Primis Financial Corp. Reports Deconsolidation of Panacea

Rhea-AI Summary

Primis Financial Corp. (NASDAQ: FRST) has announced the deconsolidation of Panacea Financial Holdings (PFH) effective March 31, 2025. The company will record a significant pre-tax gain of $24.6 million, with an after-tax gain of approximately $20.0 million ($0.81 per share). An independent valuation determined the company's investment in PFH was worth $21.2 million, and Primis expects to recoup consolidated operating losses of $3.4 million.

The deconsolidation will improve Primis's financial metrics, including a 10 basis point increase in ROA and a 14-point decrease in operating efficiency ratio. Primis Bank will maintain its exclusive banking partnership with Panacea for loans and deposits through its Panacea division.

Positive

• Pre-tax gain of $24.6 million from deconsolidation
• After-tax gain of $20.0 million ($0.81 per share)
• 10 basis point improvement in Return on Assets (ROA)
• 14-point decrease in operating efficiency ratio
• Maintenance of exclusive banking partnership with Panacea for loans and deposits

Negative

• None.

Records Pre-Tax Gain of Approximately $24.6 million

MCLEAN, Va., May 13, 2025 /PRNewswire/ -- Primis Financial Corp. (NASDAQ: FRST) ("Primis" or the "Company") today reported that it has deconsolidated Panacea Financial Holdings ("PFH") effective March 31, 2025.   Accordingly, the Company will be revising its earnings release dated April 29, 2025 to reflect certain gains associated with recognizing the value of the Company's investment in PFH.

The Company engaged an independent third party to evaluate the fair market value of its investment in PFH and it was determined that, as of March 31, 2025, the Company's investment was valued at $21.2 million.  Additionally, the Company expects to recoup certain consolidated operating losses totaling $3.4 million.  Portions of these amounts are non-taxable and, taken together, the Company expects the after-tax gain recorded upon deconsolidation to be approximately $20.0 million, or $0.81 per share.

Commenting on the deconsolidation of PFH, Dennis J. Zember, Jr., President and CEO said, "Deconsolidating PFH is a welcome step in our path forward. The boost to capital levels and tangible book value is welcome, but importantly, it simplifies our financial statement presentation and positively impacts our reported operating ratios.  Our ROA will improve by ten basis points and our operating efficiency ratio will decrease by approximately 14 points.  Lastly, Primis Bank will continue to be the exclusive banking partner for all loans and deposits through its Panacea division."

About Primis Financial Corp.

As of March 31, 2025, Primis had $3.7 billion in total assets, $3.0 billion in total loans held for investment and $3.2 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.

Contacts:	Address:
Dennis J. Zember, Jr., President and CEO	Primis Financial Corp.
Matthew A. Switzer, EVP and CFO	1676 International Drive, Suite 900
Phone: (703) 893-7400	McLean, VA 22102

                                                                                           

Primis Financial Corp., NASDAQ Symbol FRST

Website: www.primisbank.com

Forward-Looking Statements 

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Such statements can generally be identified by such words as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and other similar words or expressions of the future or otherwise regarding the outlook for the Company's future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, but are not limited to, our expectations regarding our future operating and financial performance, including the preliminary estimated financial and operating information presented herein, which is subject to adjustment; our outlook and long-term goals for future growth and new offerings and services; our expectations regarding net interest margin; expectations on our growth strategy, expense management, capital management and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations.

Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: instability in global economic conditions and geopolitical matters; the impact of current and future economic and market conditions generally (including seasonality) and in the financial services industry, nationally and within our primary market areas; changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortages and supply chain disruptions; the impact of tariffs, trade policies, and trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services); the Company's ability to implement its various strategic and growth initiatives, including its recently established Panacea Financial Division, digital banking platform, V1BE fulfillment service, Mortgage Warehouse division and Primis Mortgage Company; the risks associated with the Life Premium Finance sale, including failure to achieve the expected impact to our operating results; competitive pressures among financial institutions increasing significantly; changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices; changes in management's plans for the future; credit risk associated with our lending activities; changes in accounting principles, policies, or guidelines; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions; potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; potential increases in the provision for credit losses; our ability to identify and address increased cybersecurity risks, including those impacting vendors and other third parties; fraud or misconduct by internal or external actors, which we may not be able to prevent, detect or mitigate; acts of God or of war or other conflicts, including the current Ukraine/Russia conflict and Israel/Hamas conflict, acts of terrorism, pandemics or other catastrophic events that may affect general economic conditions; and other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company's management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company's filings with the Securities and Exchange Commission, the Company's Annual Report on Form 10-K for the year ended December 31, 2024, under the captions "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors," and in the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.

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SOURCE Primis Financial Corp.

FAQ

What is the value of FRST's gain from Panacea deconsolidation in 2025?

Primis Financial Corp. will record a pre-tax gain of $24.6 million and an after-tax gain of approximately $20.0 million ($0.81 per share) from the Panacea deconsolidation.

How will the Panacea deconsolidation affect Primis Financial's financial metrics?

The deconsolidation will improve ROA by 10 basis points and decrease the operating efficiency ratio by approximately 14 points.

What is the fair market value of Primis Financial's investment in Panacea as of March 2025?

An independent third-party evaluation determined that Primis Financial's investment in Panacea was valued at $21.2 million as of March 31, 2025.

Will Primis Bank continue its relationship with Panacea after deconsolidation?

Yes, Primis Bank will continue to be the exclusive banking partner for all loans and deposits through its Panacea division.