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 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.

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 nine months ended September 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 nine months ended September 30, 2026, compared to the three and nine months ended September 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 September 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

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.

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 September 30, 2026, Primis had $4.3 billion in total assets, $3.5 billion in total loans held for investment, $3.5 billion in total deposits and $436 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 second 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 third 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, and PMC. The following highlights key metrics from these four areas during 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:

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, 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.

Current wording

Funding for many of our strategies (all of the above excluding the core community bank) is provided primarily by the Bank’s digital platform. 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 had approximately $1.0 billion deposits with a cost of deposits of 3.80% as of September 30, 2026. The digital platform successfully grew business accounts in 2026 with small business balances reaching $54 million as of September 30, 2026, up substantially from $16 million at December 31, 2025. Approximately 76% of our digital deposit customers have been with the Bank for at least three years.

Previous wording

We experienced strong results during the three and six months ended June 30, 2026, earning $9 million and $17 million, respectively, in net income available to common shareholders, or $0.38 and $0.68 basic and diluted earnings per common share, respectively. This compares to net income available to common shareholders of $2 million and $25 million during the three and six months ended June 30, 2025, respectively, or $0.10 and $1.01 basic and diluted earnings per common share, respectively. During the three and six months ended June 30, 2026 results included a $6 million gain on liquidation of an insurance agency investment, and during the three and six months ended June 30, 2025, results included a $7 million gain on sale of PFH shares and $32 million in sale of PFH shares and a one-time gain related to the deconsolidation of PFH, respectively. When excluding these gains from each period, income before income tax would have increased $9 million and $18 million during the three and six months ended June 30, 2026 compared to the same periods in 2025, respectively.

Current wording

We experienced strong results during the three and nine months ended September 30, 2026, earning $9 million and $25 million, respectively, in net income available to common shareholders, or $0.35 and $1.03 basic and diluted earnings per common share, respectively. This compares to net income available to common shareholders of $7 million and $32 million during the three and nine months ended September 30, 2025, respectively, or $0.28 and $1.29 basic and diluted earnings per common share, respectively. During the nine months ended September 30, 2026, results included a $6 million gain on liquidation of an insurance agency investment, and during the nine months ended September 30, 2025, results included a $7 million gain on sale of PFH shares and a $32 million one-time gain related to the deconsolidation of PFH, respectively. When excluding these gains from each period, income before income tax would have increased $24 million during the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Three-Month Comparison Net income available to common shareholders for the three months ended June 30, 2026 totaled $9 million, or $0.38 basic and diluted earnings per share, compared to $2 million, or $0.10 basic and diluted earnings per share, for the three months ended June 30, 2025. The results reflect strong growth in net interest income of $9 million driven by growth in interest income and flat interest expense. Provision for credit losses improved by $3 million due to the Consumer Program loan portfolio largely shifting to amortizing and improved delinquencies compared to the prior year and a shift in the remaining loan portfolio mix to loan categories with lower reserve requirements. We also experienced a $4 million increase in noninterest income driven by higher mortgage banking income due to growth in PMC and increased loan sale gains. These increases were offset by higher noninterest expense driven by personnel costs and occupancy expenses, the former due to growth in PMC and Mortgage Warehouse and the latter primarily a result of higher lease expense due to the sale-leaseback transaction executed in December 2025. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.

Current wording

Three-Month Comparison Net income available to common shareholders for the three months ended September 30, 2026 totaled $9 million, or $0.35 basic and diluted earnings per share, compared to $7 million, or $0.28 basic and diluted earnings per share, for the three months ended September 30, 2025. The results reflect strong growth in net interest income of $7 million driven by growth in interest income and flat interest expense. We also experienced a $1 million increase in noninterest income driven by increased loan sale gains and higher income from bank-owned life insurance. These increases were offset by higher noninterest expense driven by personnel costs and occupancy expenses, the former due to growth in PMC and Mortgage Warehouse and the latter primarily a result of higher lease expense due to the sale-leaseback transaction executed in December 2025. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.

Previous 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.

Current wording

Nine-Month Comparison Net income available to common shareholders for the nine months ended September 30, 2026 totaled $25 million, or $1.03 basic and diluted earnings per share, compared to $32 million, or $1.29 basic and diluted earnings per share, for the nine months ended September 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, net income would have increased during the nine months of September 30, 2026 compared to the same period in 2025 by approximately $14 million. Net interest income grew $21 million during the nine months of 2026 compared to the same period in 2025 due to higher interest income and flat interest expense. Noninterest income included $8 million higher mortgage banking income and $3 million higher gain on sale of loans. Noninterest expense increased by $12 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 and professional fees. 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 $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.

Current wording

Net interest income was $36 million for the three months ended September 30, 2026, compared to $29 million for the three months ended September 30, 2025. Net interest income increased primarily as a result of higher average LHFS and net loans balances in the third quarter of 2026 compared to same period in prior year along with a 25 basis point increase in rates over that time on net loans. Interest expense was $190 thousand higher in the third quarter of 2026 compared to same period in prior year due primarily to $564 thousand higher expense on $59 million higher 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. Included in interest income in the third quarter of 2026 was approximately $0.7 million of interest recoveries from a previously charged off loan. Our net interest margin for the three months ended September 30, 2026 was 3.66% or 3.59% adjusted for the interest recovery, compared to 3.18% for the three months ended September 30, 2025. Continued rebuilding of earning asset levels, which grew $315 million year-over-year, coupled with increased net loan rates and favorable deposit pricing was responsible for the improvement during the third quarter of 2026.

Previous wording

Net interest income was $66 million for the six months ended June 30, 2026, compared to $52 million for the six months ended June 30, 2025. Net interest income increased as a result of interest income increasing 15% while interest expense remained flat. Interest income increases were driven by interest earned on loans while the decline in interest expense on deposits was fully offset by an increase in interest expense on borrowings. The interest income increase was primarily a result of higher average earning assets and moderate improvement in interest rates, while interest expense was due to lower rates across all categories on higher overall average balances. Our net interest margin for the six months ended June 30, 2026 was 3.44%, compared to 3.00% for the six months ended June 30, 2025, an increase of 44 basis points.

Current wording

Net interest income was $102 million for the nine months ended September 30, 2026, compared to $81 million for the nine months ended September 30, 2025. Net interest income increased as a result of interest income increasing 15% while interest expense remained flat. Interest income increases were driven by interest earned on higher average loan balances while the decline in interest expense on deposits was offset by an increase in interest expense on borrowings. The interest income increase was primarily a result of higher average earning assets and moderate improvement in interest rates, while interest expense was due to lower rates across all categories partially offset by higher overall average balances. Our net interest margin for the nine months ended September 30, 2026 was 3.51%, compared to 3.06% for the nine months ended September 30, 2025, an increase of 45 basis points.

Previous wording

For the six months ended June 30, 2026 and 2025, we had a provision for credit losses of $7 million and $10 million, respectively. Decline in provision for credit losses for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by the same factors as described in the three month ended period related to specific provisions on commercial real estate loans being higher in the prior year than the current year. Excluding the charges on these specific loans, the provision for credit losses declined $1 million during the six months ended June 30, 2026 compared to the same period in 2025 due to improved nonperforming assets, reduction in both the overall and promotional part of the Consumer Program portfolio, and a significant portion of loan growth concentrated in certain loans requiring less reserve due to their credit characteristics.

Current wording

For the nine months ended September 30, 2026 and 2025, we had a provision for credit losses of $8 million and $10 million, respectively. The decline in provision for credit losses for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily related to higher specific provisions on commercial real estate loans in the prior year compared to the current year. Excluding the charges on these specific loans, the provision for credit losses remained stable during the nine months ended September 30, 2026 compared to the same period in 2025 due to growth in the overall portfolio, partially offset by improved nonperforming assets, reduction in both the overall and promotional portion of the Consumer Program portfolio, and a significant portion of loan growth concentrated in certain loans, primarily mortgage warehouse, requiring less reserve due to their credit characteristics.

Previous wording

Noninterest income decreased 29% to $36 million for the six months ended June 30, 2026, compared to $50 million for the six months ended June 30, 2025. The decrease in noninterest income was primarily driven by the $32 million gain on our PFH investment, which comprised of 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 quarter of 2025. The current year included a one-time $6 million gain related to liquidation of an insurance agency investment. When excluding these gains from each year we had an increase in noninterest income of $11 million, or 62%.

Current wording

Noninterest income decreased 22% to $49 million for the nine months ended September 30, 2026, compared to $62 million for the nine months ended September 30, 2025. The decrease in noninterest income was primarily driven by the $32 million gain on our PFH investment, which comprised of 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 quarters of 2025. The current year included a one-time $6 million gain related to liquidation of an insurance agency investment. When excluding these gains from each year we had an increase in noninterest income of $13 million, or 42%, for the nine months ended September 30, 2026 driven primarily by higher mortgage banking income and gains on sale of loans.

Previous wording

During the six months ended June 30, 2026 we had $9 million higher income from mortgage banking activity compared to the same period in 2025. The increase in mortgage banking was related to a 61% increase in funded loan volume and subsequent sale of a large amount of these funded loans during 2026. PMC had a 71% increase in sold loans during the six months ended 2026 compared to the same period of 2025, resulting in $6 million higher gains on sale year-over-year. Noninterest income also increased $2 million due to gains on sale of loans year-over-year due to sales of Panacea Division commercial loans and the guaranteed portion of SBA loans, both of which are expected to continue during the second half of 2026. Lastly, we experienced a $338 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.

Current wording

During the nine months ended September 30, 2026 we had $8 million higher income from mortgage banking activity compared to the same period in 2025. The increase in mortgage banking was related to a 42% increase in closed loan volume and $392 million increase in sales of loans during the nine months ended September 30, 2026 compared to the same period of 2025, resulting in $7 million higher gains on sale and $4 million of higher discount point and origination fee income year-over-year. These gains were partially offset by $3 million of mark-to-market losses on the portfolio which was primarily interest rate driven as a result of increasing 30 year mortgage rates. Noninterest income also increased $3 million due to gains on sale of loans year-over-year due to sales of Panacea Division commercial loans and the guaranteed portion of SBA loans of $114 million combined, both of which are expected to continue during the fourth quarter of 2026. Lastly, we experienced a $1 million increase in bank-owned life insurance income largely as a result of the restructure of that portfolio, which is expected to be completed in the fourth quarter of 2026. A $400 thousand death benefit gain related to bank owned life insurance and a $1 million recovery on a loan that was charged-off by a predecessor bank also contributed to an increase in noninterest income during the year.

Previous 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.

Current wording

Noninterest expenses increased 15% to $37 million during the three months ended September 30, 2026, compared to $32 million during the three months ended September 30, 2025. The increase was primarily driven by higher salaries and benefits expenses, occupancy expenses, and miscellaneous lending expenses, partially offset by lower professional fees, FDIC insurance expense, and data processing expense.

Previous 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.

Current wording

Salaries and benefits expense increased $2 million in the three months ended September 30, 2026, compared to the same period in 2025 due to the growth in PMC, the Panacea Division of the Bank, and the Mortgage Warehouse businesses in the current year.

Previous 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.

Current wording

Occupancy expenses grew $1 million during the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily as a result of increased lease expense related to the sale-leaseback transaction executed in December of 2025.

Previous wording

Occupancy expenses increased $2 million during the six months ended June 30, 2026 compared to the same period in 2025 primarily due to increased lease expense related to the sale-leaseback transaction executed in December of 2025. Most other noninterest expense categories increased modestly comparing the six months ended June 30, 2026 to the same period in 2025 primarily as a result of overall business growth as evidenced in the 11% growth in average earning and total assets year-over-year.

Current wording

Most other noninterest expense categories increased modestly comparing the three months ended September 30, 2026 to the same period in 2025 primarily as a result of overall business growth as evidenced in the 9% growth in average earning and total assets comparing the third quarter of 2026 to 2025.

Previous wording

Noninterest expenses increased 12% to $72 million during the six months ended June 30, 2026, compared to $64 million during the six months ended June 30, 2025. The increase was primarily driven by higher salaries and benefits expenses and occupancy expenses in 2026 compared to the same period in 2025. These increases were partially offset by lower data processing expenses during the six months ended June 30, 2026 compared to the same period in 2025.

Current wording

Noninterest expenses increased 13% to $109 million during the nine months ended September 30, 2026, compared to $97 million during the nine months ended September 30, 2025. The increase was primarily driven by higher salaries and benefits expenses, higher occupancy expenses and higher miscellaneous lending expenses in 2026 compared to the same period in 2025. These increases were partially offset by lower data processing expenses and lower professional fees during the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Salaries and benefits expense increased $5 million for the six months ended June 30, 2026 compared to the same period in 2025 primarily driven by the substantial growth at PMC and in the Mortgage Warehouse lending business. The 61% closed loan volume growth for PMC and 195% loan growth in Mortgage Warehouse year-over-year fueled the growth in personnel costs to support these two businesses.

Current wording

Salaries and benefits expense increased $7 million for the nine months ended September 30, 2026 compared to the same period in 2025 primarily driven by the substantial growth at PMC. The 42% closed loan volume increase for PMC year-over-year drove the growth in personnel costs, which are heavily impacted by commissions on loan originations.

Previous wording

Offsetting the increases in most of our noninterest expense categories was a decrease of $1 million in data processing expense during the six 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.

Current wording

Offsetting the increases in most of our noninterest expense categories was a decrease of $2 million in data processing expense during the nine months ended September 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 third quarter of 2025. Professional fees decreased $1 million in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to higher legal fees associated with a mortgage recruiting matter during the nine months ended September 30, 2025.

Previous 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.

Current wording

Gross LHFI were $3.5 billion and $3.3 billion as of September 30, 2026 and December 31, 2025, respectively. The increase in loans was driven by growth of mortgage warehouse loans of $184 million and Panacea Division loans of $59 million. The growth was partially offset by loan paydowns during the nine months ended September 30, 2026 of non-owner occupied commercial real estate and consumer loans. Non-owner occupied commercial real estate declined $39 million driven by paydowns across the portfolio during 2026 and consumer loans declined by $38 million driven by a $24 million decline in Consumer program loans. As of September 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 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.

Current wording

Our highest concentration of credit by loan type is in commercial real estate. As of September 30, 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 June 30, 2026 and December 31, 2025 ($ 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 commercial real estate non-owner occupied loans for the periods ended September 30, 2026 and December 31, 2025 ($ 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 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.

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. All but an immaterial amount of these have paid-off or converted to an amortization period as of September 30, 2026, with the remaining ending their promotional period before December 31, 2026.

Previous 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.

Current wording

Our allowance for credit losses was $46 million as of both September 30, 2026 and December 31, 2025. The allowance was flat during the nine 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 nine months. The provision during the nine months ended September 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, which was partially offset by a decline in provision for 1-4 family primarily due to a decline in loan balances partially offset by slightly higher loss rates and multi-family residential loans primarily due to a decline in loss rates partially offset by higher balances.

Previous 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.

Current wording

institution providing financing to the borrower. While the Consumer Program portfolio was also a driver of net charge-offs in both three and nine months ended September 30, 2026, it was down significantly from the same periods in the prior year. During the three months ended September 30, 2026 and 2025, we charged-off $500 thousand and $1 million, respectively, net of recoveries. During the nine months ended September 30, 2026 we charged-off $2 million net of recoveries compared to $17 million during the nine months ended September 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 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.

Current wording

As of September 30, 2026, the principal balance outstanding of Consumer Program loans was $69 million, inclusive of a $4 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 $9 million as of September 30, 2026. As of September 30, 2026, 94% of the outstanding principal balance was current and we had 201% 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 $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.

Current wording

AFS and HTM investment securities totaled $172 million as of September 30, 2026, a decrease of 4% 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 nine 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 nine months ended September 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 $5 million of unrealized mark-to-market adjustments due to increases in market interest rates since the original purchase of many of these securities.

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 $10 million of unrealized mark-to-market adjustments due to increases in market interest rates since the original purchase of many of these securities. Most of these

Previous 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.

Current wording

Total deposits increased by $77 million to $3.5 billion as of September 30, 2026 compared to $3.4 billion as of December 31, 2025. The mix of deposits changed during the nine months ended September 30, 2026, including an increase in savings, money market and NOW deposit balances of $144 million, offset by a decline in demand deposits and time deposit account balances of $67 million. Deposits are net of excess amounts we sweep off balance sheet to manage liquidity, but we had no net swept deposits as of both September 30, 2026 and December 31, 2025.

Previous 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.

Current wording

Approximately $1.0 billion of our total deposits at both September 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 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 $54 million at September 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, these customers remain loyal with approximately 76% of our digital deposits banking 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 $886 million, or 26% of total deposits as of June 30, 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 $882 million, or 25% of total deposits as of September 30, 2026.

Previous 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):

Current wording

The following table sets forth the average balance and average rate paid on each of the deposit categories for the nine months ended September 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 the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. As of June 30, 2026 and December 31,

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 September 30, 2026 and December 31, 2025, we had $220 million and $25 million of FHLB borrowings, respectively. The borrowings from the FHLB during the nine months ended September 30, 2026 are short-term borrowings and were obtained primarily to fund increased loan growth experienced during the year. All $220 million of short-term FHLB borrowings as of September 30, 2026 were repaid as of November 2, 2026.

Previous wording

2025, we had $300 million and $25 million FHLB borrowings, respectively. The borrowings from the FHLB during the six months ended June 30, 2026 are short-term borrowings and were obtained primarily to fund increased loan growth experienced during the year. As of June 30, 2026, we had $639 million of FHLB lines of credit, less amounts outstanding at June 30, as well as $484 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. As of June 30, 2026, our borrowing capacity under the FHLB line is $199 million based on the $300 million short-term borrowings outstanding and a $140 million letter of credit issued as collateral for public deposits held by the bank.

Current wording

As of September 30, 2026, we had $660 million of FHLB lines of credit, less amounts outstanding at September 30, as well as $523 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. As of September 30, 2026, our borrowing capacity under the FHLB line is $300 million based on the $220 million short-term borrowings outstanding and a $140 million letter of credit issued as collateral for public deposits held by the bank.

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 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.

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 $574 thousand and $2 million less interest expense during the three and nine months ended September 30, 2026 compared to the same period in 2025, respectively.

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 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.

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 generally applicable risk-based capital adequacy guidelines we and the Bank must meet specific capital guidelines. Further, Primis Bank must meet certain capital minimums under the prompt corrective action (“PCA”) framework in order to be considered “well capitalized.”

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

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 nine months ended September 30, 2026. 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 third quarter of 2026.