Primis Financial (FRST) Financials

Primis Financial’s latest results show improving earnings and balance-sheet growth, but cash generation and funding costs remain important risks. In Q2 2026, net income attributable to common shareholders increased to $9.4 million, or $0.38 per diluted share, from $7.3 million, or $0.30 per share, in Q1 2026. Earnings were also substantially above the $2.4 million reported in Q2 2025.

Revenue reached $55.8 million in Q2 2026, up from $45.6 million in the previous quarter and $43.2 million a year earlier. Net interest income rose to $33.8 million, reflecting continued loan growth and stronger interest income. However, non-interest income was also a significant contributor, including $7.9 million of investment gains and $12.3 million of other non-interest income. This mix creates some variability because investment gains may not be recurring.

The balance sheet continued to expand. Total assets increased to $4.35 billion at June 30, 2026, compared with $3.87 billion at June 30, 2025. Net loans and leases rose to $3.42 billion from $3.08 billion over the same period. Total common equity reached $433.8 million, up from $376.4 million a year earlier, although the company also increased its reliance on long-term debt.

• Improving profitability: Q2 2026 net income increased approximately 29% from Q1 2026 and nearly quadrupled from Q2 2025, while diluted EPS rose to $0.38.
• Strong revenue and net interest income growth: Total revenue increased approximately 29% year over year, and net interest income rose from $25.2 million in Q2 2025 to $33.8 million.
• Loan and asset expansion: Net loans grew approximately 11% year over year, helping drive total assets above $4.3 billion for the first time in the provided periods.
• Higher equity base: Total common equity increased to $433.8 million from $376.4 million a year earlier, providing a larger capital cushion as the balance sheet grows.
• Credit-loss provision below the year-ago level: The Q2 2026 provision for credit losses was $5.5 million, down from $8.3 million in Q2 2025, although it was higher than the $1.5 million provision in Q1 2026.
• Cash balance improved modestly: Cash and due from banks increased to $10.1 million from $8.4 million in Q1 2026, while interest-bearing deposits at other banks rose to $166.7 million. The improvement was supported primarily by financing activity rather than operating cash flow.
• Non-interest income remains volatile: Q2 2026 included $7.9 million of investment gains, while Q4 2025 included an unusually large $39.0 million gain. This can make reported revenue and earnings fluctuate between quarters.
• Operating cash flow remained negative: Primis reported negative operating cash flow of $5.7 million in Q2 2026 following negative cash flow of $54.4 million in Q1. This was an improvement sequentially, but it indicates that reported earnings have not consistently translated into cash.
• Heavy investment-securities purchases: The company purchased $82.3 million of investment securities in Q2 2026, resulting in negative investing cash flow of $68.4 million. Continued portfolio investment may constrain liquidity if not matched by stable funding inflows.
• Greater use of debt financing: Long-term debt increased to $383.5 million from $313.8 million in Q1 2026 and $112.5 million in Q1 2025. Q2 financing cash flow was positive primarily because of $70.4 million in debt issuance and $23.3 million of deposit growth, while interest expense remained elevated at $22.6 million.

Overall, Primis Financial is showing a meaningful recovery from the weak earnings reported during parts of 2023 and 2024. Loan growth, higher net interest income and rising equity are constructive trends. Investors should nevertheless monitor credit-loss provisions, the sustainability of non-interest income, operating cash flow and the company’s increasing use of debt to fund balance-sheet expansion.