1. Primis reported Q2 2025 net income of $8.4 million, a significant increase. 2. Mortgage volumes rose 52% to $323 million due to construction-to-permanent loans. 3. Operating expenses expected to decline $1.5 million from cost reductions. 4. Dividends were declared at $0.10 per share, continuing steady payouts. 5. Noninterest income dropped to $18 million but included a $7.4 million gain from investments.
Improved profitability and projected expense cuts could enhance shareholder value, similar to past trends during market recovery phases.
The strong earnings report and dividend declaration are pivotal, indicating financial health and profitability that directly influence stock value.
The company's strategic initiatives and profitability improvements suggest sustainable growth, positively influencing long-term investor confidence.
MCLEAN, Va., July 24, 2025 /PRNewswire/ -- Primis Financial Corp. (NASDAQ: FRST) ("Primis" or the "Company"), and its wholly-owned subsidiary, Primis Bank (the "Bank"), today reported net income available to common shareholders of $8.4 million, or $0.34 per diluted share, for the quarter ended June 30, 2025, compared to $3.4 million, or $0.14 per diluted share, for the quarter ended June 30, 2024.
For the six months ended June 30, 2025, the Company reported net income available to common shareholders of $31.1 million, or $1.26 per diluted share, compared to a net income available to common shareholders of $5.9 million or $0.24 per diluted share, for the six months ended June 30, 2024.
Operating results in the quarter clearly point to improved profitability and momentum on key areas but included positive and negative items that management expects to not reflect going forward. Significant items occurring during the quarter were:
Commenting on the quarter, Dennis J. Zember, Jr., President and Chief Executive Officer, stated, "We are pleased with the progress we have made in rebuilding our balance sheet for higher sustained earnings as we enter the second half of 2025. The core bank is maximizing profitability with its enviable core deposit base while pursuing moderate growth. At the same time, mortgage warehouse and Panacea are executing on their tremendous growth potential while non-core portfolios run off."
As discussed below, the second quarter was impacted by the last sizable portion of Consumer Program interest reversals and higher expenses that aren't expected to continue. Adjusting for those items and the PFH gain, our run-rate pre-tax pre-provision earnings were approximately $8.4 million in the second quarter. Mortgage profitability was lower due to increasing construction to perm lending that is highly profitable but has a lag until revenue materializes. In the second quarter, the value of that production was approximately $0.9 million pre-tax assuming conservative gain on sale margins. Lastly, we are close to executing on our plan to reduce technology costs and anticipate the savings to begin late in the third quarter of 2025. Along with the end of our core deposit amortization in June, our expected reduction in quarterly expenses is approximately $1.5 million. In total, we believe we have visibility to pre-tax pre-provision earnings of $10.5 to $11 million before the benefits of the profitable growth and balance sheet repricing we have in front of us."
As discussed in previous quarters, the Company spent substantial time and energy in 2024 focusing the organization on its core bank and lines of business that drive premium operating results. The second quarter of 2025 demonstrated progress in key areas that are expected to continue and build through the rest of the year and into 2026. The following discussion highlights recent progress for each of these strategies:
The core bank has 24 banking offices in Virginia and Maryland and is approximately 70% of the Company's total balance sheet. Management believes the core bank's value amongst its regional peers is undeniable given how well its balance sheet is positioned:
Primis Mortgage has closed mortgage volume of $323 million in the second quarter of 2025, up 52% compared to the same quarter in 2024. Earnings for Primis mortgage were depressed by approximately $1.2 million related to the commitment of one quarter's support for the new production teams hired in the last week of the first quarter of 2025.
Mortgage warehouse lending activity was significant in the first and second quarter of 2025 following the expansion of the team in the fall of 2024. Outstanding loan balances at June 30, 2025 were $185 million, up 60% from $115 million at March 31, 2025 and up 189% from $64 million at December 31, 2024. Committed facilities ended the second quarter of 2025 at $804 million versus $487 million at March 31, 2025 and $349 million at the end of 2024.
Mortgage warehouse also funded approximately 11% of its balance sheet with associated customer noninterest bearing deposit balances totaling $21 million at June 30, 2025 up 80% from March 31, 2025.
Funding for the national strategies is provided exclusively by the Bank's digital platform powered by what the Bank believes is one the safest and most functional deposit accounts in the nation. Because of the scalability of the platform, there is no pressure whatsoever on the core bank to provide funding and risk the profitable, decades old relationships with core customers.
The platform ended the second quarter of 2025 with almost $1.1 billion of deposits with a cost of deposits of 4.28% in the month of June 2025, compared to $0.9 billion at June 30, 2024 with a cost of 5.05%. Over 1,000 of our digital accounts have come from referrals from another customer and approximately 61% of our consumer accounts have been with the bank for over two years.
Panacea's growth remained strong through the second quarter of 2025 with loans outstanding of $505 million, up 34% compared to the same quarter in 2024. At the end of the current quarter, Panacea customer deposits totaled $107 million, up 58% from June 30, 2024.
Importantly, much of this growth was commercial in nature with a weighted average cost below 0.25% and has continued at a similar pace since quarter end.
Because of the final significant write-off of accrued interest on the consumer loan portfolio, net interest income decreased to $25.5 million during the second quarter of 2025 compared to $26.4 million in the first quarter of 2025 and $24.9 million in the second quarter of 2024.
The reported net interest margin was 2.89% in the second quarter of 2025 compared to 2.72% in the second quarter of 2024.
Excluding the impacts of the Consumer Program portfolio, the Company's net interest margin was 3.15% in the second quarter of 2025 compared to 2.80% in the same quarter in 2024. Net interest income for the second quarter, excluding the impacts of the write-off of accrued interest, increased by 10.4% to $27.5 million compared to $24.9 million in the second quarter of 2024.
Noninterest income was $18.0 million in the second quarter of 2025 versus $32.3 million in the first quarter of 2025 and $10.7 million in the second quarter of 2024. The Company deconsolidated PFH as of March 31, 2025 and upon deconsolidation recognized a gain of $24.6 million within noninterest income in the first quarter of 2025.
Noninterest expense was $31.9 million for the second quarter of 2025, compared to $32.5 million for the first quarter of 2025.
Loans held for investment increased to $3.13 billion at June 30, 2025 compared to $3.04 billion at March 31, 2025 and declined from $3.30 billion at June 30, 2024 prior to the sale of the Life Premium Finance portfolio.
Total deposits at June 30, 2025 were essentially flat from June 30, 2024. Deposits swept off balance sheet increased to $37 million at June 30, 2025 versus $4 million at the same time in 2024.
Book value per common share as of June 30, 2025 was $15.52, an increase of $0.30 or 2% from June 30, 2024. Tangible book value per common share at the end of the second quarter of 2025 was $11.72, an increase of $0.34 or 3% from June 30, 2024.
As of June 30, 2025, Primis had $3.9 billion in total assets, $3.1 billion in total loans held for investment and $3.3 billion in total deposits. Primis Bank provides a range of financial services to individuals and small- and medium-sized businesses through twenty-four full-service branches in Virginia and Maryland and provides services to customers through certain online and mobile applications.
Dennis J. Zember, Jr., President and CEO
Matthew A. Switzer, EVP and CFO
1676 International Drive, Suite 900
Phone: (703) 893-7400
McLean, VA 22102
The Company's management will host a conference call to discuss its second quarter results on Friday, July 25, 2025 at 10:00 a.m. (ET). A live Webcast of the conference call is available at the following website: Webcast Link. Participants may also call 1-800-715-9871 and ask for the Primis Financial Corp. call. A replay of the teleconference will be available for 7 days by calling 1-800-770-2030 and providing Replay Access Code 4554342.
Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute "forward-looking statements." Forward-looking statements include, but are not limited to, our expectations regarding our future operating and financial performance.