1. Primis Bank completes a sale-leaseback transaction on 18 branches. 2. Transaction yields a $50 million pre-tax gain, enhancing balance sheet. 3. Expected gain of $38 million post-restructuring of $1.54 per share. 4. Key financial ratios show improvement in capital and earnings. 5. Plans for future growth and enhanced borrowing capacity are in place.
FAQ
Why Very Bullish?
The transaction significantly improves FRST's tangible book value and earnings outlook, similar to historical gains seen post-restructuring by other banks.
How important is it?
The outlined changes are substantial, indicating strong potential for future performance, greatly influencing investor sentiment and market expectations.
Why Long Term?
Long-term growth supported by improved capital and operational efficiencies, following patterns of successful restructurings leading to sustained gains.
Primis Financial Corp. Announces Strategic Sale-Leaseback Transaction
Stock Symbol: FRST
Key Highlights of the Transaction
Primis Financial Corp. (NASDAQ: FRST), the parent company of Primis Bank, has announced a significant sale-leaseback transaction involving 18 branch properties. This strategic move is projected to generate a pre-tax gain of $50 million, enabling the bank to restructure its balance sheet, enhance operating earnings, and build capital for anticipated growth in 2026 and 2027.
Impact on Financials and Ratios
Following a thorough analysis, the company estimates a net gain of $38 million after taxes, translating to approximately $1.54 per share. The expected impact on key financial ratios is outlined below, reflecting an improved outlook against reported 3Q25 results:
- Return on Average Assets (ROAA): Expected to increase from 0.70% to 0.80% (up 14.3%)
- Return on Tangible Common Equity (ROTCE): Projected to rise from 9.45% to 9.61% (up 1.7%)
- Net Interest Margin: Anticipated to grow from 3.18% to 3.46% (up 8.8%)
- Efficiency Ratio: Expected to improve from 79.0% to 77.0% (down 2.5%)
- Tangible Book Value: Projected to increase from $11.71 to $13.25 (up 13.2%)
Strategic Initiatives Following the Transaction
In addition to the sale-leaseback transaction, Primis Bank plans to undertake several strategic initiatives aimed at enhancing financial position:
- Securities Portfolio Restructuring: The Bank will divest securities worth approximately $144 million at a projected pre-tax loss of $14.8 million, with expected annual earnings improvement of $4.3 million.
- Subordinated Debt Paydown: The company aims to reduce outstanding subordinated debt by around $27 million, with an anticipated pre-tax earnings improvement of $3 million.
- BOLI Restructuring: Plans to convert lower-yielding policies into higher-yielding alternatives, estimated to yield an annual earnings uplift of $1.2 million.
Comments from Leadership
Dennis J. Zember, Jr., President and CEO of Primis Financial Corp., commented, "This transaction marks the culmination of a transformative year for our company. We have successfully rebuilt our capital levels and enhanced our earnings outlook. This strategic move positions us well for 2026, providing the necessary capital to support our growth strategies."
Company Overview
As of September 30, 2025, Primis Financial Corp. holds approximately $4.0 billion in total assets, with $3.2 billion in loans and $3.3 billion in deposits. Through its subsidiary, Primis Bank, the company offers a diverse array of financial services via 24 branches in Virginia and Maryland, alongside robust online and mobile banking solutions.
Contact Information
For further inquiries, please contact:
Dennis J. Zember, Jr., President and CEOMatthew A. Switzer, EVP and CFO
Primis Financial Corp.
1676 International Drive, Suite 900
McLean, VA 22102
Phone: (703) 893-7400
Website: www.primisbank.com
Forward-Looking Statements
This article contains forward-looking statements regarding Primis Financial Corp.’s future performance and strategies. Investors are advised that these statements involve inherent risks and uncertainties that could affect actual outcomes.