8-K: Primis Financial Posts Strong Q4 2025 Earnings, Declares Dividend

Primis Financial Corp. reported a significant turnaround in Q4 2025, achieving $30 million in net income and declaring a $0.10 per share quarterly dividend.

Summary

• Net income available to common shareholders for Q4 2025 was $30 million, or $1.20 per diluted share, a substantial improvement from a net loss of $23 million, or a loss of $0.94 per diluted share, in Q4 2024.
• For the full year 2025, net income available to common shareholders reached $61 million, or $2.49 per diluted share, compared to a net loss of $16 million, or a loss of $0.66 per diluted share, in 2024.
• Total Assets grew 10% year-over-year to $4.047 billion as of December 31, 2025.
• Gross Loans Held for Investment (HFI) increased 14% year-over-year to $3.284 billion.
• Total Deposits rose 7% year-over-year to $3.396 billion.
• Net Interest Income for Q4 2025 was $31 million, an 18% increase compared to Q4 2024.
• Net Interest Margin improved to 3.28% in Q4 2025, up 38 basis points from Q4 2024.
• Tangible Book Value per Share increased 28% year-over-year to $13.34.
• Noninterest Bearing Deposits (NIB) grew 26% year-over-year to $554 million, representing 16.3% of total deposits.
• A quarterly cash dividend of $0.10 per share was declared, marking the company's fifty-seventh consecutive quarterly dividend.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a very positive report, highlighting a significant turnaround in profitability, strong growth across key business segments, and improved capital metrics, positioning the company well for future performance.

Positives

• Achieved a significant turnaround from a net loss of $23 million in Q4 2024 to net income of $30 million in Q4 2025, demonstrating robust profitability.
• Tangible Book Value per Share increased by a strong 28% year-over-year to $13.34, indicating improved capital levels and shareholder value.
• Net Interest Income grew 18% year-over-year to $31 million, driven by effective earning asset management and favorable deposit pricing.
• Net Interest Margin expanded by 38 basis points year-over-year to 3.28%, reflecting improved profitability on lending activities.
• Noninterest Bearing Deposits increased 26% year-over-year to $554 million, enhancing funding stability and reducing cost of funds.
• Primis Mortgage closed volume surged 84% year-over-year to $378 million in Q4 2025, turning a pre-tax loss into a $1.4 million profit.
• Mortgage Warehouse outstanding loan balances dramatically increased 398% year-over-year to $318 million, with average balances up 812% year-over-year.
• Panacea Financial's loans grew 25% year-over-year to $544 million and deposits increased 39% year-over-year to $128 million, demonstrating strong growth in the healthcare banking segment.
• The digital platform successfully maintained $1.0 billion in deposits while reducing its cost of deposits from 4.72% in December 2024 to 3.79% in December 2025.
• Provision for credit losses significantly decreased to $2.4 million in Q4 2025 from $33 million in Q4 2024, indicating improved asset quality.
• Core net charge-offs remained at nominal levels of 5 basis points, flat with the prior year period.
• The consumer loan program's full deferral balances are expected to be immaterial after the first half of 2026, reducing a source of past volatility.
• Strong capital ratios, with Tangible Common Equity to Tangible Assets at 8.33% and Common Equity Tier 1 Capital Ratio at 9.53%.

Negatives

• Incurred a $15 million loss on investment portfolio restructuring in Q4 2025.
• Noninterest expense increased to $42 million in Q4 2025 from $38 million in Q4 2024, partly due to non-recurring items.
• Yield on earning assets declined slightly by one basis point quarter-over-quarter and five basis points year-over-year.
• FHLB advances increased to $25 million at December 31, 2025, from no advances at December 31, 2024.

Risks

• Instability in global economic conditions and geopolitical matters.
• Impact of current and future economic and market conditions, including seasonality, and in the financial services industry.
• Adverse developments in borrower industries.
• Changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortages and supply chain disruptions.
• Impact of tariffs, trade policies, and trade wars.
• Ability to implement various strategic and growth initiatives, including Panacea Financial Division, digital banking platform, V1BE fulfillment service, Mortgage Warehouse division, and Primis Mortgage Company.
• Competitive pressures among financial institutions increasing significantly, including as a result of technological changes and the use of artificial intelligence.
• Changes in applicable laws, rules, or regulations, including legislative, regulatory or supervisory actions related to 'de-banking'.
• Changes in management's plans for the future.
• Credit risk associated with lending activities.
• Changes in accounting principles, policies, or guidelines.
• Adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions.
• Potential impacts of adverse developments in the banking industry, including impacts on customer confidence, deposit outflows, liquidity, and the regulatory response thereto.
• Potential increases in the provision for credit losses.
• Ability to identify and address increased cybersecurity risks, including those impacting vendors and other fourth parties.
• Fraud or misconduct by internal or external actors, which may not be preventable, detectable, or mitigable.
• Acts of God or of war or other conflicts, civil unrest, acts of terrorism, pandemics, or other catastrophic events that may affect general economic conditions.
• Action or inaction by the federal government, including as a result of any prolonged government shutdown.

Future Outlook

The company is positioned for robust full-year profitability in 2026. It expects to onboard its first V1BE licensing customer in 2026 and begin flow loan sales for Panacea in Q1 2026. Noninterest income is anticipated to improve by approximately $1.2 million annually starting late in Q2 2026 due to bank-owned life insurance portfolio restructuring. Legal fees related to a mortgage recruiting lawsuit are expected to normalize in 1H 2026. Management believes a quarterly core operating expense burden of $23 million to $24 million is achievable in 2026, driving substantial operating leverage. Full deferral balances in the consumer loan program are projected to be immaterial after 1H 2026, and the company plans to augment Mortgage Warehouse growth through larger top-tier lines and MSR relationships throughout 2026. An achievable 1.0% Return on Average Assets (ROAA) is targeted for 2026.

Management Comments

• Dennis J. Zember, Jr., President and CEO, stated: "We spent 2025 harvesting some of the embedded gains on our balance sheet and used those gains to reposition the Company for 2026 and beyond. We rebuilt capital levels and tangible book value and eliminated the noise and excess exposure to the consumer loan portfolio. But the year was more about offense than defense, which is reflected in a substantial increase in earning assets and the portion funded with non-interest bearing demand deposits. The core bank along with all of our divisions had the best year in the last decade and are prepared to continue that momentum into 2026."

Industry Context

StockSavvy.ai notes that Primis Financial Corp.'s strong performance in Q4 2025, particularly its significant turnaround in net income and growth in key banking segments like mortgage and healthcare lending (Panacea), positions it favorably against broader industry trends. The focus on proprietary technology (V1BE) and digital platforms for deposit growth aligns with the increasing digitalization of banking services, potentially offering a competitive edge in attracting and retaining commercial clients and national funding. The reduction in FHLB borrowings and growth in non-interest bearing deposits also indicates a strengthening funding profile, a critical factor in a dynamic interest rate environment.

Comparison to Industry Standards

• Primis's Q4 2025 diluted EPS of $1.20 and full-year EPS of $2.49 represent a significant turnaround from losses in the prior year, outperforming many regional banks that have struggled with net interest margin compression and credit quality issues.
• The 28% year-over-year increase in tangible book value per share to $13.34 is robust, indicating strong capital generation and balance sheet health, which compares favorably to peers that may be experiencing slower tangible book value growth due to asset quality concerns or slower earnings.
• The company's Price/Tangible Book of 1.01x as of January 27, 2026, is below the peer group average of 1.31x, suggesting a potential undervaluation relative to comparable regional banks such as CFFI, FRBA, MVBF, BRBS, JMSB, CARE, MPB, CCNE, SFST, PFIS, BWFG, SHBI, HTB, CBAN, SMBK, ACNB, ORRF, MCBS, CCBG, and CHCO.
• Similarly, the Price/2026 Estimated EPS of 7.94x is also below the peer group average, indicating a potentially attractive entry point compared to peers including CARE, BCBP, CCNE, PFIS, ORRF, CBAN, MCBS, FRBA, BWFG, MPB, SHBI, ACNB, MNSB, SFST, SMBK, JMSB, FCBC, HTB, CCBG, CHCO, and MVBF.
• The core bank's cost of deposits at 1.59% in Q4 2025 is competitive, especially given the current rate environment, and its low concentration of investor CRE (26% of total loans, 200% of regulatory capital) suggests a more conservative lending profile compared to some regional banks with higher CRE exposure.

Legal Proceedings

• The company incurred $1.1 million in legal fees associated with a mortgage recruiting lawsuit in Q4 2025, which management expects to normalize in the first half of 2026.

Stakeholder Impact

• Shareholders are positively impacted by the significant increase in net income, tangible book value per share, and continued quarterly dividend payments, with potential for increased shareholder value through operating leverage and strategic growth.
• Employees may see positive impacts from growth in divisions like Mortgage Warehouse and Panacea, potentially leading to more opportunities, and experienced higher compensation expense in Q4 2025 tied to improved operating results.
• Customers benefit from enhanced services through proprietary technology like V1BE and specialized offerings from Panacea Financial (healthcare professionals) and Primis Mortgage, with the digital platform offering safe and functional deposit accounts.
• Creditors are positively impacted by improved financial health, capital levels, and reduced provision for credit losses, suggesting stronger creditworthiness, and the redemption of subordinated debt reduces leverage.

Next Steps

• Redeem $27 million of subordinated debt on January 31, 2026.
• Implement enhancements to make V1BE easier to license to other banks, with the first customer expected onboard in 2026.
• Begin flow loan sales for Panacea in Q1 2026.
• Mortgage recruiting lawsuit legal fees expected to normalize in the first half of 2026.
• Restructuring of bank-owned life insurance portfolio anticipated to improve noninterest income by approximately $1.2 million annually beginning late in the second quarter of 2026.
• Management believes quarterly core operating expense burden of $23 million to $24 million in 2026 is achievable.
• Consumer loan program full deferral balances will be at immaterial levels after 1H 2026.
• Augment Mortgage Warehouse growth with larger top-tier lines and MSR relationships through 2026.

Key Dates

Recommendation

The company has demonstrated a remarkable turnaround in profitability, moving from significant losses to strong net income and EPS growth year-over-year. Key financial metrics like tangible book value per share, net interest income, and net interest margin have shown substantial improvement. Strategic initiatives in specialized lending (Panacea, Mortgage Warehouse) and digital banking are driving diversified growth and deposit acquisition. The reduction in credit loss provisions and the normalization of the consumer loan portfolio further de-risk the balance sheet. Despite these strong results and positive outlook for 2026, the company's valuation metrics (Price/Tangible Book, Price/2026 EPS) remain below peer averages, indicating significant upside potential for investors.

Keywords

Primis Financial Corp, FRST, Q4 2025 Earnings, Financial Results, Bank, Banking, Net Income, EPS, Dividends, Deposits, Loans, Net Interest Margin, Tangible Book Value, Mortgage, Panacea Financial, Digital Banking, V1BE, Mortgage Warehouse, SEC Filing, 8-K