Primis Financial Corp.

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, 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.

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 and six months ended June 30, 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 and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 for the condensed consolidated income statements. For the condensed consolidated balance sheets, the emphasis of this discussion will be the balances as of June 30, 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

Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and are instead based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are inherently subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. The words “believe,” “may,” “forecast,” “should,” “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “predict,” “intend,” “continue,” “would,” “could,” “hope,” “might,” “assume,” “objective,” “seek,” “plan,” “strive” or similar words, or the negatives of these words, identify forward-looking statements.

Current wording

Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q, including statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, that are not statements of historical fact constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and are instead based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are inherently subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. The words “believe,” “may,” “forecast,” “should,” “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “predict,” “intend,” “continue,” “would,” “could,” “hope,” “might,” “assume,” “objective,” “seek,” “plan,” “strive” or similar words, or the negatives of these words, identify forward-looking statements.

Previous wording

Forward-looking statements are not guarantees of performance or results and should not be relied upon as representing management’s views as of any subsequent date. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe we have chosen these assumptions or bases in good faith and that they are reasonable. We caution you, however, that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material. When considering forward-looking statements, you should refer to the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our periodic and current reports filed with the SEC for specific factors that could cause our actual results to be different from those expressed or implied by our forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q (or an earlier date to the extent applicable). Except as required by applicable law, we undertake no obligation to publicly updated or revise these forward-looking statements in light of new information or future events.

Current wording

Forward-looking statements are not guarantees of performance or results and should not be relied upon as representing management’s views as of any subsequent date. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe we have chosen these assumptions or bases in good faith and that they are reasonable. We caution you, however, that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material. When considering forward-looking statements, you should refer to the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our periodic and current reports filed with the SEC for specific factors that could cause our actual results to be different from those expressed or implied by our forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q (or an earlier date to the extent applicable). Except as required by applicable law, we undertake no obligation to publicly update or revise these forward-looking statements in light of new information or future events.

Previous 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.

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 June 30, 2026, Primis had $4.4 billion in total assets, $3.5 billion in total loans held for investment, $3.4 billion in total deposits and $434 million in total stockholders’ equity.

Previous 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.

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 second quarter of 2026 was reflective of progress in these areas.

Previous wording

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 wording

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, and PMC. The following highlights key metrics from these four areas during 2026:

Previous wording

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 wording

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, decade-old relationships with core customers. The digital platform ended the second 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 $38 million as of June 30, 2026, up substantially from $16 million at December 31, 2025. Approximately 74% of our digital deposit customers have been with the Bank for at least three years.

Previous 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).

Current wording

The key financial drivers of our results are noted in the following table with additional discussions following the table ($ in thousands).

Previous 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.

Current wording

Six-Month Comparison Net income available to common shareholders for the six months ended June 30, 2026 totaled $17 million, or $0.68 basic and diluted earnings per share, compared to $25 million, or $1.01 basic and diluted earnings per share, for the six months ended June 30, 2025. The decline was primarily a result of the $32 million of gains in 2025 due to 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 the second quarter of 2025. When excluding these PFH-related gains and a $6 million one-time gain on liquidation of an insurance agency investment in 2026, income before income taxes increased in 2026 compared to the same period in 2025 by $18 million. Net interest income grew $14 million during the six months of 2026 compared to the same period in 2025 due to higher interest income and flat interest expense. Noninterest income included $9 million higher mortgage banking income and $2 million higher gain on sale of loans. Noninterest expense increased by $7 million driven by personnel costs and occupancy expenses for the same reasons as described above for the three month ended period and was partially offset by lower data processing costs. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.

Previous wording

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:

Current wording

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 ($ in thousands):

Previous 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.

Current wording

Net interest income was $34 million for the three months ended June 30, 2026, compared to $25 million for the three months ended June 30, 2025. Net interest income increased primarily as a result of higher average LHFS and net loans balances in the second quarter of 2026 compared to same period in prior year along with a 31 basis point increase in rates over that time on net loans. Interest expense was $120 thousand higher in the second quarter of 2026 compared to same period in prior year due primarily to $1 million higher expense on $102 million average borrowings mostly offset by lower interest expense on deposits due to lower rates on all interest-bearing deposit accounts despite deposit growth in all accounts except for time deposits in the current year. Our net interest margin for the three months ended June 30, 2026 was 3.45%, compared to 2.86% for the three months ended June 30, 2025. Continued rebuilding of earning asset levels coupled with increased net loan rates and favorable deposit pricing was responsible for the improvement during the second quarter of 2026.

Previous wording

TheFinancial Condition section of this MD&A provides information on our loan portfolio, past due loans, nonperforming assets and the allowance for credit losses.

Current wording

TheFinancial Condition andAsset Quality sections of this MD&A provides information on our loan portfolio, past due loans, nonperforming assets and the allowance for credit losses.

Previous wording

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 wording

Noninterest income increased 22% to $22 million for the three months ended June 30, 2026, compared to $18 million for the three months ended June 30, 2025. The increase was primarily driven by a gain of $6 million from the liquidation of an insurance agency investment and $3 million of higher income from mortgage banking activity during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The 44% increase in mortgage banking income was related to an increase in funded and sold loan volume. PMC had a 58% increase in sold loans in the second quarter of 2026 compared to the same quarter of 2025, resulting in $2 million higher gains on sale in the second quarter of 2026 compared to the same quarter in 2025. Noninterest income also had a $1 million increase in gains on sale of loans year-over-year primarily driven by sales of Panacea Division commercial loans and, to a lesser extent, the sale of the guaranteed portion of SBA loans. Panacea Division and SBA loan sales are expected to continue during the last six months of 2026. These increases were partially offset by gains on sale of a portion of our PFH common shares during the three months ended June 30, 2025 and fair value adjustments to the remaining common share investment retained. Lastly, we experienced a $291 thousand increase in bank-owned life insurance income as a result of a restructure of that portfolio, which we expect to improve further in the second half of 2026 at the completion of the restructuring.

Previous 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.

Current wording

Noninterest expenses increased 20% to $38 million during the three months ended June 30, 2026, compared to $32 million during the three months ended June 30, 2025. The increase was primarily driven by higher salaries and benefits expenses, occupancy expenses, professional fees, and other operating expenses, partially offset by lower data processing expense.

Previous wording

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 wording

Salaries and benefits expense increased $3 million in the three months ended June 30, 2026, compared to the same period in 2025. PMC accounted for $2 million of the growth in salaries and benefits expense due to the significant growth of the business in the last year, while growth in the Mortgage Warehouse business and the core Bank comprised the remaining $1 million increase due to growth in these areas.

Previous wording

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 wording

Occupancy expenses grew $1 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily as a result of increased lease expense related to the sale-leaseback transaction executed in December of 2025. Other operating expense includes $1 million in payments to PFH during the second quarter of 2026 under an agreement to share the gains on sale of loans originated in the Panacea Division of the Bank and drove the change in other operating expense because prior year did not include similar amounts. The gross amount of gains on these loans is recorded in “gains on sale of loans” within noninterest income. We expect to have continued gains on sale of Panacea Division loans during the remainder of 2026 that will drive additional increases in other operating expenses due to sharing the gains with PFH.

Previous wording

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 wording

Offsetting some of the increases in noninterest expense was a decrease of $695 thousand in data processing expense during the three months ended June 30, 2026, compared to the same period in 2025. The decline in expense was driven by the reduced cost of data processing paid for our core loan and deposit systems as a result of renegotiating our core data processing contract with our vendor in the second half of 2025.

Previous wording

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 wording

LHFS increased $66 million from December 31, 2025 primarily due to the origination for sale during the quarter of $33 million of Panacea Financial division commercial loans and an increase of $33 million in PMC loans. A majority of the Panacea loans were originated in the second quarter and are expected to be sold to another financial institution during the third quarter of 2026. The increase in PMC loans is a result of overall increase in origination volume during the quarter.

Previous 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.

Current wording

Gross LHFI were $3.5 billion and $3.3 billion as of June 30, 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 six months ended June 30, 2026 of consumer, non-owner occupied commercial real estate, and residential 1-4 family loans. As of June 30, 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 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.

Current wording

Our highest concentration of credit by loan type is in commercial real estate. As of June 30, 2026, 35% 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 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):

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 percentage as of June 30, 2026 and December 31, 2025 ($ in thousands):

Previous wording

The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio as of March 31, 2026, which is only originated at fixed rates ($ in thousands):

Current wording

The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio principal balances as of June 30, 2026, which is only originated at fixed rates ($ in thousands):

Previous wording

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 wording

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 June 30, 2026 we only had approximately $250 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 four months.

Previous wording

We maintain appraisals on loans secured by real estate, particularly those categorized as nonperforming loans and potential problem loans. In instances where appraisals reflect reduced collateral values, we make an evaluation of the borrower’s overall financial condition to determine the need, if any, for impairment or write-down to their fair values. If foreclosure occurs, we record OREO at the lower of our recorded investment in the loan or fair value less our estimated costs to sell.

Current wording

We maintain appraisals on loans secured by real estate, particularly those categorized as nonperforming loans and potential problem loans. In instances where appraisals reflect reduced collateral values, we make an evaluation of the borrower’s overall financial condition to determine the need, if any, for impairment or write-down to their fair values. If

Previous wording

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 wording

Our allowance for credit losses was $46 million as of both June 30, 2026 and December 31, 2025. The allowance was flat during the six 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 commercial loan net charge-offs, while meaningful recoveries were realized on the Consumer Program portfolio during the six months. The provision during the six months ended June 30, 2026 was driven by increases in growth in the commercial and warehouse loan portfolio balances, specific provisions determined for non-owner occupied commercial real estate loans, and charge-offs of Consumer Program loans, partially offset by a decline in 1-4 family and multi-family residential loan balances.

Previous wording

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 wording

Our net charge-offs were primarily driven during the three and six months ended June 30, 2026 by commercial loans and one specific borrower relationship. The borrower was in nonaccrual as of December 31, 2025 and during the six months ended June 30, 2026, we agreed to a resolution of the loan relationship resulting in $4 million of charge-offs and the remaining balance of the loans paid-off due to another financial institution providing financing to the borrower. The Consumer Program portfolio was a secondary driver of net charge-offs in both three and six months ended June 30, 2026, but was down significantly from the same periods in the prior year. During the three months ended June 30, 2026 we charged-off $1 million net of recoveries compared to $5 million during the three months ended June 30, 2025. During the six months ended June 30, 2026 we charged-off $2 million net of recoveries compared to $16 million during the six months ended June 30, 2025. 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.

Previous 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.

Current wording

As of June 30, 2026, the principal balance outstanding of Consumer Program loans was $80 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 and discounts on this portfolio are 7% of the portfolio principal balance. As of June 30, 2026, 94% of the outstanding principal balance was current and we had 457% coverage of the principal balance of loans greater than 30 days past due by the aggregate allowance and discount.

Previous 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.

Current wording

AFS and HTM investment securities totaled $175 million as of June 30, 2026, a decrease of 2% from $178 million as of December 31, 2025, primarily due to unrealized losses on AFS securities with paydowns, maturities, and calls of the AFS and HTM investments over the past six months mostly being 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 six months ended June 30, 2026.

Previous wording

Debt investment securities that we have the positive intent and ability to hold to maturity are classified as HTM and are carried at amortized cost. Investment securities classified as AFS are those debt securities that may be sold in response to changes in interest rates, liquidity needs or other similar factors. Investment securities AFS are carried at fair value, with unrealized gains or losses net of deferred taxes, included in accumulated other comprehensive income (loss) in stockholders’ equity. Our portfolio of AFS securities currently contains a material amount of unrealized mark-to-market adjustments due to increases in market interest rates since the original purchase of many of these securities. We intend to hold these securities until maturity or recovery of the value and do not anticipate realizing any losses on the investments.

Current wording

Debt investment securities that we have the positive intent and ability to hold to maturity are classified as HTM and are carried at amortized cost. Investment securities classified as AFS are those debt securities that may be sold in response to changes in interest rates, liquidity needs or other similar factors. Investment securities AFS are carried at fair value, with unrealized gains or losses net of deferred taxes, included in accumulated other comprehensive income (loss) in stockholders’ equity. Our portfolio of AFS securities currently contains $5 million of unrealized mark-to-market adjustments due to increases in market interest rates since the original purchase of many of these securities.

Previous wording

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 wording

Total deposits increased by $51 million to $3.4 billion as of June 30, 2026 compared to $3.4 billion as of December 31, 2025. The mix of deposits changed during the six months ended June 30, 2026, including an increase in money market, savings and NOW deposit balances of $108 million, offset by a decline in demand deposits and time deposit account balances of $57 million. Deposits are net of excess amounts we sweep off balance sheet to manage liquidity, but swept deposits was immaterial as of June 30, 2026 and we had none as of December 31, 2025.

Previous wording

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 wording

Approximately $1.0 billion of our total deposits at both June 30, 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. We believe this platform is one of the safest and most functional deposit accounts in the nation and has been a funding platform for many of our national strategies, relieving pressure to utilize deposits from our core bank customers. While personal accounts in the platform has been relatively flat, we have successfully grown business accounts in 2026 with small business balances reaching $38 million at June 30, 2026, up substantially from $16 million at December 31, 2025. Despite the significant amount of our digital platform customers residing outside of our footprint, approximately 74% of our digital deposits have been with us for at least three years.

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 $873 million, or 25% of total deposits at the Bank, as of March 31, 2026.

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 $886 million, or 26% of total deposits as of June 30, 2026.

Previous wording

The following table sets forth the average balance and average rate paid on each of the deposit categories for the nine months ended March 31, 2026 and 2025 ($ in thousands):

Current wording

The following table sets forth the average balance and average rate paid on each of the deposit categories for the six months ended June 30, 2026 and 2025 ($ in thousands):

Previous 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.

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 the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. As of June 30, 2026 and December 31,

Previous 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.

Current wording

We had secured borrowings of $14 million and $15 million as of June 30, 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 LHFI 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

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.

Current wording

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 repayment of these notes resulted in $600 thousand and $1 million less interest expense during the three and six months ended June 30, 2026 compared to the same period in 2025, respectively.

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 the discussion previously in “Deposits and Other Borrowings”, “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 our funding sources 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 March 31, 2026 and December

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 June 30, 2026 and December 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.

Previous wording

Primis Financial Corp. and Primis Bank remain well-capitalized under Basel III capital requirements. Primis Bank had a capital conservation buffer of 3.76% 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.

Current wording

Primis Bank had a capital conservation buffer of 3.88% and 3.99% as of June 30, 2026 and December 31, 2025, respectively, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions. As of June 30, 2026, we believe the Company exceeded its applicable regulatory capital requirements and the Bank was well-capitalized under the applicable PCA framework.

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, 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.

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