Primis Financial Corp.
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
FRST$14.48-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001104659-25-109181
Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001104659-26-057998
Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 112 current paragraphs.
64 unchanged; 25 reworded; 21 added; 46 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 95 previous and 83 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Our growth strategy is focused on driving higher production and profitability in four key areas of the company identified as the core community bank, mortgage warehouse, Panacea financial lending, and PMC. The following highlights key metrics from these four areas during the first quarter of 2026:
Current report
Primis Mortgage Company
Current report
Funding for many of our strategies (all of the above excluding the core community bank) is provided exclusively by the Bank’s digital platform powered by what we believe is one of the safest and most functional deposit accounts in the nation. Because of the scalability of the platform, there is significantly less pressure on the core community bank to provide this funding and risk the profitable, decades old relationships with core customers. The digital platform ended the first quarter of 2026 with approximately $1.0 billion of deposits with a cost of deposits of 3.79%. The digital platform successfully grew business accounts in 2026 with small business balances reaching $28 million as of March 31, 2026, up substantially from $16 million at December 31, 2025. Over 1,200 of our digital accounts have come from referrals from other customers and approximately 81% of our consumer accounts have been with the Bank for over two years.
Current report
The quarter ended March 31, 2026 was strong, earning $7 million, or $0.30 basic and diluted earnings per common share, compared to net income available to common shareholders of $23 million, or $0.92 basic and diluted earnings per common share, for the three months ended March 31, 2025. Net income available to common shareholders included $25 million in one-time gains related to the deconsolidation of PFH during the three months ended March 31, 2025. When excluding the one-time gains, net income available to common shareholders grew $9 million in the first quarter of 2026 when compared to the same quarter last year.
Current report
Provision for Credit Losses
Current report
For both the three months ended March 31, 2026 and 2025, we had a provision for credit losses of $2 million. The provision was flat when comparing the three months ended March 31, 2026 to March 31, 2025 as a result of provision increases in our commercial, commercial owner occupied, and warehouse loan portfolio growth being largely offset by net charge-offs in the consumer loan portfolio. See additional discussion in theAsset Quality section of this MD&A.
Current report
Noninterest income decreased 58% to $14 million for the three months ended March 31, 2026, compared to $32 million for the three months ended March 31, 2025. Noninterest income included a $25 million one-time gain related to the deconsolidation of PFH during the three months ended March 31, 2025. When excluding the one-time gain, noninterest income for the three months ended March 31, 2026 grew $8 million compared to the same period in 2025. The increase was primarily driven by $5 million of higher income from mortgage banking activity during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The 92% increase in mortgage banking income was related to an increase in funded loan volume and subsequent sale of a large amount of these funded loans during the first quarter of 2026 along with a $2 million increase in fair value gains on the portfolio in the first quarter of 2026 compared to the same quarter in 2025.
Current report
Noninterest income also had increases year-over-year as a result of gains on sale of loans of $567 thousand during the three months ended March 31, 2026, primarily related to the sale of the guaranteed portion of SBA loans driven by the Panacea Division. Consumer Program related income increased $688 thousand, driven by positive fair value adjustments on the related derivative in the first quarter of 2026 compared to negative adjustments in the same quarter in 2025. Noninterest income from the Consumer Program is expected to be increasingly immaterial going forward as promotional loans continue to decline. Meanwhile, we anticipate additional gains from loan sales during the remainder of the year generated by the Panacea Division.
Current report
Income from bank-owned life insurance increased $47 thousand for the three months ended March 31, 2026 compared to March 31, 2025. The Company is currently in the process of restructuring its bank-owned life insurance portfolio which is anticipated to improve noninterest income by approximately $1.2 million annually, beginning late in the second quarter of 2026.
Current report
Salaries and benefits expenses increased $2 million during the three months ended March 31, 2026, compared to the same period in 2025. PMC accounted for most of the growth in salaries and benefits due to the significant growth of the business in the last year.
Current report
Occupancy expenses grew $1 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily as a result of increased lease expense related to the sale-leaseback transaction executed in December of 2025.
Current report
Data processing expense decreased $661 thousand during the three months ended March 31, 2026, compared to the same period in 2025 driven by the reduced cost of data processing for our core loan and deposit system as a result of renegotiating our core data processing contract with our vendor in the second half of 2025.
Current report
Professional fees decreased $365 thousand in the first quarter of 2026 compared to the first quarter of 2025 primarily due to legal, accounting, and audit related costs in the current year starting to normalize after the prior year increases that were attributable to specific non-recurring accounting events. Other operating expenses decreased $720 thousand during the three months ended March 31, 2026, compared to the same period in 2025 attributable to continued overall general expense discipline across the company.
Current report
LHFS increased $57 million during the first quarter of 2026 from December 31, 2025 primarily due to the origination for sale during the quarter of $41 million of Panacea Financial division commercial loans and an increase of $16 million in PMC loans. A majority of the Panacea loans were sold to another financial institution a few weeks after March 31, 2026 and the remainder is anticipated to be sold to the same financial institution before June 30, 2026. The increase in PMC loans is a result of overall increase in origination volume during the quarter.
Current report
Over the past two years our Consumer Program loan portfolio comprised a significant amount of loans that had a no-interest promotional period. A majority of these have paid-off or converted to an amortization period and as of March 31, 2026 we only had approximately $800 thousand of principal amount of promotional loans that remain in a promotional period. All of these loans will end their promotional period in the next eight months.
Current report
Nonperforming assets increased $19 million, or 22%, as of March 31, 2026 compared to December 31, 2025, which was driven by an increase in loans past due greater than 90 days and still accruing interest. This increase was driven by one relationship comprised of two commercial loans to a small business located within our core community bank lending footprint. Subsequent to March 31, 2026, multiple payments were made to the loans that resulted in the status of each loan reducing to approximately 40 days past due.
Current report
Our allowance for credit losses was $46 million as of both March 31, 2026 and December 31, 2025. The allowance was flat during the three months as a result of the provision being mostly offset by net charge-offs during the period. Net charge-offs were driven by the Consumer Program portfolio and other consumer loan net charge-offs. The provision during the three months ended March 31, 2026 was driven by increases in growth in the commercial, commercial owner occupied, and warehouse loan portfolio balances, partially offset by a decline in commercial non-owner occupied loan balances.
Current report
Approximately half of our net charge-offs were related to the Consumer Program portfolio during the three months ended March 31, 2026. During the three months ended March 31, 2026, we charged-off $512 thousand net of recoveries, in the Consumer Program portfolio. Comparatively, during the three months ended March 31, 2025, we charged-off $11 million, net of recoveries. This significant improvement in net charge-offs related to the Consumer Program was a result of the reduction of the promotional loans in the portfolio over that time along with enhanced mitigation and collection efforts implemented by us to improve performance of the portfolio. The remaining balance of net charge-offs during the three months ended March 31, 2026 was related primarily to consumer loans in the Panacea division.
Current report
savings and time deposit balances of $59 million, offset by a decline in lower-cost demand and NOW deposit balances of $31 million. Deposits are net of excess amounts we sweep off balance sheet to manage liquidity, but we had no swept deposits as of both March 31, 2026 and December 31, 2025.
Current report
Approximately $1.0 billion of our total deposits at both March 31, 2026 and December 31, 2025 are from our digital banking platform with a substantial portion of these deposits from customers outside of our local branch footprint. As of March 31, 2026, approximately 81% of the customers on the digital platform have been with us for at least two years.
Current report
On January 31, 2026, we repaid $27 million of ourfixed-to-floating rate senior Subordinated Notes due 2027. At the time of repayment, interest was payable at a floating rate equal tothree-month CME Term SOFR plus a tenor spread adjustment of 0.26%. The full benefit to our interest expense and interest margin of repayment is anticipated to be realized beginning in the second quarter of 2026.
Removed paragraphs (46)
Previous report
NON-GAAP
Previous report
In the following discussion and analysis, we provide certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are intended to supplement, not replace, GAAP, which we use to prepare our financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. We use the non-GAAP financial measures discussed herein in our analysis of our performance. Management believes that these non-GAAP financial measures provide additional understanding of our ongoing operations, enhance the comparability of our results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in our underlying performance. Non-GAAP financial measures may be identified with the symbol(+) and may be labeled as adjusted. Refer to the “Non-GAAP Financial Measures” section within this Item 2 for more information about these non-GAAP financial measures, including a reconciliation of these measures to the most directly comparable GAAP financial measures.
Previous report
While Primis Bank offers a wide range of commercial banking services, it focuses on making loans secured primarily by commercial real estate and other types of secured and unsecured commercial loans to small and medium-sized businesses in a number of industries, as well as loans to individuals for a variety of purposes. Primis Bank invests in real estate-related securities, including collateralized mortgage obligations and agency mortgage-backed securities. Primis Bank’s principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings. Primis Bank offers a broad range of deposit products, including checking, savings, money market accounts and certificates of deposit. Primis Bank actively pursues business relationships by utilizing the business contacts of its senior management, other bank officers and its directors, thereby capitalizing on its knowledge of its local market areas.
Previous report
Panacea Financial Division
Previous report
Primis Mortgage
Previous report
Changes in the relationship between PFH and Primis during the first quarter of 2025 resulted in a determination to deconsolidate PFH from Primis as of March 31, 2025. The deconsolidation resulted in recognition of a $25 million gain for Primis during the nine months ended September 30, 2025, as a result of recording the fair value of our retained interest in common stock of PFH. The deconsolidation resulted in us no longer including PFH’s financial results in our financial results after March 31, 2025. PFH continues to work with the Panacea Division of the Bank to originate loans, some of which the Bank will retain, and others will be sold to investors and other financial institutions.
Previous report
On June 12, 2025, we signed a non-binding term sheet to sell a portion of our retained ownership in PFH common shares after the deconsolidation and the sale of the shares generated proceeds of $22 million. Following the sale of these shares, we continued to hold approximately 467 thousand shares in PFH as of September 30, 2025. For the nine months ended September 30, 2025, we recorded a gain of $7 million in the income statement in “Gain on Panacea Financial Holdings investment” within noninterest income related to the sale of PFH common shares and fair value adjustments on our remaining investment.
Previous report
fair value adjustments to the remaining common share investment retained in the second and third quarter of 2025.
Previous report
Nine-Month Comparison Net income available to common shareholders for the nine months ended September 30, 2025 totaled $32 million, or $1.29 basic and diluted earnings per share, compared to $7 million, or $0.29 basic and diluted earnings per share, for the nine months ended September 30, 2024. The results reflect an increase in noninterest income of $32 million, primarily due to a gain on the deconsolidation of PFH in the first quarter of 2025 and gains from the sale of a portion of our remaining investment in PFH common share investment in 2025. A $2 million increase in our net interest income was driven by lower interest expenses in the current year on both deposits and borrowings due to lower average balances and lower interest rates. These increases were partially offset by an increase in noninterest expense of $8 million driven primarily by higher personnel costs due to growth in PMC, Mortgage Warehouse, and the Panacea Division of the Bank and an increase in income tax provisions of $6 million from higher pre-tax earnings. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.
Previous report
Our net interest income and margin were positively impacted during the three months ended September 30, 2025 compared to the same period in 2024 by the Consumer Program loans. During the third quarter, we had lower charge-offs related to these loans, most of which had promotional interest features, which resulted in less reversal of interest income. The Company recognizes interest income on the promotional loans when promotional features expire and which generally includes a substantial amount of deferred interest accumulated to that date. If the loan subsequently defaults, that previously recognized interest is reversed against interest income. The Bank recognized substantial interest income on loans exiting their promotional periods beginning in the third quarter of 2024, with a roughly one quarter lag of subsequent reversals primarily due to high first payment defaults on full deferral promotional loans. The interest recognized on promotional loan expirations was insignificant in the third quarter of 2025, which is expected to lead to substantially lower interest income reversals going forward.
Previous report
Net interest income was $80 million for the nine months ended September 30, 2025, compared to $78 million for the nine months ended September 30, 2024. Net interest income increased as a result of interest-bearing liability costs declining more than the declines in interest-earning asset income. Our net interest margin for the nine months ended September 30, 2024 was 3.06%, compared to 2.85% for the nine months ended September 30, 2024. Margin increased by 21 basis points primarily from higher net interest income on lower average interest-earning assets over those periods. Consumer Program loan income reversals had a significant impact on the nine months ended September 30, 2025 and no impact on the same period in 2024.
Previous report
Provision for (Recovery of)** **Credit Losses
Previous report
For the three months ended September 30, 2025 and 2024, we had a recovery of credit losses of $49 thousand and provision for credit losses of $7 million, respectively. The recovery of credit losses during the three months ended September 30, 2025 was driven by the changing mix of the Bank’s loan portfolio to loan categories with lower reserve requirements and the move of approximately $53 million of commercial loans to held for sale and reversal of the allowance on these loans. Based on performance during the quarter, there was provision expense of $274 thousand associated with the Consumer Program in the third quarter of 2025 compared to $4 million during the three months ended September 30, 2024.
Previous report
For the nine months ended September 30, 2025 and 2024, we had a provision for credit losses of $10 million and $17 million, respectively. Decline in provision for credit losses for the nine months ended September 30, 2025 compared to September 30, 2024 was driven by higher provisions in the 2024 periods primarily related to the Consumer Program loans. Credit losses were concentrated in the promotional portion of that portfolio that were largely originated between the third quarter of 2022 and first quarter of 2023. Due to the majority of these promotional loans ending their promotions in 2024 or the first quarter of 2025, coupled with our loss mitigation efforts in 2025, our provisioning for this portfolio was only $2 million during the nine months ended September 30, 2025, compared to $13 million during the nine months ended September 30, 2024.
Previous report
The decline in provision during the nine months ended September 30, 2025 compared to the same period of 2024 was also driven by the lower provisioning for Consumer Program loans, the change in portfolio mix, and transfer to held for sale of commercial loans in the three months ended September 30, 2025. Partially offsetting the decline in provision during the nine months ended September 30, 2025 was $7 million of provisions on an individually evaluated commercial real estate loan that was placed on nonaccrual during the period, due to certain weaknesses in the credit. See additional discussion of this loan in theAsset Quality section of this MD&A.
Previous report
Noninterest income increased 29% to $12 million for the three months ended September 30, 2025, compared to $9 million for the three months ended September 30, 2024. The increase was primarily driven by $2 million of higher income from mortgage banking activity during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The 31% increase in mortgage banking income was due to higher gain on sale income driven by an increase of $62 million, or 27%, in loan sales during the three months ended September 30, 2025 compared to 2024 as well as higher fair value gains in marking the mortgage HFS loan portfolio to fair value. The increase in noninterest income was also a result of $330 thousand of gains from returns on other investments and a $294 thousand gain due to fair value adjustments to the remaining common share investment retained in PFH.
Previous report
Consumer Program related income was $264 thousand for the three months ended September 30, 2025, compared to $79 thousand for the three months ended September 30, 2024. While we recognized less income in the third quarter of 2025 from borrowers paying off their promotional loans before the end of the promotional period triggering payment of interest from the third-party, there were less negative fair value adjustments on the related derivative in the third quarter of 2025 compared to the same quarter in 2024. Noninterest income from the Consumer Program is expected to be increasingly immaterial going forward as promotional loans have declined to $7 million at the end of the third quarter of 2025 and the derivative value is immaterial at September 30, 2025.
Previous report
Noninterest income increased 105% to $62 million for the nine months ended September 30, 2025, compared to $30 million for the nine months ended September 30, 2024. The increase in noninterest income was primarily driven by the $32 million gain on our PFH investment, which comprised the gain on deconsolidation of PFH in the first quarter of 2025 and gain on the sale of a portion of our ownership in PFH and fair value adjustments to the remaining common share investment retained in the second and third quarter of 2025. The increase was also driven partially by $4 million of higher income from mortgage banking activity during 2025 compared to 2024. The increase in mortgage banking income was due to higher gain on sale income driven by $194 million, or 36%, higher loan sales during the nine months ended September 30, 2025 compared to 2024. The increases were partially offset by declines in Consumer Program derivative income and income from bank-owned life insurance held as a result of several one-time death benefit gains in 2024 that did not re-occur in 2025
Previous report
The decline in Consumer Program related income included higher derivative fair value losses during the nine months ended September 30, 2025 compared to 2024 because the promotional loan population declined at a faster pace during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The fair value losses on the derivative were $443 thousand higher during the nine months ended September 30, 2025 compared to the same period in 2024. The remaining decline in the Consumer Program derivative income was a combination of less income earned from the third-party on origination of loans, which ended in January of 2025, and less reimbursement due to us when borrowers paid off their promotional loans before the end of the promotional period. These two items resulted in a combined decline of $2 million in income when comparing the nine months ended September 30, 2025 to the same period in 2024. Noninterest income from the Consumer Program is expected to be increasingly immaterial going forward as promotional loans have declined to only $7 million at the end of the third quarter of 2025 and the derivative value is immaterial at September 30, 2025.
Previous report
Salaries and benefits expenses increased $2 million in the three months ended September 30, 2025, compared to the same period in 2024. PMC accounted for the growth in salaries and benefits while the remainder of the bank managed to reflect a small decline in total compensation costs. For the third quarter of 2025, PMC had $7 million in total salaries and benefits, an increase of $2 million or 35% compared to the same period in 2024. All other compensation costs were $11 million in the third quarter of 2025, down slightly from the $12 million reported in the third quarter of 2024.
Previous report
FDIC insurance expense increased $454 thousand during the three months ended September 30, 2025, compared to the same period in 2024 primarily due to an increase in our assessment base as a result of the financial restatements in 2024 along with changes in asset quality in 2025. Occupancy expenses increased $327 thousand in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to one-time expenses incurred in the third quarter of 2025 that did not occur in the third quarter of 2024.
Previous report
Miscellaneous lending expenses decreased $867 thousand in the third quarter of 2025 compared to the third quarter of 2024 due to lower servicing fees paid to the third-party servicer of our Consumer Program loan portfolio which has reduced in size by 48% since January 1, 2024, less repurchase reserve provisions on PMC sold loans, and less provisions on unfunded Bank issued loan commitments during the current year quarter compared to the prior year quarter.
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Professional fees decreased $405 thousand in the third quarter of 2025 compared to the third quarter of 2024. The primary driver of the decline was due to expenses during the three months ended September 30, 2024 related to the restatement of financial statements in 2024 that did not reoccur in the third quarter of 2025. Professional fees in the third quarter of 2025 included $1 million in legal fees associated with mortgage recruiting that management expects will subside in the coming quarters.
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Noninterest expenses increased 10% to $96 million during the nine months ended September 30, 2025, compared to $88 million during the nine months ended September 30, 2024. The increase was primarily driven by higher salaries and benefits expenses, data processing expense, and FDIC insurance expenses in 2025 compared to 2024. These increases were partially offset by less core deposit intangible amortization that fully amortized by June 30, 2025.
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The higher salaries and benefits expense of $5 million for the nine months ended September 30, 2025 compared to the same period in 2024 was driven primarily due to additions of several lending teams at PMC, one of which is the top mortgage originator in the Nashville, TN market and the other is the fourth ranked VA lender in the country. These teams drove the salaries and benefits expense in 2025 due to salary draws while they rebuilt their portfolios. These teams are expected to generate production in 2025 that will exceed these initial salary draws, which should help to generate income that offsets the salary expenses in later periods. Increase in salaries and benefits was also from the growth in salaries and benefit expenses in the Panacea and Mortgage Warehouse lines of business, each increasing $1 million when comparing the year-to-date periods in 2025 to 2024.
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FDIC insurance expense increased $1 million during the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to an increase in our assessment base as a result of the financial restatements in 2024 and the changes in asset quality in 2025.
Previous report
Data processing expense increased $1 million comparing the nine months ended September 30, 2025 to 2024, which was due to higher processing volume and was also a result of our continued use of two core operating systems. We have negotiated a new contract with our core data provider with contract terms that began to provide significant reductions in data processing expense in August of 2025.
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LHFS declined $45 million from December 31, 2024 primarily due to the sale of $51 million of LPF loans, paydowns of Consumer Program LHFS, and the transfer back to net loans of $102 million of Consumer Program loans in 2025 after the decision to retain these for the foreseeable future or until maturity. These declines were partially offset by increased originations of PMC loans held for sale at fair value and the transfer to held for sale, at the lower of cost or market, of commercial loans in the Panacea Division that we intend to sell in the fourth quarter to another financial institution.
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(1) Does not include $9 million of remaining fair market value adjustments related to the original $20 million write-down of the portfolio when transferred to LHFS as of December 31, 2024.
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The following table describes the period over which our Consumer Program loans that are currently in a no interest promotional period will exit that promotional period and begin to amortize. All these promotional loans generally amortize over four years from the date they exit the promotional period if not prepaid before the end of the promotional period ($ in thousands):
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During the three and nine months ended September 30, 2025, $8 million and $34 million, respectively, of Consumer Program loans either paid off during the no interest promotional period or converted to amortizing at the end of the promotional period.
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Nonperforming assets increased $70 million, or 418%, as of September 30, 2025 compared to December 31, 2024, which was driven by an increase in nonaccrual loans. The increase in nonaccrual was primarily due to the addition of one commercial real estate loans with a $40 million amortized cost balance that was past due over 30 days as of September 30, 2025 and one commercial relationship comprised of two loans totaling $24 million in amortized cost that was past due over 90 days as of September 30, 2025. Despite the commercial real estate loan only being 30-59 days past due, the credit has exhibited certain weaknesses that warranted placing it on nonaccrual, including a decline in occupancy of the underlying office building leading to reduced lease income. We have a lien on the underlying collateral which is
Previous report
Class A office space in a desirable location in northern Virginia. The borrower is actively seeking new tenants for vacant office space in the building. We assess expected credit losses on this loan individually and have a $7 million individual reserve against the loan, or 18% of its amortized cost balance, as of September 30, 2025. The commercial loans past due over 90 days were utilized by the customer to support a business acquisition into an existing business. The merged companies have taken longer than anticipated to realize the anticipated reduction in operating costs and the stabilization of revenues. The company became profitable at the end of 2024 and has shown steady improvement during 2025 with anticipation of being able to provide full debt service coverage by the end of 2025 or early in 2026. We assess expected credit losses on this loan individually and have a $5 million individual reserve against the loan, or 20% of its amortized cost balance, as of September 30, 2025
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Our allowance for credit losses was $45 million as of September 30, 2025, compared to $54 million as of December 31, 2024. The $8 million decrease was driven by $19 million in net charge-offs during the nine months ended September 30, 2025, primarily a result of Consumer Program loans, and less provision for credit losses. Our provision for credit losses decreased $8 million and $7 million during the three and nine months ended September 30, 2025 compared to the same periods in 2024, respectively, primarily related to improved performance in the Consumer Program portfolio driven by the significant decline in promotional loans that drove prior credit losses, a changing mix of the Bank’s loan portfolio to loan categories with lower reserve requirements, and the $53 million of commercial loans moved to LHFS as of September 30, 2025 due to our intent to sell the loans. Partially offsetting these declines was specific provisions for expected credit losses of $7 million on the individually evaluated commercial real estate loan that was 30-59 days past due and proactively placed on nonaccrual during the nine months ended September 30, 2025.
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Net charge-offs were primarily related to the Consumer Program portfolio during the three and nine months ended September 30, 2025 and 2024. During the three and nine months ended September 30, 2025, we charged-off $1 million and $17 million, respectively, net of recoveries, in the Consumer Program portfolio. Comparatively, during the three and nine months ended September 30, 2024, we charged-off $8 million and $18 million, respectively, net of recoveries. A majority of these charge-offs related to loans originated from the third quarter of 2022 through the first quarter of 2023 where we experienced significant credit weaknesses. When excluding the Consumer Program net charge-offs, we had net charge-offs of $300 thousand and $2 million during the three and nine months ended September 30, 2025, respectively, and net charge-offs of $4 million and $6 million during the three and nine months ended September 30, 2024, respectively.
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Provision for the Consumer Program portfolio has subsided significantly since 2024 and was $274 thousand in the third quarter of 2025 and $2 million during the nine months ended September 30, 2025, because the earlier vintage promotional loans that have resulted in a majority of our previous credit losses have mostly converted to amortizing in 2024 or early 2025. We believe that any remaining loans in these older vintages, along with newer vintage promotional loans that end their promotional period over the next two quarters have been considered in our reserving methodology based on our loss experience from 2024 to the first quarter of 2025 with the earlier vintage promotional loans. Specifically, our methodology was updated to consider promotional loan maturity and amount of first payment defaults with eventual charge-off, which was a key driver to charge-offs of these loans in 2024 and the first quarter of 2025. We have also implemented loss mitigation efforts that include working with promotional loan borrowers both prior to the end of the promotional period and once a borrower defaults in order to maximize collectability. A combination of these factors, along with the remaining balance of promotional loans of only $7 million, resulted in our lower provisioning for the three and nine months ended September 30, 2025 and lower ending allowance balance at September 30, 2025.
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The market for deposits is competitive. We offer a line of traditional deposit products that currently include noninterest-bearing and interest-bearing checking (or NOW accounts), commercial checking, money market accounts, savings accounts and certificates of deposit. We compete for deposits through our banking branches with competitive pricing, as well as nationally through advertising and online banking. We use deposits as a principal source of funding for our lending, purchasing of investment securities and for other business purposes. We seek to fund increased loan volumes by growing core deposits, but, subject to internal policy limits on the amount of funding we may maintain, we may use funding sources to fund shortfalls, if any, or to provide additional liquidity. We use purchased brokered deposits as part of our overall liquidity management strategy on an as needed basis, and we purchase such brokered deposits through nationally recognized networks.
Previous report
Our deposits are diversified in type and by underlying customers and lack significant concentrations to any type of customer (i.e. commercial, consumer, government) or industry. Deposits are net of excess amounts we sweep off balance sheet to manage liquidity. Deposits swept off our balance sheet were zero as of September 30, 2025, compared to $137 million as of December 31, 2024. The decline since year end was driven by the growth in our loan portfolio, which required us to retain more deposits on our balance sheet.
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Other borrowings can consist of federal funds purchased, secured borrowings due to failed loan sales, and repo transactions that mature within one year, which are secured transactions with customers. The balance in repo accounts at both September 30, 2025 and December 31, 2024 was $4 million.
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Primis Bank’s capital position is consistent with being well-capitalized under the regulatory framework for PCA.
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Previous wording
Management’s discussion and analysis (“MD&A”) is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Primis. This discussion and analysis should be read in conjunction with the condensed consolidated financial statements, the footnotes thereto, and the other financial data included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of results that may be achieved for any other period. The emphasis of this discussion will be on the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024 for the consolidated income statements. For the consolidated balance sheets, the emphasis of this discussion will be the balances as of September 30, 2025 compared to December 31, 2024. This discussion and analysis contain statements that may be considered “forward-looking statements” as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See the following section for additional information regarding forward-looking statements.
Current wording
Management’s discussion and analysis (“MD&A”) is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Primis. This discussion and analysis should be read in conjunction with the condensed consolidated financial statements, the footnotes thereto, and the other financial data included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2025. Results of operations for the three months ended March 31, 2026, are not necessarily indicative of results that may be achieved for any other period. The emphasis of this discussion will be on the three months ended March 31, 2026, compared to the three months ended March 31, 2025 for the condensed consolidated income statements. For the condensed consolidated balance sheets, the emphasis of this discussion will be the balances as of March 31, 2026 compared to December 31, 2025. This discussion and analysis contain statements that may be considered “forward-looking statements” as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See the following section for additional information regarding forward-looking statements.
Previous wording
Primis Financial Corp. (NASDAQ: FRST) is the bank holding company for Primis Bank, a Virginia state-chartered bank, which commenced operations on April 14, 2005. Primis Bank provides a range of financial services to individuals and small and medium-sized businesses. As of September 30, 2025, Primis Bank had 24 full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland. The Company is headquartered in McLean, Virginia and has an administrative office in Glen Allen, Virginia and an operations center in Atlee, Virginia. PMC, a residential mortgage lender headquartered in Wilmington, North Carolina, is a consolidated subsidiary of Primis Bank. PFH owns the rights to the Panacea Financial brand and its intellectual property and partners with the Bank to offer a suite of financial products and services for doctors, their practices, and ultimately the broader healthcare industry through the Panacea Financial Division of the Bank. PFH was a consolidated subsidiary of Primis until March 31, 2025, when it was deconsolidated in accordance with applicable accounting guidance.
Current wording
Primis Financial Corp. is the bank holding company for Primis Bank, a Virginia state-chartered bank which commenced operations on April 14, 2005. Primis Bank provides a range of financial services to individuals and small and medium-sized businesses. Primis Bank has 24 full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. As of March 31, 2026, Primis had $4.3 billion in total assets, $3.4 billion in total loans held for investment, $3.4 billion in total deposits and $427 million in total stockholders’ equity.
Previous wording
In 2024, we focused on organizing the core bank and lines of business that we believe drive premium operating results. The third quarter of 2025 demonstrated progress in key areas that are expected to continue and build through the rest of the year and into 2026. Our strategy centers on growing earning assets back to previous levels after the sale of our Life Premium Finance division and achieving higher production and profitability in our retail mortgage business. We continued to execute successfully during the first nine months of 2025 on these strategies, which included the following:
Current wording
We organized the core bank and lines of business in a way that we believe will drive premium operating results. Our strategy centers on growing earning assets, growing non-interest deposits, and achieving higher production and profitability in our retail mortgage business and the first quarter of 2026 was reflective of progress in these areas.
Previous wording
We experienced improved financial performance in both the three and nine months ended September 30, 2025 compared to the same periods in 2024. Net income available to common shareholders for the three months ended September 30, 2025 totaled $7 million, or $0.28 basic and diluted earnings per share, compared to net income of $1 million, or $0.05 basic and diluted earnings per share, for the three months ended September 30, 2024, resulting in an increase year-over-year of $6 million, or 600%. Net income available to common shareholders for the nine months ended September 30, 2025 totaled $32 million, or $1.29 basic and diluted earnings per share, compared to net income of $7 million, or $0.29 basic and diluted earnings per share, for the nine months ended September 30, 2024, resulting in an increase year-over-year of $25 million, or 357%. The key financial drivers of the improvement are noted in the following table with additional discussions following the table ($ in thousands).
Current wording
The key financial drivers of the year over year results are noted in the following table with additional discussions following the table ($ in thousands).
Previous wording
Three-Month Comparison Net income available to common shareholders for the three months ended September 30, 2025 totaled $7 million, or $0.28 basic and diluted earnings per share, compared to $1 million, or $0.05 basic and diluted earnings per share, for the three months ended September 30, 2024. The results reflect a decrease in provision for credit losses of $7 million driven by less provision required on the Consumer Program portfolio, the changing mix of the Bank’s loan portfolio to loan categories with lower reserve requirements and the move of approximately $53 million of commercial loans to held for sale. The results also reflect an increase in noninterest income of $3 million primarily due to higher mortgage banking income in the third quarter driven by growth of PMC and higher loan sales and related gains and a $1 million increase in net interest income driven by lower interest expenses on deposits and borrowings. These are partially offset by an increase in noninterest expense of $1 million driven by personnel expenses due to growth in PMC and Mortgage Warehouse, a $2 million increase in our income tax provision and a decrease in noncontrolling interest income of $2 million. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.
Current wording
Net income available to common shareholders for the three months ended March 31, 2026 totaled $7 million, or $0.30 basic and diluted earnings per share, compared to $23 million, or $0.92 basic and diluted earnings per share, for the three months ended March 31, 2025. Net income available to common shareholders during the three months ended March 31, 2025 included a $25 million one-time gain related to the deconsolidation of PFH. When excluding the one-time gain, net income available to common shareholders grew $9 million in the first quarter of 2026 when compared to the same quarter last year and reflects an increase in noninterest income of $6 million primarily due to higher mortgage banking income in the first quarter of 2026 driven by growth of PMC and higher loan sales and related gains. The results also reflect a $6 million increase in net interest income driven by an increase in interest and dividend income primarily from higher average loans held for investment balances. These are partially offset by an increase in noninterest expenses of $1 million driven by personnel expenses due to growth in PMC and a decrease in noncontrolling income of $4 million. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.
Previous wording
Net interest income was $29 million for the three months ended September 30, 2025, compared to $28 million for the three months ended September 30, 2024. Net interest income increased as a result of interest-bearing liability costs declining more than the declines in interest-earning asset income. Net interest income for the third quarter of 2025 included $1 million of interest reversals on loans that were moved to nonaccrual in the quarter. Our net interest margin for the three months ended September 30, 2025 was 3.18%, compared to 2.97% for the three months ended September 30, 2024. Continued rebuilding of earning asset levels coupled with favorable deposit pricing was responsible for the improvement during the third quarter of 2025. Margin increased by 21 basis points primarily as a result of lower average interest-earning asset balances and slightly higher net interest income when comparing the three months ended September 30, 2025 to the three months ended September 30, 2024.
Current wording
Net interest income was $32 million for the three months ending March 31, 2026, compared to $26 million for the three months ended March 31, 2025. Net interest income increased primarily as a result of higher average net loans balances in the first quarter of 2026 compared to same period in prior year while rates over this same time remained relatively stable. Interest expense remained relatively flat due to lower rates on interest bearing deposit accounts despite deposit growth in the current year. Our net interest margin for the three months ending March 31, 2026 was 3.43%, compared to 3.15% for the three months ending March 31, 2025. Continued rebuilding of earning asset levels coupled with favorable deposit pricing was responsible for the improvement during the first quarter of 2026. Margin increased by 28 basis points primarily from higher average interest-earning asset balances and higher net interest income when comparing the three months ending March 31, 2026 to the three months ending March 31, 2025.
Previous wording
The provision for (recovery of) credit losses is a current charge to earnings made in order to adjust the allowance for credit losses for current expected losses in the loan portfolio based on an evaluation of the loan portfolio characteristics, current economic conditions, changes in the nature and volume of lending, historical loan experience and other known internal and external factors affecting loan collectability, and assessment of reasonable and supportable forecasts of future economic conditions that would impact collectability of the loans. Our allowance for credit losses is calculated by segmenting the loan portfolio by loan type and applying risk factors to each segment. The risk factors are determined by considering historical loss data, peer data, as well as applying management’s judgment.
Current wording
The provision for credit losses is a current charge to earnings made in order to adjust the allowance for credit losses for current expected losses in the loan portfolio based on an evaluation of the loan portfolio characteristics, current economic conditions, changes in the nature and volume of lending, historical loan experience and other known internal and external factors affecting loan collectability, and assessment of reasonable and supportable forecasts of future economic conditions that would impact collectability of the loans. Our allowance for credit losses is calculated by segmenting the loan portfolio by loan type and applying risk factors to each segment. The risk factors are determined by considering historical loss data, peer data, as well as applying management’s judgment.
Previous wording
Noninterest expenses increased 4% to $32 million during the three months ended September 30, 2025, compared to $31 million during the three months ended September 30, 2024. The increase was primarily driven by higher salaries and benefits expenses, FDIC insurance expense, and occupancy expenses, partially offset by lower miscellaneous lending expenses, professional fees, and amortization of core deposit intangibles. Our core deposit intangible fully amortized in the second quarter of 2025.
Current wording
Noninterest expenses increased 4% to $34 million during the three months ended March 31, 2026, compared to $33 million during the three months ended March 31, 2025. The increase was primarily driven by higher salaries and benefits expenses and occupancy expenses, partially offset by declines in most of our other noninterest expense categories.
Previous wording
Gross LHFI were $3.2 billion and $2.9 billion as of September 30, 2025 and December 31, 2024, respectively. The increase in loans was driven by the transfer back from LHFS into the consumer loans category in LHFI of Consumer Program loans along with growth of mortgage warehouse loans and Panacea Division commercial loans, both of which were the primary driver of the $307 million increase in commercial loans seen below. The growth was partially offset by loan paydowns during the nine months ended September 30, 2025 of loans secured by real estate. As of September 30, 2025 and December 31, 2024, a majority of our loans were to customers located in Virginia and Maryland. We are not dependent on any single customer or group of customers whose insolvency would have a material adverse effect on our operations.
Current wording
Gross LHFI were $3.4 billion and $3.3 billion as of March 31, 2026 and December 31, 2025, respectively. The increase in loans was driven by growth of mortgage warehouse loans and Panacea Division commercial loans. The growth was partially offset by loan paydowns during the three months ended March 31, 2026 of consumer loans and non-owner occupied commercial real estate loans. As of March 31, 2026 and December 31, 2025, a majority of our loans were to customers located in Virginia and Maryland. We are not dependent on any single customer or group of customers whose insolvency would have a material adverse effect on our operations.
Previous wording
Our highest concentration of credit by loan type is in commercial real estate. As of September 30, 2025, 38% of our loan portfolio was comprised of loans secured by commercial real estate, including multi-family residential loans and loans secured by farmland. Commercial real estate loans are generally viewed as having a higher risk of default than residential real estate loans and depend on cash flows from the owner’s business or the property’s tenants to service the debt. The borrower’s cash flows may be affected significantly by general economic conditions, a downturn in the local economy, or in occupancy rates in the market where the property is located, any of which could increase the likelihood of default.
Current wording
Our highest concentration of credit by loan type is in commercial real estate. As of March 31, 2026, 36% of our loan portfolio was comprised of loans secured by commercial real estate, including multi-family residential loans and loans secured by farmland. Commercial real estate loans are generally viewed as having a higher risk of default than residential real estate loans and depend on cash flows from the owner’s business or the property’s tenants to service the debt. The borrower’s cash flows may be affected significantly by general economic conditions, a downturn in the local economy, or in occupancy rates in the market where the property is located, any of which could increase the likelihood of default.
Previous wording
The following table presents the composition of the industry classification for commercial real estate non-owner occupied loans as a percentage of total loans for the periods ended September 30, 2025 and December 31, 2024 (dollars in thousands):
Current wording
The following table presents the composition of the industry classification for commercial real estate non-owner occupied loans as a percentage of total loans for the periods ended March 31, 2026 and December 31, 2025 ($ in thousands):
Previous wording
The following table presents the composition of office portfolio loans for commercial real estate non-owner occupied loans, their loan count and their weighted average loan-to-value percentage as of September 30, 2025 and December 31, 2024 (dollars in thousands):
Current wording
The following table presents the composition of office portfolio loans for commercial real estate non-owner occupied loans, their loan count and their weighted average loan-to-value as of March 31, 2026 and December 31, 2025 ($ in thousands):
Previous wording
As of September 30, 2025, the principal balance outstanding of Consumer Program loans was $110 million, excluding a $9 million discount as a result of our prior decision to market a majority of the portfolio for sale, which has since been moved back to LHFI and will be run-off over time. These loans are accounted for like our other consumer loans and are not placed on nonaccrual because they are charged off when they become 90 days past due. The allowance on this portfolio plus the discount resulted in a reduction of the outstanding principal balance of $11 million, or 10%. As of September 30, 2025, 93% of the outstanding principal balance was current, resulting in 135% coverage by the aggregate allowance and discount of the non-current principal balances.
Current wording
As of March 31, 2026, the principal balance outstanding of Consumer Program loans was $82 million, inclusive of a $5 million discount as a result of our prior decision to market a majority of the portfolio for sale, which has since been moved back to LHFI and will be run-off over time. These loans are accounted for like our other consumer loans and are not placed on nonaccrual because they are charged off when they become 90 days past due. The allowance on this portfolio plus the discount amounts to $7 million, or 8% of the portfolio. As of March 31, 2026, 94% of the outstanding principal balance was current and we had 355% coverage of the principal balance of loans greater than 30 days past due by the aggregate allowance and discount.
Previous wording
Our investment securities portfolio provides us with required liquidity and collateral to pledge to secure public deposits, certain other deposits, advances from the FHLB of Atlanta, and repurchase agreements.
Current wording
Our investment securities portfolio provides us with required liquidity and collateral to pledge to secure public deposits, certain other deposits, advances from the FHLB, and repurchase agreements.
Previous wording
AFS and HTM investment securities totaled $243 million as of September 30, 2025, a decrease of 1% from $245 million as of December 31, 2024, primarily due to improvement in unrealized losses on AFS securities and paydowns, maturities, and calls of the AFS and HTM investments over the past nine months, partially offset by purchases of AFS securities during that time. We recognized no credit impairment charges related to credit losses on our HTM investment securities during the three and nine months ended September 30, 2025.
Current wording
AFS and HTM investment securities totaled $179 million as of March 31, 2026, compared to $178 million as of December 31, 2025, primarily due to purchases of AFS securities in the first quarter of 2026, partially offset by unrealized losses on AFS securities and paydowns, maturities, and calls of the AFS and HTM investments during that time. We recognized no credit impairment charges related to credit losses on our HTM investment securities during the three months ended March 31, 2026.
Previous wording
The variety of deposit accounts we offer allows us to be competitive in obtaining funds and in responding to the threat of disintermediation (the flow of funds away from depository institutions such as banking institutions into direct investment vehicles such as government and corporate securities). Our ability to attract and maintain deposits, and the effect of such retention on our cost of funds, has been, and will continue to be, significantly affected by the general economy and market rates of interest.
Current wording
Our deposits are diversified in type and by underlying customers and lack significant concentration in any type of customer (i.e. commercial, consumer, government) or industry. The variety of deposit accounts we offer allows us to be competitive in obtaining funds and in responding to the threat of disintermediation (the flow of funds away from depository institutions such as banking institutions into direct investment vehicles such as government and corporate securities). Our ability to attract and maintain deposits, and the effect of such retention on our cost of funds, has been, and will continue to be significantly affected by the general economy and market rates of interest.
Previous wording
Total deposits increased by $165 million to $3.3 billion as of September 30, 2025 from $3.2 billion at December 31, 2024. The mix of deposits changed during the nine months ended September 30, 2025, including an increase in lower-cost demand, NOW deposit balances and savings balances of $247 million, offset by a decline in money market and time deposit account balances of $82 million. The driver of the increase since year end has been due to growth of noninterest bearing and lower cost interest bearing deposit accounts generated by the Panacea and Mortgage Warehouse lines of business that have focused on this deposit growth to cost-effectively fund their loan growth. We have no wholesale deposit funding at September 30, 2025 or December 31, 2024.
Current wording
Total deposits increased by $28 million to $3.4 billion as of March 31, 2026 from $3.4 billion at December 31, 2025. The mix of deposits changed during the three months ended March 31, 2026, including an increase in money market,
Previous wording
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit accounts that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured deposits as calculated per regulatory guidance were $831 million, or 25% of total deposits at the Bank, as of September 30, 2025.
Current wording
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit accounts that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured deposits as calculated per regulatory guidance were $873 million, or 25% of total deposits at the Bank, as of March 31, 2026.
Previous wording
We use other borrowed funds to support our liquidity needs and to temporarily satisfy our funding needs from increased loan demand and for other shorter-term purposes. We are a member of the FHLB and are authorized to obtain advances from the FHLB from time to time, as needed. The FHLB has a credit program for members with different maturities and interest rates, which may be fixed or variable. We are required to collateralize our borrowings from the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. As of September 30, 2025 and December 31, 2024, we had $85 million and no FHLB borrowings, respectively. The FHLB borrowings at September 30, 2025 are short-term borrowings that were obtained in September 2025 primarily to fund increased loan growth experienced at the end of the quarter. As of September 30, 2025, we had $262 million of unused and available FHLB lines of credit as well as $595 million of available credit with the FRB, secured by excess collateral pledged to the FHLB and FRB in the form of loans and investment securities.
Current wording
We borrow funds on a short-term basis to support our liquidity needs and to temporarily satisfy our funding needs from increased loan demand and for other shorter-term purposes. We are a member of the FHLB and are authorized to obtain advances from the FHLB from time to time, as needed. The FHLB has a credit program for members with different maturities and interest rates, which may be fixed or variable. We are required to collateralize our borrowings from FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. As of March 31, 2026 and December 31, 2025, we had $230 million and $25 million of FHLB borrowings, respectively. The borrowings from the FHLB during the three months ended March 31, 2026 are short-term borrowings and were obtained primarily to fund increased loan growth experienced during the quarter. As of March 31, 2026, we had $242 million of unused and available FHLB lines of credit as well as $493 million of available credit with the FRB, secured by excess collateral pledged to the FHLB and FRB in the form of loans and investment securities.
Previous wording
We had secured borrowings of $15 million and $17 million as of September 30, 2025 and December 31, 2024, respectively, related to loan transfers to other financial institutions during 2023 and 2024 that did not meet the criteria to be treated as a sale under applicable accounting guidance. These borrowings reflect the cash received for transferring the loans to the other financial institution and any unamortized sale premium and are secured by approximately the same amount of loans held for investment that are recorded in our balance sheet. We retained the servicing of the loans that were transferred and accordingly receive principal and interest from the borrower as contractually required and transfer the interest to the other financial institution net of our contractually agreed upon servicing fee. The loans transferred have an average maturity of approximately ten years, which will be the time over which the principal balance of the loans in our balance sheet and secured borrowings will pay down, absent borrower prepayments. For additional information on secured borrowings refer to “Note 7 –Debt and Other Borrowings” in this Form 10-Q.
Current wording
We had secured borrowings of $14 million and $15 million as of March 31, 2026 and December 31, 2025, respectively. These borrowings reflect the cash received for transferring the loans to the other financial institution and any unamortized sale premium and are secured by approximately the same amount of loans held for investment that are recorded in our balance sheet. For additional information on secured borrowings refer to “Note 7 –Debt and Other Borrowings” in this Form 10-Q.
Previous wording
The objective of our liquidity management is to ensure the ability to meet our financial obligations. These obligations include the payment of deposits on demand or at maturity, the repayment of borrowings at maturity and the ability to fund commitments and other new business opportunities. We obtain funding from a variety of sources, including customer deposit accounts, customer certificates of deposit and payments on our loans and investments. If our level of core deposits is not sufficient to fully fund our lending activities, we have access to funding from additional sources, including but not limited to, borrowing from the FHLB and institutional certificates of deposits. In addition, we maintain federal funds lines of credit with two correspondent banks, totaling $75 million, and utilize securities sold under agreements to repurchase and reverse repurchase agreement borrowings from approved securities dealers as needed. For additional information about borrowings and anticipated principal repayments refer to “Note 7 –Debt and Other Borrowings” and “Note 9 –Commitments and Contingencies”.
Current wording
The objective of our liquidity management is to ensure the ability to meet our financial obligations. These obligations include the payment of deposits on demand or at maturity, the repayment of borrowings at maturity and the ability to fund commitments and other new business opportunities. We obtain funding from a variety of sources, including customer deposit accounts, customer certificates of deposit and payments on our loans and investments. If our level of core deposits is not sufficient to fully fund our lending activities, we have access to funding from additional sources, including but not limited to, borrowing from the FHLB and institutional certificates of deposits. In addition, we maintain federal funds lines of credit with two correspondent banks, totaling $75 million, and utilize securities sold under agreements to repurchase and reverse repurchase agreement borrowings from approved securities dealers as needed. For additional information about borrowings and anticipated principal repayments refer to the discussion previously in “Deposits and Other Borrowings”, “Note 7 –Debt and Other Borrowings” and “Note 9 –Commitments and Contingencies”.
Previous wording
Capital management consists of providing equity to support both current and future operations. Primis Financial Corp. and its subsidiary, Primis Bank, are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (“PCA”), we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. As of September 30, 2025 and December 31, 2024, the most recent regulatory notifications categorized the Bank as well capitalized under regulatory framework for PCA. Federal banking agencies do not provide a similar well capitalized threshold for bank holding companies.
Current wording
Capital management consists of providing equity to support both current and future operations. Primis Financial Corp. and its subsidiary, Primis Bank, are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (“PCA”), we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. As of March 31, 2026 and December
Previous wording
Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of Total and Tier I capital (as defined in the regulations) to average assets (as defined in the regulations). Management believes, as of September 30, 2025, that we meet all capital adequacy requirements to which we are subject.
Current wording
Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of Total and Tier I capital (as defined in the regulations) to average assets (as defined). Management believes, as of March 31, 2026, that we meet all capital adequacy requirements to which we are subject.
Previous wording
Primis Financial Corp. and Primis Bank remain well-capitalized under Basel III capital requirements. Primis Bank had a capital conservation buffer of 3.39% and 4.04% as of September 30, 2025 and December 31, 2024, respectively, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions.
Current wording
Primis Financial Corp. and Primis Bank remain well-capitalized under Basel III capital requirements. Primis Bank had a capital conservation buffer of 3.76% and 3.99% as of March 31, 2026 and December 31, 2025, respectively, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions.
Previous wording
The critical accounting policies are discussed in the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2024. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1 -Organization and Significant Accounting Policies” in the Form 10-K for the year ended December 31, 2024. Disclosures regarding changes in our significant accounting policies since year end and the effects of new accounting pronouncements are included in “Note 1 -Accounting Policies” in this Form 10-Q. There have been no changes to the significant accounting policies during the nine months ended September 30, 2025. Notwithstanding, we are providing an update to the Goodwill discussion from our Form 10-K to describe the results of our annual impairment testing performed during the quarter.
Current wording
The critical accounting policies are discussed in the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2025. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1 -Organization and Significant Accounting Policies” in the Form 10-K for the year ended December 31, 2025. Disclosures regarding changes in our significant accounting policies since year end and the effects of new accounting pronouncements are included in “Note 1 -Accounting Policies” in this Form 10-Q. There have been no changes to the significant accounting policies during the three months ended March 31, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Panacea Financial Division of the Bank
Current report — wording carried from elsewhere
31, 2025, the most recent regulatory notifications categorized the Bank as well capitalized under regulatory framework for PCA. Federal banking agencies do not provide a similar well capitalized threshold for bank holding companies.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table details average balances of interest-earning assets and interest-bearing liabilities, the amount of interest earned/paid on such assets and liabilities, and the yield/rate for the periods indicated: