Primis Core Margin Expands as Mortgage Pipeline Shrinks

The Tip Desk · November 8, 2026 · 4 min read

Net interest income reached $36.3 million and the net interest margin 3.66% in the third quarter as Primis posted $8.7 million of net income, or $0.35 a share.

Primis Financial Corp. (FRST), a $4.3 billion community bank with 24 branches in Virginia and Maryland, reported net interest income of $36.3 million for the three months ended September 30, 2026, up 25% from $29.0 million a year earlier, as the net interest margin expanded to 3.66% from 3.18% in the third quarter of 2025.

Net income available to common shareholders was $8.7 million, or $0.35 a diluted share, compared with $6.8 million, or $0.28 a share, a year earlier. Operating net income on the same basis rose 27% from $6.8 million, or $0.28 a share, in the third quarter of 2025.

The sequential story was a faster lift in net interest income after a slower second-quarter step-up. Net interest income rose 7% from $33.8 million in the second quarter of 2026, following a 5% sequential increase from $32.1 million in the first quarter. The net interest margin expanded 21 basis points sequentially to 3.66% from 3.45% in the second quarter, after a 2 basis-point sequential expansion from 3.43% in the first quarter. Management cited a 3.59% core margin with 14 basis points of linked-quarter expansion.

Yield on earning assets increased 22 basis points versus the second quarter, including about 7 basis points from a $0.7 million interest recovery on a previously charged-off loan. Adjusting for that recovery, net interest income was $35.6 million, up 23% from the year-ago quarter, and the margin was 3.59%. Yield on investments rose 135 basis points year-over-year after a fourth-quarter 2025 portfolio restructuring. Cost of interest-bearing deposits was 2.70%, versus 2.88% a year earlier; cost of funds was 2.47%. Core Bank cost of deposits was 1.63%.

Noninterest income was $12.9 million, versus $22.0 million in the second quarter of 2026. Mortgage-related income fell 10% to $8.0 million from $8.9 million a year earlier. The company said the retail mortgage pipeline was 37% lower, reducing revenue by $2.3 million versus the second quarter. Gain on sale income was $1.5 million versus $0.2 million a year earlier. Primis Mortgage closed $347 million of volume, up 12.5% from the year-ago quarter. Pre-tax losses related to Primis Mortgage were about $0.3 million, down from earnings of $1.9 million in the third quarter of 2025.

Loans held for investment were $3.5 billion at September 30, 2026, flat versus $3.47 billion at June 30, 2026. Core Bank loans ended slightly over $2.0 billion, up 11% annualized from June 30, 2026, with a $160 million pipeline. Mortgage warehouse outstanding balances fell to $501 million from $544 million at June 30, 2026; average warehouse balances were $427 million. Panacea loans held for investment were $603 million, up 14% annualized from $583 million at June 30, 2026. Panacea customer deposits totaled $207 million, up 56% from September 30, 2025.

Total deposits were $3.47 billion at September 30, 2026. Average noninterest-bearing deposits were $542 million in the third quarter, down from $566 million in the second quarter; NIB as a share of average deposits was 15.4%. The digital platform ended the quarter with about $1.0 billion of deposits at a 3.80% cost, versus $1.0 billion at September 30, 2025 with a 4.07% cost. Small-business balances on the platform reached $54 million at September 30, 2026, up from $16 million at December 31, 2025.

Reported noninterest expense was $37.2 million, versus $38.2 million in the second quarter of 2026. Core operating expense burden was $24.2 million versus $24.9 million in the second quarter; excluding about $1.4 million of loan-related expenses and $0.4 million of professional fees, the company said core burden would have been essentially flat with the second-quarter run rate. The company expects about $3.0 million of annualized savings from vendor consolidation and statement services beginning early in 2027.

The provision for credit losses was $1.1 million, down from $5.5 million in the second quarter of 2026. Core net charge-offs were 17 basis points of average loans, down 36 basis points from the second quarter. Nonperforming assets excluding SBA-guaranteed portions improved to 1.43% of total assets at September 30, 2026 from 1.45% at June 30, 2026, and declined to $61 million from $63 million. The allowance for credit losses was 1.30% of loans held for investment versus 1.40% at September 30, 2025.

Tangible book value per common share was $13.81 at September 30, 2026, up from $13.72 at June 30, 2026. Tangible common equity was $342.4 million, or 8.14% of tangible assets. The board declared a $0.10 quarterly dividend, the sixtieth consecutive.