Primis Financial Corp. Reports Strong First Quarter 2026 Results: Robust Profitability, Dividend Declaration, and Strategic Progress

Key Financial Highlights and Performance Metrics

• Net Income: Primis Financial Corp. (“Primis”, NASDAQ: FRST) reported net income available to common shareholders of \$7.3 million, or \$0.30 per diluted share, for Q1 2026. This compares to \$22.6 million, or \$0.92 per diluted share, for Q1 2025. The prior period included significant nonrecurring items, which affected comparability.
• Operating Net Income (Non-GAAP): Operating net income available to common shareholders was \$8.1 million, or \$0.33 per diluted share, up 126% from \$3.6 million (\$0.14 per share) in Q1 2025.
• Dividend Declaration: The Board announced a quarterly cash dividend of \$0.10 per share, marking the company’s fifty-eighth consecutive quarterly dividend. The dividend will be payable on May 22, 2026, to shareholders of record on May 8, 2026.
• Return Metrics: Operating Return on Average Assets (ROAA) increased to 0.84% (from 0.40% year-on-year) and Operating Return on Average Tangible Common Equity (ROTCE) rose to 10.19% (from 5.78%).
• Balance Sheet Strength: Total assets grew by 15% year-on-year to \$4.26 billion. Gross loans held for investment (“HFI”) rose by 12% to \$3.4 billion, while total deposits increased by 8% to \$3.42 billion.
• Tangible Book Value: Tangible book value per share reached \$13.47, up 18% from \$11.40 a year earlier.
• Net Interest Income and Margin: Net interest income rose 22% year-on-year to \$32.1 million, with net interest margin improving to 3.43% (up from 3.15%).
• Noninterest Income: \$14 million in Q1 2026, down from \$32 million in Q1 2025. The 2025 figure included a \$25 million one-time gain from Panacea Financial Holdings.
• Noninterest Expense: \$34 million in Q1 2026, essentially flat year-on-year, with core operating expense burden up slightly to \$22 million (from \$21 million), but would have declined if not for a sale-leaseback transaction.

Operational and Strategic Updates

Core Community Banking

• The core bank’s 24 branches in Virginia and Maryland comprise almost two-thirds of the company’s balance sheet, emphasizing a stable deposit base and strong core profitability.
• Low concentration of investor commercial real estate (CRE) loans (25% of total loans).
• Core bank closed \$66 million in loans during Q1, with a pipeline of \$123 million at the end of March 2026.
• Cost of deposits was 1.59% (down from 1.85% a year earlier), and the bank reported zero brokered deposits.
• 23% of the core bank’s deposits are noninterest bearing, supported by proprietary digital technology (V1BE) serving \$200 million of mostly commercial clients and \$60 million in checking accounts.

Primis Mortgage

• Closed mortgage volume skyrocketed 122% year-on-year to \$367 million in Q1 2026.
• Construction-to-permanent loan volume rose to \$26 million (from \$4 million).
• Pre-tax earnings for Primis Mortgage were \$2.1 million, up from \$0.8 million in Q1 2025.

Mortgage Warehouse Lending

• Outstanding balances reached \$460 million, up 300% from \$115 million a year ago.
• Average balances increased 499% year-on-year, and the warehouse was funded on average by 12% noninterest bearing deposits.

Panacea Financial

• Loans outstanding grew 10% sequentially to \$600 million (including loans held for sale).
• Deposits in Panacea Financial’s division increased 63% year-on-year to \$153 million.
• Panacea is recognized as the top-rated “Bank for doctors” on Google and serves over 7,500 professionals and practices nationwide.

Digital Platform

• The digital banking platform funds national strategies and held \$1.0 billion in deposits at Q1 end, with the cost of deposits falling to 3.79% (from 4.36% a year ago).
• Business account balances grew to \$28 million, and over 1,200 accounts were sourced via customer referrals. Notably, 81% of consumer accounts have been with the bank for over two years.

Asset Quality and Credit

• Nonperforming assets (excluding SBA-guaranteed portions) rose to 2.24% of total assets from 2.03% at year-end, mainly due to a single relationship that has since reduced its delinquency.
• Provision for credit losses was \$1.5 million, down from \$2.4 million in Q4 2025 and \$1.6 million in Q1 2025.
• Allowance for credit losses stood at 1.37% of loans held for investment, slightly down from 1.45% a year ago.
• Consumer loan program balances declined to \$82 million, with strong reserves (8% of gross principal, 358% of loans more than one period delinquent).
• Core net charge-offs were 0.06% of average loans, flat year-on-year.

Expense Management and Technology

• Primis is aggressively adopting AI tools and agents across the bank, with over 200 people-hours per week of projected time savings already identified, many in early implementation stages.
• Management believes further efficiency gains are possible while maintaining growth.

Capital and Shareholder Returns

• Tangible book value per share increased by \$2.07 (18%) year-on-year to \$13.47.
• Tangible common equity (TCE) ended the quarter at \$334 million, or 8.02% of tangible assets.
• All key capital ratios remain strong, with the common equity tier 1 ratio at 9.35% and total risk-based capital ratio at 12.21%.

Guidance and Forward-Looking Statements

• Management expects robust profitability for the remainder of 2026, supported by strong operating leverage, asset growth, and higher noninterest income from ongoing restructuring efforts (including bank-owned life insurance portfolio).
• Tax rate is expected to remain steady (21.8%) through 2026.
• Significant expense discipline and further technology-driven productivity enhancements are planned.
• Sale of Panacea’s loans held for sale in early Q2 2026 is anticipated, with ongoing loan flow sales projected to support continued high growth rates without balance sheet strain.

Potentially Price-Sensitive and Shareholder-Relevant Points

• Substantial year-on-year growth in key profitability metrics, tangible book value, and loan/deposit volumes may positively influence investor sentiment.
• Strong performance in mortgage and warehouse lending, as well as digital and specialty banking (Panacea), demonstrates successful execution of strategic initiatives.
• Continued cost control, the roll-out of AI productivity tools, and a high dividend yield (with a long history of consecutive payments) enhance the investment case.
• Rising nonperforming assets (though attributed to a single borrower and reportedly resolved) and large increases in FHLB advances may warrant close investor attention.
• Noninterest income volatility due to large, one-time gains in prior periods should be considered when comparing results.
• Ongoing restructuring of the bank-owned life insurance portfolio is expected to add \$1.2 million in annual noninterest income starting late Q2 2026.
• Management’s forward guidance affirms expectations for continued strong earnings and capital growth through 2026.

Conclusion

Primis Financial Corp. delivered a strong first quarter of 2026, marked by robust operating income growth, higher net interest margin, and a substantial increase in tangible book value per share. The company’s focus on core banking, digital innovation, and specialty verticals like mortgage and Panacea Financial is driving both top-line and bottom-line gains. With a stable dividend, disciplined expense management, and promising forward guidance, Primis appears well-positioned to continue delivering value to shareholders. However, investors should monitor asset quality trends and the sustainability of noninterest income sources as the year progresses.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The information is based on company disclosures and public filings as of the date of publication. Investors should conduct their own research and consult with financial professionals before making investment decisions.

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