Primis Financial Reports Strong Adjusted Q1 Earnings Turnaround Amidst Asset Growth, But Material Weakness Persists

summarizeSummary

Primis Financial Corp. reported a strong adjusted net income turnaround and solid loan growth in Q1 2026, but faced an increase in nonperforming assets and a continued material weakness in internal controls.

check_boxKey Events

• Strong Adjusted Net Income Turnaround

  The company reported $7.3 million in net income for Q1 2026, a significant improvement compared to an adjusted net loss of $2.3 million in Q1 2025 (excluding a $25 million one-time gain from the deconsolidation of Panacea Financial Holdings).

• Net Interest Margin Expansion

  Net interest margin increased to 3.43% for the three months ended March 31, 2026, up from 3.15% in the prior year period, driven by higher average interest-earning asset balances and favorable deposit pricing.

• Solid Loan and Asset Growth

  Total assets grew by $209.3 million (5.17%) to $4.26 billion, and loans held for investment increased by $112.2 million (3.46%) to $3.35 billion from December 31, 2025, fueled by growth in the Mortgage Warehouse and Panacea divisions.

• Increase in Nonperforming Assets

  Nonperforming assets rose by $18.6 million (21.53%) to $105.2 million as of March 31, 2026, primarily due to one commercial relationship, though subsequent payments in April partially mitigated this.

auto_awesomeAnalysis

Primis Financial Corp. demonstrated a significant operational turnaround in Q1 2026, reporting $7.3 million in net income compared to an adjusted net loss of $2.3 million in Q1 2025 (excluding a one-time gain). This performance was driven by robust loan and asset growth, particularly in its Panacea Financial Division and Mortgage Warehouse segments, alongside an expansion in net interest margin. However, the quarter also saw a notable increase in nonperforming assets and, critically, the continued disclosure of a material weakness in internal controls over financial reporting. While the company's capital ratios remain strong, the persistent control weakness and rising nonperforming assets present ongoing risks that investors should monitor despite the positive earnings momentum.