Primis Financial (FRST) Q3 2026 Earnings Call: Margin Expands as Mortgage Revenue Falls
Source Tradingkey
Key Takeaways
- Primis Financial Corp. (FRST) reported Q3 2026 net income of $8.7 million, or $0.35 per diluted share, versus $6.8 million, or $0.28 per share, a year earlier.
- Net interest income rose to $36.3 million from $29.0 million year over year. Reported net interest margin expanded 48 basis points to 3.66%; excluding a $700,000 interest recovery, core margin was 3.59%.
- Loans held for investment increased 9% year over year to approximately $3.5 billion. Deposits reached $3.47 billion, up 4%, while FHLB advances declined by $80 million to $220 million.
- Mortgage banking revenue fell to $8.0 million from $11.4 million in Q2 as higher rates disrupted activity. The mortgage unit lost approximately $200,000, including a $2.5 million pipeline valuation reset.
- Asset quality remained stable. Nonperforming assets, excluding SBA-guaranteed portions, improved to 1.43% of total assets from 2.07% a year ago, while core net charge-offs were 17 basis points.
- Management expects incremental margin expansion, approximately 8% full-year loan growth and $3 million of annualized vendor and statement-service savings beginning in early 2027.
Core Financial Data
| Metric | Q3 2026 | Comparison | Commentary |
|---|---|---|---|
| Net income | $8.7 million | $9.4 million in Q2; $6.8 million year ago | Up 28% year over year |
| Diluted EPS | $0.35 | $0.38 in Q2; $0.28 year ago | Operating EPS also $0.35 |
| Operating ROA | 0.80% | 0.53% in Q2; 0.70% year ago | Mortgage breakeven would have lifted ROA to about 1%, according to management |
| Pretax pre-provision operating income | $12.0 million | $8.7 million year ago | Up 38% year over year |
| Net interest income | $36.3 million | $33.8 million in Q2; $29.0 million year ago | Included $700,000 of interest recoveries |
| Net interest margin | 3.66% | 3.45% in Q2; 3.18% year ago | Core NIM was 3.59% excluding the recovery |
| Loans held for investment | Approximately $3.5 billion | Up 4% annualized sequentially; up 9% year over year | Panacea loans rose to $603 million |
| Total deposits | $3.47 billion | Up $26 million sequentially; up 4% year over year | Total deposit cost was 2.28% |
| Provision for credit losses | $1.1 million | $5.5 million in Q2 | Mainly driven by loan growth |
| Nonperforming assets / total assets | 1.43% | 1.45% in Q2; 2.07% year ago | Excludes SBA-guaranteed portions |
| Noninterest income | $12.9 million | $22.0 million in Q2 | Q2 included a $5.9 million investment gain |
| Noninterest expense | $37.2 million | $38.2 million in Q2; $32.3 million year ago | Core operating burden was approximately $24.2 million |
| Tangible book value per share | $13.81 | Up 18% year over year | TCE ratio improved to 8.14% |
Business and Operating Performance
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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