8-K: Primis Financial Corp. Reports Strong Q3 2026 Results

Primis Financial Corp. announced robust third-quarter 2026 financial results, showcasing significant year-over-year growth in net income and net interest income, alongside a declared quarterly dividend.

Summary

• Primis Financial Corp. reported net income available to common shareholders of $8.7 million, or $0.35 per diluted share, for the third quarter of 2026, a notable increase from $6.8 million, or $0.28 per diluted share, in the same period of 2025.
• For the nine months ended September 30, 2026, net income was $25.4 million, or $1.03 per diluted share, down from $31.9 million, or $1.29 per diluted share, in the prior year, partly due to significant investment gains in 2025.
• Operating net income available to common shareholders for Q3 2026 was $8.7 million, up 27% year-over-year.
• Excluding non-recurring items, operating net income for the nine months ended September 30, 2026, was $22.3 million, up 211% from $7.2 million in the prior year.
• Net interest income for Q3 2026 rose 25% to $36.3 million compared to $29.0 million in Q3 2025.
• The company declared a quarterly cash dividend of $0.10 per share, payable on November 20, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with strong year-over-year growth in key metrics and a clear strategy for continued improvement despite market headwinds.

Positives

• Strong year-over-year growth in Q3 net income ($8.7M vs $6.8M) and operating net income (up 27%).
• Significant increase in net interest income, up 25% year-over-year to $36.3 million.
• Core Bank loan growth of 11% annualized in Q3 2026.
• Cost of deposits in the Core Bank decreased to 1.63% in Q3 2026 from 1.73% in Q3 2025.
• Panacea Financial saw strong loan growth (17% annualized) and deposit growth (56% year-over-year).
• Mortgage Warehouse lending showed resilience with a 53% year-over-year increase in outstanding loan balances.
• Tangible book value per common share increased by 18% year-over-year to $13.81.
• Declaration of a consistent quarterly dividend of $0.10 per share.

Negatives

• Nine-month net income available to common shareholders decreased to $25.4 million from $31.9 million in the prior year, impacted by large investment gains in 2025.
• Primis Mortgage experienced pre-tax losses of approximately $0.3 million in Q3 2026, compared to earnings of $1.9 million in Q3 2025.
• Retail mortgage pipeline reduced by 37% and revenue by $2.3 million versus Q2 2026 due to macroeconomic headwinds.
• Noninterest income decreased to $12.9 million in Q3 2026 from $22.0 million in Q2 2026.

Risks

• Instability in global economic conditions and geopolitical matters.
• Impact of current and future economic and market conditions, including seasonality, and within the financial services industry.
• Adverse developments in borrower industries.
• Changes in interest rates, inflation, loan demand, real estate values, or competition.
• Labor shortages and supply chain disruptions.
• Impact of tariffs, trade policies, and trade wars.
• Competitive pressures among financial institutions.
• Changes in applicable laws, rules, or regulations.

Future Outlook

The company's management is focused on driving continued growth and profitability through its diversified business lines, including the Core Bank, Mortgage Warehouse, Primis Mortgage, and Panacea Financial. They anticipate material operating leverage and expect to benefit from a recovery in retail mortgage volumes. Efforts are underway to close the gap in ROAA targets by making changes to adapt to lower volumes while preserving future growth potential.

Management Comments

• "The progress we have made over the past year is substantial."
• "A core margin of 3.59% with expansion of 14 basis points linked-quarter is a testament to the value of our Core Bank franchise which continues to drive slow and steady growth at attractive margins."
• "Our core earnings engine delivered a solid quarter in the face of unprecedented headwinds that reduced our retail mortgage pipeline 37% and reduced revenue by $2.3 million versus the second quarter."
• "In a steady environment for retail mortgage, we would have been at our 1.00% ROAA target this quarter as expected."
• "We are already making changes to close the gap during this period of lower volumes while preserving our ability to benefit when volumes eventually recover."

Industry Context

StockSavvy.ai notes that Primis Financial is navigating a challenging macroeconomic environment, particularly impacting the retail mortgage sector. However, the company's diversified business model, with strengths in its Core Bank, Mortgage Warehouse, and Panacea Financial divisions, appears to be providing resilience and offsetting some of these headwinds.

Comparison to Industry Standards

• The company's Q3 2026 ROAA of 0.80% is presented in the context of its own historical performance and its target of 1.00%.
• The presentation highlights that if mortgage net overhead were breakeven in Q3 2026, the consolidated ROAA would have been approximately 1.00%, suggesting a path to meeting internal targets.
• The company's tangible book value per share of $13.81 is compared to peer group averages, with an indication of potential upside if Primis reached the peer group average valuation of 1.5x Price/Tangible Book Value.
• Core Bank ROA is reported at 1.42%, which is a strong internal benchmark.
• Mortgage Warehouse loans grew 53% year-over-year, with a reported Pre-Tax Pre-Provision (PTPP) ROA of over 2%, indicating strong performance in this segment.
• Primis Mortgage funded $347 million in Q3 2026, up 13% year-over-year, and YTD funded volume of $1.1 billion is up 42% year-over-year, showing competitive performance in a difficult market.
• Panacea Financial loans grew 37% annualized from June 30, 2026, demonstrating rapid growth in this specialized segment.

Stakeholder Impact

• Shareholders: The declaration of a consistent quarterly dividend of $0.10 per share provides a direct return to shareholders. The increase in tangible book value per share also suggests an increase in underlying shareholder equity.
• Employees: While not explicitly detailed, the focus on efficiency and AI integration may lead to operational changes. The company's growth in various divisions could imply opportunities for employees.
• Customers: The company highlights its proprietary Banking Valet service, particularly for commercial customers, and its #1 ranking as a bank for doctors, indicating a focus on customer service and specialized offerings.
• Creditors: The company's capital ratios (e.g., TCE/TA of 8.14%) and deposit growth suggest a stable funding base, which is positive for creditors.

Next Steps

• Management is implementing changes to address the reduction in the retail mortgage pipeline and revenue.
• The company expects to realize approximately $3.0 million of annualized savings from vendor consolidation and statement services beginning early in 2027.
• Quarterly amortization of digital platform development costs is expected to end in Q3 2027.
• The company will continue to pursue efficiencies through AI to drive operating leverage.
• Management intends to use the Investor Presentation in future presentations to investors and other stakeholders.

Key Dates

Recommendation

Primis Financial Corp. has demonstrated strong operational performance in its core banking activities and diversified business lines, with significant year-over-year improvements in net interest income and operating net income. The company is navigating headwinds in the mortgage sector effectively, as evidenced by its resilience and strategic adjustments. However, the year-to-date decline in net income compared to the prior year, largely due to one-time investment gains in 2025, and the pre-tax losses in the mortgage segment warrant a cautious approach. The consistent dividend is a positive, but the reliance on future market recovery for mortgage operations suggests a 'hold' rating until more sustained profitability across all segments is demonstrated.

Keywords

Primis Financial, Bank, Financial Results, Third Quarter, Net Income, Net Interest Income, Dividend, Loan Growth