8-K: Primis Financial Corp. Reports Strong Q2 2026 Results, Declares Dividend

Primis Financial Corp. announced robust second quarter 2026 financial results, with net income available to common shareholders soaring to $9.4 million, or $0.38 per diluted share, and declared a quarterly cash dividend of $0.10 per share.

Summary

• Primis Financial Corp. reported strong financial performance for the second quarter of 2026, with net income available to common shareholders reaching $9.4 million, or $0.38 per diluted share, a significant increase from $2.4 million, or $0.10 per diluted share, in the same quarter of 2025.
• For the first six months of 2026, net income available to common shareholders was $16.7 million, or $0.68 per diluted share, compared to $25.1 million, or $1.01 per diluted share, in the first six months of 2025.
• The company highlighted improvements in key metrics such as Return on Average Assets (ROAA) climbing to 0.90% in Q2 2026 from 0.26% in Q2 2025, and Net Interest Margin improving to 3.45% from 2.86% year-over-year.
• Primis Bank's Core Bank division showed stable profitability with a loan pipeline of $158 million, up 28% from the previous quarter, and a cost of deposits at 1.60%.
• Primis Mortgage saw closed volume of $421 million in Q2 2026, up 30% year-over-year, with pre-tax earnings of $2.2 million.
• Mortgage Warehouse lending experienced substantial growth, with outstanding loan balances reaching $544 million, up 195% from Q2 2025.
• Panacea Financial continued its strong growth, with loans outstanding of $617 million and customer deposits totaling $169 million, up 52% year-over-year.
• The company announced a core consolidation initiative expected to yield $6.1 million in earnings enhancements through revenue and expense improvements, beginning in late 2026.
• A quarterly cash dividend of $0.10 per share was declared, payable on August 21, 2026, marking Primis' fifty-ninth consecutive quarterly dividend.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a positive report, with significant year-over-year improvements in key profitability metrics and strong growth across several business segments, despite some noted increases in expenses and provisions.

Positives

• Net income available to common shareholders increased significantly to $9.4 million in Q2 2026 from $2.4 million in Q2 2025.
• Diluted earnings per share rose to $0.38 in Q2 2026 from $0.10 in Q2 2025.
• Return on Average Assets (ROAA) improved to 0.90% in Q2 2026 from 0.26% in Q2 2025.
• Net Interest Margin expanded to 3.45% in Q2 2026 from 2.86% in Q2 2025.
• Core Bank loan pipeline increased by 28% to $158 million.
• Primis Mortgage pre-tax earnings were $2.2 million in Q2 2026, a substantial increase from $0.1 million in Q2 2025.
• Mortgage Warehouse loan balances grew by 195% year-over-year to $544 million.
• Panacea Financial deposits increased by 52% year-over-year to $169 million.
• Tangible Book Value per Share increased by 19.5% to $13.72 from $11.48 year-over-year.
• The company declared a quarterly cash dividend of $0.10 per share, maintaining its streak of consecutive dividends.

Negatives

• Net income available to common shareholders for the six months ended June 30, 2026, decreased to $16.7 million from $25.1 million in the same period of 2025.
• The company recorded a provision for credit losses of $5.5 million in Q2 2026, with approximately $5.3 million related to specific reserve additions for one nonaccrual credit.
• Core net charge-offs as a percentage of average loans increased to 0.53% in Q2 2026 from 0.15% in Q2 2025.
• Noninterest expense increased to $38.2 million in Q2 2026 from $31.9 million in Q2 2025.
• The company recognized a $0.9 million settlement for a lawsuit regarding mortgage recruiting.
• FHLB advances increased significantly to $300 million from $25 million at the end of 2025.

Risks

• Instability in global economic conditions and geopolitical matters.
• Impact of current and future economic and market conditions, including seasonality, in 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 increasing significantly.
• Changes in applicable laws, rules, or regulations.

Future Outlook

The company anticipates substantial earnings enhancements from its core consolidation initiative, with improvements expected to begin in late 2026 and be fully implemented in early 2027, totaling $6.1 million from revenue and expense improvements. The company also expects to increase SBA gain on sale income to between $500 thousand to $600 thousand from the Core Bank beginning in the third quarter of 2026. The effective tax rate is expected to be approximately 22% for the rest of 2026.

Management Comments

• "We delivered another quarter of improving results and continued momentum. Our ROA climbed to 0.90% in the second quarter, more than three times where it was a year ago."
• "Just as noteworthy, NPAs declined by 37% during the quarter and our allowance to NPAs increased to 73%."
• "Lastly, as discussed later in this press release, we have identified substantial earnings enhancements related to our announcement to convert the entire bank to our digital, real-time core. The total earnings impact of $6.1 million is equally centered on revenue and expense improvements and should be incrementally in place beginning in the fourth quarter of 2026."
• "This project will afford us another year of the superior operating leverage that we have been demonstrating while putting the entire bank on the most sales focused real time core available in our industry."

Industry Context

StockSavvy.ai notes that Primis Financial Corp.'s Q2 2026 results reflect a strong performance in a competitive banking environment, particularly with its focus on digital transformation and specialized lending divisions like Mortgage Warehouse and Panacea Financial. The company's ability to grow net interest margin and control deposit costs, while expanding loan portfolios in key areas, aligns with broader industry trends of leveraging technology for efficiency and targeted growth.

Comparison to Industry Standards

• Primis Financial's Q2 2026 ROAA of 0.90% significantly outperforms the average ROAA for U.S. banks in the $1B-$10B asset size range, which typically hovers around 1.00-1.20% (though this can fluctuate based on economic conditions).
• The Net Interest Margin of 3.45% is competitive, with many regional banks reporting margins in the 3.00%-3.50% range, depending on their asset mix and funding costs.
• The growth in Mortgage Warehouse lending (195% YoY) is exceptionally strong and likely outpaces the broader industry's growth in this segment, which has seen varied performance due to interest rate fluctuations.
• Panacea Financial's deposit growth of 52% YoY is a standout performance, indicating successful penetration in its target market (healthcare professionals) compared to more moderate deposit growth seen by many community banks.
• The company's stated goal of achieving a 1.0% ROAA in 2026, as mentioned in the investor presentation, would place it at the higher end of performance for its peer group.

Legal Proceedings

• A $0.9 million settlement was recognized for a nuisance lawsuit regarding mortgage recruiting.

Stakeholder Impact

• Shareholders: Benefit from a declared quarterly dividend of $0.10 per share and potential for increased share value due to improved financial performance and future outlook.
• Employees: Potential for continued job security and growth opportunities given the company's expansion and focus on digital transformation and AI deployment.
• Customers: Benefit from enhanced digital services and potentially improved product offerings resulting from the core consolidation initiative.
• Creditors: The company's strong capital ratios and improved profitability suggest continued ability to meet debt obligations.

Next Steps

• Management will host a conference call to discuss second quarter results on July 24, 2026.
• Core consolidation initiative to begin yielding earnings enhancements in late 2026 and be fully implemented in early 2027.
• Increase SBA gain on sale income from the Core Bank beginning in Q3 2026.
• Continue deploying artificial intelligence tools for productivity improvements.

Key Dates

Recommendation

While the Q2 2026 results show significant year-over-year improvements and strong growth in key segments, the decrease in year-to-date net income compared to 2025, increased provisions for credit losses, and rising noninterest expenses warrant a cautious approach. The positive outlook from the core consolidation is promising, but its full impact is not yet realized. Therefore, a 'hold' recommendation is appropriate pending further evidence of sustained performance and successful integration of strategic initiatives.

Keywords

Primis Financial, Bank Earnings, Q2 2026 Results, Net Income, Dividend, Net Interest Margin, Loan Portfolio, Deposit Growth