Primis Financial Soars on Panacea Investment Gain, Credit Quality Improves

Ticker: FRST · Form: 10-Q · Filed: Nov 10, 2025 · CIK: 1325670

Primis Financial CORP. 10-Q Filing Summary
FieldDetail
CompanyPrimis Financial CORP. (FRST)
Form Type10-Q
Filed DateNov 10, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Key Dollar Amounts$0.01
Sentimentbullish

Sentiment: bullish

Topics: Regional Banking, Financial Performance, Investment Gains, Credit Quality, Noninterest Income, Panacea Financial, Asset Growth

TL;DR

**FRST is a buy; the Panacea investment gain and improved credit quality signal strong momentum despite interest income headwinds.**

AI Summary

Primis Financial Corp. (FRST) reported a significant turnaround for the nine months ended September 30, 2025, with net income attributable to common stockholders soaring to $31.903 million, a substantial increase from $7.130 million in the prior year period. This was largely driven by a remarkable surge in noninterest income, which jumped from $30.441 million in 2024 to $62.334 million in 2025, primarily due to a $32.322 million gain on its Panacea Financial Holdings investment. Net interest income also saw a modest increase to $80.576 million from $78.145 million. The company recorded a recovery of credit losses of $49 thousand for the three months ended September 30, 2025, a stark contrast to a $7.511 million provision in the same period of 2024, indicating improved asset quality. Total assets grew to $3.954 billion from $3.690 billion at December 31, 2024, with loans held for investment increasing to $3.184 billion from $2.870 billion. However, total interest and dividend income decreased to $147.116 million from $159.656 million, while total interest expense also declined to $66.540 million from $81.511 million, reflecting a dynamic interest rate environment. The deconsolidation of Panacea Financial Holdings, Inc. on March 31, 2025, and the subsequent gain on investment, significantly impacted the financial results.

Why It Matters

This filing reveals a strong performance for Primis Financial, largely propelled by a strategic gain from its Panacea Financial Holdings investment, which significantly boosted noninterest income. For investors, the substantial increase in net income and EPS to $1.29 signals improved profitability and potential for future growth, especially as the company navigates a challenging interest rate environment. The reduction in the provision for credit losses suggests a healthier loan portfolio, which is a positive for risk-averse investors. In a competitive banking landscape, Primis's ability to leverage its investment in specialized financial services like Panacea Financial (for healthcare professionals) demonstrates a strategic edge, potentially attracting a niche customer base and differentiating itself from larger, more generalized banks. This could lead to increased market share and sustained growth.

Risk Assessment

Risk Level: medium — While net income surged due to the Panacea investment gain, the company experienced a decrease in total interest and dividend income from $159.656 million in the nine months ended September 30, 2024, to $147.116 million in the same period of 2025. This indicates potential pressure on core banking profitability. Additionally, noninterest expenses increased to $96.771 million from $88.279 million, which could erode future earnings if not managed effectively.

Analyst Insight

Investors should consider Primis Financial Corp. (FRST) as a potential growth opportunity, given the significant boost from the Panacea Financial Holdings investment and improved credit quality. Monitor future net interest income trends closely, as a decline in this core revenue stream could signal underlying challenges despite the one-time gain. Evaluate the company's strategy for sustained noninterest income growth post-Panacea deconsolidation.

Financial Highlights

debt To Equity
N/A
revenue
$142.910M
operating Margin
N/A
total Assets
$3.954B
total Debt
$3.573B
net Income
$31.903M
eps
$1.29
gross Margin
N/A
cash Position
$63.881M
revenue Growth
+38.1%

Revenue Breakdown

SegmentRevenueGrowth
Net Interest Income$80.576M+3.1%
Total Noninterest Income$62.334M+104.8%

Key Numbers

Key Players & Entities

FAQ

What were Primis Financial Corp.'s net income and EPS for the nine months ended September 30, 2025?

Primis Financial Corp. reported net income attributable to common stockholders of $31.903 million for the nine months ended September 30, 2025, a significant increase from $7.130 million in the prior year. Diluted earnings per share (EPS) for the same period was $1.29, up from $0.29 in 2024.

How did the Panacea Financial Holdings investment impact Primis Financial's results?

The investment in Panacea Financial Holdings, Inc. significantly boosted Primis Financial's noninterest income, contributing $32.322 million in gains for the nine months ended September 30, 2025. Panacea Financial Holdings, Inc. was deconsolidated from the Company on March 31, 2025.

What was the trend in Primis Financial's net interest income?

Primis Financial's net interest income increased to $80.576 million for the nine months ended September 30, 2025, up from $78.145 million in the same period of 2024. However, total interest and dividend income decreased from $159.656 million to $147.116 million.

Did Primis Financial's credit quality improve in Q3 2025?

Yes, Primis Financial's credit quality showed improvement, evidenced by a recovery of credit losses of $49 thousand for the three months ended September 30, 2025. This is a positive shift compared to a provision for credit losses of $7.511 million in the same period of 2024.

What were Primis Financial's total assets and loans held for investment as of September 30, 2025?

As of September 30, 2025, Primis Financial Corp.'s total assets stood at $3.954 billion, an increase from $3.690 billion at December 31, 2024. Loans held for investment also grew to $3.184 billion from $2.870 billion over the same period.

How did Primis Financial's noninterest expenses change?

Total noninterest expenses for Primis Financial increased to $96.771 million for the nine months ended September 30, 2025, compared to $88.279 million for the same period in 2024. This increase was primarily driven by higher salaries and benefits, which rose to $53.524 million from $48.587 million.

What is Primis Financial Corp.'s current dividend per share?

Primis Financial Corp. paid dividends on common stock of $0.10 per share for the three months ended September 30, 2025, totaling $2.464 million. For the nine months ended September 30, 2025, total dividends paid were $0.30 per share, amounting to $7.409 million.

What is the significance of the deconsolidation of Panacea Financial Holdings, Inc. for Primis Financial?

The deconsolidation of Panacea Financial Holdings, Inc. on March 31, 2025, means that its operating results are no longer included in Primis Financial's consolidated results after that date. This event also led to a significant one-time gain on the Panacea Financial Holdings investment, boosting noninterest income.

Where does Primis Financial Corp. operate its branches?

As of September 30, 2025, Primis Bank, a subsidiary of Primis Financial Corp., operated 24 full-service branches across Virginia and Maryland. The company also provides services through online and mobile applications.

What are the key risks identified in Primis Financial's 10-Q filing?

While the filing highlights positive financial performance, a key risk is the decrease in total interest and dividend income from $159.656 million in 9M 2024 to $147.116 million in 9M 2025, indicating potential pressure on core banking revenue. Additionally, rising noninterest expenses, up to $96.771 million from $88.279 million, could impact future profitability.

Risk Factors

Industry Context

Primis Financial Corp. operates within the community banking sector, characterized by a focus on local markets and relationship-based lending. The industry is currently navigating a dynamic interest rate environment, which impacts net interest margins and investment strategies. Increased competition from larger institutions and fintech companies necessitates a strong focus on operational efficiency and customer service.

Regulatory Implications

As a financial institution, Primis is subject to stringent regulatory oversight from bodies like the Federal Reserve and FDIC. Compliance with capital adequacy, liquidity requirements, and consumer protection laws is paramount. Changes in regulatory frameworks, particularly concerning capital or lending standards, could impact operations and profitability.

What Investors Should Do

  1. Monitor the sustainability of noninterest income.
  2. Analyze trends in net interest margin.
  3. Evaluate credit quality trends.
  4. Assess the impact of strategic investments and divestitures.

Key Dates

Glossary

Provision for (Recovery of) Credit Losses
An accounting charge or credit reflecting the expected losses in a loan portfolio. A provision increases expenses, while a recovery decreases them. (The shift from a significant provision in 2024 to a recovery in 2025 indicates improved asset quality and a positive impact on net income.)
Noninterest Income
Revenue generated by a financial institution from sources other than net interest income, such as fees, service charges, and investment gains. (The substantial increase in noninterest income, largely due to an investment gain, was a primary driver of the company's improved profitability in 2025.)
Deconsolidation
The process of removing a subsidiary or other entity from a parent company's consolidated financial statements. (The deconsolidation of Panacea Financial Holdings, Inc. led to the recognition of a significant gain on the remaining investment.)
Loans Held for Investment
Loans originated and held on the balance sheet for the purpose of generating interest income and principal repayment over their expected life. (This category represents the core lending business, and its growth to $3.184B indicates expansion in the company's primary revenue-generating asset.)
Allowance for Credit Losses
A contra-asset account that reduces the carrying amount of loans to their estimated net realizable value, reflecting expected credit losses. (The decrease in the allowance from $53.724M at Dec 31, 2024, to $44.766M at Sep 30, 2025, aligns with the reported recovery of credit losses.)

Year-Over-Year Comparison

Primis Financial Corp. has demonstrated a significant turnaround in the nine months ended September 30, 2025, compared to the same period in 2024. Revenue, calculated as Net Interest Income plus Total Noninterest Income, increased by 38.1% to $142.910M, primarily fueled by a 104.8% surge in noninterest income driven by an investment gain. Net income attributable to common stockholders saw a dramatic increase of 347%, reaching $31.903M, with diluted EPS rising from $0.29 to $1.29. A key improvement is the reversal of credit loss provisions, moving from a $7.511M expense in 2024 to a $49K recovery in 2025, indicating enhanced asset quality. Total assets grew by 7.1% to $3.954B, with loans held for investment increasing by 11% to $3.184B.

Filing Stats: 4,472 words · 18 min read · ~15 pages · Grade level 20 · Accepted 2025-11-10 16:32:03

Key Financial Figures

Filing Documents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

- Financial Statements

Item 1 - Financial Statements 4 Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 4 Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 5 Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 6 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 7 Notes to Unaudited Condensed Consolidated Financial Statements 8

- Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 46

– Quantitative and Qualitative Disclosures about Market Risk

Item 3 – Quantitative and Qualitative Disclosures about Market Risk 77

– Controls and Procedures

Item 4 – Controls and Procedures 79

- OTHER INFORMATION

PART II - OTHER INFORMATION

– Legal Proceedings

Item 1 – Legal Proceedings 80

– Risk Factors

Item 1A – Risk Factors 80

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 80

– Defaults Upon Senior Securities

Item 3 – Defaults Upon Senior Securities 80

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 81

– Other Information

Item 5 – Other Information 81

- Exhibits

Item 6 - Exhibits 82

Signatures

Signatures 84 2 Table of Contents GLOSSARY OF ACRONYMS AND DEFINED TERMS In this Quarterly Report on Form 10-Q, except as otherwise indicated or the context suggests otherwise, references to the "Company" refers to Primis Financial Corp., and the terms "Primis", "we", "us" and "our" refer to the Company and its subsidiaries, including Primis Bank, which we refer to as "Primis Bank" or the "Bank." "PMC" refers to Primis Mortgage Company, a residential mortgage lender headquartered in Wilmington, North Carolina, a consolidated subsidiary of Primis Bank. "PFH" refers to Panacea Financial Holdings, Inc., headquartered in Little Rock, Arkansas, which owns the rights to the Panacea Financial brand and its intellectual property and partners with the Bank to offer a suite of financial products and services for doctors, their practices, and the broader healthcare industry. ACL Allowance for credit losses AFS Available-for-sale ALCO Asset-Liability Committee ASC Accounting Standards Codification ASU Accounting Standards Update Basel III Basel Committee's 2010 Regulatory Capital Framework CECL Current expected credit losses CEO Chief Executive Officer CFO Chief Financial Officer DEI Diversity, equity and inclusion Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act EPS Earnings per share ESG Environmental, social and governance EVE Economic value of equity FASB Financial Accounting Standards Board FDIC Federal Deposit Insurance Corporation FHLB Federal Home Loan Bank of Atlanta FRB Federal Reserve Bank FOMC Federal Open Market Committee FVO Fair value option GAAP U.S. generally accepted accounting principles HTM Held-to-maturity IRLC Interest rate lock commitments LHFI Loans held for investment LHFS Loans held for sale NII Net interest income NASDAQ National Association of Securities Dealers Automated Quotations PCA Prompt corrective action PCD Purchased credit deteriorate

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

- FINANCIAL STATEMENTS

ITEM 1 - FINANCIAL STATEMENTS PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED BALANCE SHEETS ( dollars in thousands, except per share amounts) September 30, December 31, 2025 2024 (unaudited) ASSETS Cash and cash equivalents: Cash and due from financial institutions $ 7,692 $ 8,059 Interest-bearing deposits in other financial institutions 56,189 56,446 Total cash and cash equivalents 63,881 64,505 Securities available-for-sale, at fair value (amortized cost of $ 252,991 and $ 262,632 , respectively) 234,660 235,903 Securities held-to-maturity, at amortized cost (fair value of $ 8,037 and $ 8,602 , respectively) 8,550 9,448 Loans held for sale, at fair value 148,781 83,276 Loans held for sale, at lower of cost or market 53,591 163,832 Total loans held for sale 202,372 247,108 Loans held for investment, collateralizing secured borrowings 15,476 17,287 Loans held for investment 3,184,758 2,870,160 Less: allowance for credit losses ( 44,766 ) ( 53,724 ) Net loans 3,155,468 2,833,723 Stock in Federal Reserve Bank and Federal Home Loan Bank 17,035 13,037 Bank premises and equipment, net 19,380 19,432 Assets held for sale 775 5,497 Operating lease right-of-use assets 9,427 10,279 Cloud computing arrangement assets, net 6,017 8,065 Goodwill 93,459 93,459 Intangible assets, net 43 665 Bank-owned life insurance 68,504 67,184 Deferred tax assets, net 17,328 26,466 Consumer Program derivative asset 409 4,511 Investment in Panacea Financial Holdings, Inc. common stock 6,880 — Other assets 50,661 50,833 Total assets $ 3,954,849 $ 3,690,115 LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing demand deposits $ 489,728 $ 438,917 Interest-bearing deposits: NOW accounts 831,709 817,715 Money market accounts 737,634 798,506 Savings accounts 958,416 775,719 Time deposits 318

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