cost in-market funding.  The platform ended the third quarter of 2026 with approximately $1.0 billion of deposits with a cost of deposits of 3.80% compared to $1.0 billion at September 30, 2025 with a cost of 4.07%.  The platform also successfully grew business accounts in 2026 with small business balances reaching $54 million at September 30, 2026, up substantially from $16 million at December 31, 2025. These customers remain loyal with approximately 76% of our digital deposits banking with Primis for at least three years.

Net Interest Income

Net interest income in the third quarter of 2026 was $36.3 million, up 25%, from $29.0 million in the third quarter of 2025. Included in interest income in the third quarter of 2026 was approximately $0.7 million of interest recoveries from a previously charged off loan. Adjusting for the recovery, net interest income for the third quarter of 2026 was $35.6 million, up 23% from the prior year period.  Net interest margin was 3.66%, or 3.59% adjusted for the interest recovery, in the third quarter of 2026 compared to 3.18% in the same quarter of 2025 with the expansion driven by robust earning asset growth funded at attractive incremental margins. 

Yield on earnings assets in the third quarter of 2026 increased 22 basis points and 30 basis points versus the second quarter of 2026 and third quarter of 2025, respectively, including approximately 7 basis points due to the interest recovery noted above.  Yield on investments increased 135 basis points year-over-year largely due to the portfolio restructuring in the fourth quarter of 2025. 

Cost of deposits in the Bank have benefitted from the focus on growing noninterest bearing deposit balances as well as the Core Bank's management of interest expense. In the third quarter of 2026, the Company reported cost of interest-bearing deposits of 2.70% compared to 2.88% in the same quarter in 2025. Cost of funds was 2.47% in the third quarter of 2026, down 15 basis points from 2.62% in the third quarter of 2025.

Noninterest Income

Noninterest income was $12.9 million in the third quarter of 2026 versus $22.0 million in the second quarter of 2026 and $12.0 million in the third quarter of 2025. Mortgage related income decreased 10% to $8.0 million in the third quarter of 2026 compared to $8.9 million in the same quarter in 2025. In 2026, the Company restructured its bank-owned life insurance portfolio which improved noninterest income by approximately $0.4 million per quarter beginning late in the second quarter of 2026.  Lastly, the third quarter of 2026 benefited from $0.9 million of recoveries from a previously charged-off loan and $0.4 million in payouts from a bank-owned life insurance policy.

The Company reported gain on sale income of $1.5 million related to the sale of Panacea loans and the guaranteed portion of SBA loans in the third quarter of 2026 compared to $0.2 million in the third quarter of 2025.  Approximately $0.5 million of the gain on sale income was attributable to the Core Bank in the third quarter of 2026 with the remainder driven by the Panacea Division. 

Noninterest Expense

Noninterest expense was $37.2 million for the third quarter of 2026, compared to $32.3 million for the same quarter of 2025. The following table reflects the core operating expense burden at the Company, net of mortgage related and Panacea division impacts.

Core operating expense burden, as defined above, was $24.2 million in the third quarter of 2026 versus $24.9 million and $21.6 million in the second quarter of 2026 and third quarter of 2025, respectively.  As previously disclosed, all three quarters of 2026 include a full quarter of lease expense, net of reduced depreciation expense, of approximately $1.4 million from the Company's sale leaseback transaction executed in the fourth quarter of 2025.  The third quarter of 2026 also included approximately $1.4 million of loan related expenses and approximately $0.4 million of professional fees and other third-party expenses.  Excluding these expenses, core operating expense burden for the third quarter of 2026 would have been essentially flat with the second quarter of 2026 run rate and lower than the same period in 2025 when adjusting for net lease expense. As disclosed in the second quarter of 2026, the Company expects approximately $3.0 million of annualized savings from vendor consolidation and statement services beginning early in 2027.

Loan Portfolio and Asset Quality

Loans held for investment were $3.5 billion at September 30, 2026, flat compared to June 30, 2026 and increased 9% compared to $3.2 billion at September 30, 2025. Primary drivers of these changes include:

• Core Bank loans ended slightly over $2.0 billion at September 30, 2026, up 11% annualized from June 30, 2026. 
• Panacea Financial loans, excluding loans held for sale, grew $20 million, or 3%, from June 30, 2026 to $603 million at September 30, 2026. 
• Mortgage warehouse balances decreased to $501 million at September 30, 2026 compared to $544 million at June 30, 2026. Average loan balances were $427 million in the third quarter of 2026, up slightly from $426 million in the second quarter of 2026.
• Mortgage portfolio loans generated by Primis Mortgage grew to $156 million at September 30, 2026, up 10% from $140 million at June 30, 2026 and up 87% from $84 million at September 30, 2025.
• Loan balances associated with the consumer loan program declined to $69 million at September 30, 2026, net of fair value discounts, compared to $101 million at September 30, 2025. 

Nonperforming assets, excluding portions guaranteed by the SBA, improved to 1.43% of total assets at September 30, 2026 compared to 1.45% at June 30, 2026 and 2.07% at September 30, 2025. The Company continues to make progress reducing nonperforming assets with total nonperforming assets excluding SBA guaranteed balances decreasing to $61 million at September 30, 2026 from $63 million at June 30, 2026, representing a 3% reduction in the third quarter of 2026.

The Company recorded a provision for credit losses of $1.1 million for the third quarter of 2026 compared to a provision for credit losses of $5.5 million for the second quarter of 2026 and a recovery of credit losses of $49 thousand for the third quarter of 2025.  The majority of the provision expense was driven by growth in the loan portfolio in the third quarter of 2026.  Core net charge-offs as a percentage of average loans were 17 basis points, up 14 basis points from the same period a year ago and down 36 basis points from the second quarter of 2026.  The increase in net charge-offs was largely driven by one credit that had previously been reserved for.  As a percentage of loans held for investment, the allowance for credit losses was 1.30% at the end of the third quarter of 2026 compared to 1.40% at the end of the third quarter of 2025.

Deposits and Funding

Total deposits at September 30, 2026 were $3.5 billion, up $0.1 billion, or 4% when compared to the same period in 2025. Noninterest bearing demand deposits were $496 million at September 30, 2026, an increase of 1% compared to balances at September 30, 2025. Average noninterest bearing deposits were $542 million in the third quarter of 2026, up 13% from $482 million in the third quarter of 2025. The Company had FHLB advances totaling $220 million outstanding at September 30, 2026, down from $300 million at June 30, 2026 and up from $85 million at September 30, 2025.  Average FHLB advances were $89 million in the third quarter of 2026, down from $133 million in the second quarter of 2026 and up from $1 million in the third quarter of 2025.

Shareholders' Equity

Tangible book value per common share⁽¹⁾ at the end of the third quarter of 2026 was $13.81, an increase of $2.10, or 18%, from levels reported at September 30, 2025. Tangible common equity⁽¹⁾ ended the third quarter of 2026 at $342.4 million, or 8.14% of tangible assets⁽¹⁾.  

The Board of Directors declared a dividend of $0.10 per share payable on November 20, 2026 to shareholders of record on November 6, 2026.  This is Primis' sixtieth consecutive quarterly dividend. 

About Primis Financial Corp.

As of September 30, 2026, Primis had $4.3 billion in total assets, $3.5 billion in total loans held for investment and $3.5 billion in total deposits. Primis Bank provides a range of financial services to individuals and small- and medium-sized businesses through 24 full-service branches in Virginia and Maryland and provides services to customers through certain online and mobile applications.

Conference Call

The Company's management will host a conference call to discuss its third quarter results on Friday, October 23, 2026 at 10:00 a.m. (ET). A live webcast of the conference call is available at the following website: https://events.q4inc.com/attendee/709063364.  Participants may also call 1-833-461-5787, enter meeting ID 709 063 364 and ask for the Primis Financial Corp. call.  A replay of the teleconference will be available for 7 days using the webcast link above.

Non-GAAP Measures

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables. Primis uses non-GAAP financial measures to analyze its performance. The measures entitled operating net income (loss) available to Primis' common shareholders; pre-tax pre-provision operating earnings; operating return on average assets; pre-tax pre-provision operating return on average assets; operating return on average common equity; operating return on average tangible common equity; operating efficiency ratio; operating earnings per share – basic; operating earnings per share – diluted; core operating expense burden, tangible book value per share; tangible common equity; tangible common equity to tangible assets; and core net interest margin are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. We use the term "operating" to describe a financial measure that excludes income or expense considered to be non-recurring in nature.  Items identified as non-operating are those that, when excluded from a reported financial measure, provide management or the reader with a measure that may be more indicative of forward-looking trends in our business.  A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures is provided when discussing the financial measure or in the Reconciliation of Non-GAAP Items table.

Management believes that these non-GAAP financial measures provide additional useful information about Primis that allows management and investors to evaluate the ongoing operating results, financial strength and performance of Primis and provide meaningful comparison to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider Primis' performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of Primis.  Non-GAAP financial measures are not standardized and, therefore, it may not be possible to compare these measures with other companies that present measures having the same or similar names.

Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and other similar words or expressions of the future or otherwise regarding the outlook for the Company's future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, but are not limited to, our expectations regarding our future operating and financial performance, including the preliminary estimated financial and operating information presented herein, which is subject to adjustment; our outlook and long-term goals for future growth and new offerings and services; our expectations regarding net interest margin; expectations on our growth strategy, expense management, capital management and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations.

Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: instability in global economic conditions and geopolitical matters; the impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within our primary market areas; adverse developments in borrower industries; changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortages and supply chain disruptions; the impact of tariffs, trade policies, and trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services); the Company's ability to implement its various strategic and growth initiatives, including its recently established Panacea Financial Division, digital banking platform, Banking Valet fulfillment service, Mortgage Warehouse division and Primis Mortgage Company, as well as with respect to use and implementation of artificial intelligence; competitive pressures among financial institutions increasing significantly (including as a result of technological changes and the use and continued development of artificial intelligence); changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices; legislative, regulatory or supervisory actions related to so-called "de-banking," including any new prohibitions, requirements or enforcement priorities that could affect customer relationships, compliance obligations, or operational practices; changes in management's plans for the future; credit risk associated with our lending activities; changes in accounting principles, policies, or guidelines; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions; potential impacts of adverse developments in the banking industry, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; potential increases in the provision for credit losses; our ability to identify and address increased cybersecurity risks, including those impacting vendors and other second parties; fraud or misconduct by internal or external actors, which we may not be able to prevent, detect or mitigate; acts of God or of war or other conflicts, civil unrest, acts of terrorism, pandemics or other catastrophic events that may affect general economic conditions; action or inaction by the federal government, including as a result of any prolonged government shutdown; and other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company's management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company's filings with the Securities and Exchange Commission, the Company's Annual Report on Form 10-K for the year ended December 31, 2025, under the captions "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors," and in the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, unless required by law. Readers are cautioned not to place undue reliance on these forward-looking statements.

 

 

 

 

 

 

 

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SOURCE Primis Financial Corp.