FRST · Primis Financial Corp.

Primis Financial Corp. (FRST) reported Q1 2026 net income of $7.3 million, a 67.7% decline from $22.6 million in the prior-year quarter. This decrease primarily reflects the absence of one-time gains recorded in Q1 2025, which boosted last year's results. Diluted EPS followed suit at $0.30, down 67.4% from $0.92, underscoring the impact on per-share profitability.

Cash flow dynamics shifted markedly, with net cash provided by operating activities at -$54.4 million compared to +$34.4 million last year. This swing stems from elevated working capital demands tied to PMC loan growth, as origination volumes increased during the quarter. Free cash flow stood at -$54.6 million after subtracting $0.2 million in capital expenditures, highlighting the cash intensity of expanding mortgage-related operations. Management's growth strategy emphasizes four core areas—community banking, mortgage warehouse, Panacea financial lending, and PMC—explaining these outflows as investments in higher production and profitability.

Operationally, inflation's primary effect manifests in higher operating costs, while broader economic factors like FRB decisions, unemployment trends, and market instability influence deposit retention and funding costs. Management affirms that as of March 31, 2026, the company meets all capital adequacy requirements, with capital resources positioned to support current and future operations. Looking ahead, noninterest income from the declining Consumer Program is expected to become increasingly immaterial. This quarter's results demonstrate disciplined execution of the growth strategy despite headwinds from one-time comparables and cash cycle pressures, positioning Primis for sustained profitability in prioritized business lines.