Primis Financial Corp. Announces Sale-Leaseback Transaction

Core Viewpoint - Primis Bank has completed a sale-leaseback transaction involving 18 branch properties, resulting in a pre-tax gain of $50 million, which will enhance the bank's balance sheet, operating earnings, and capital levels for anticipated growth in 2026 and 2027 [1][2]. Financial Impact - The transaction is expected to yield a net gain of $38 million after tax, equating to $1.54 per share. Key financial ratios will improve significantly, including: - ROAA increasing from 0.70% to 0.80% (14.3% change) - ROTCE rising from 9.45% to 9.61% (1.7% change) - Net Interest Margin improving from 3.18% to 3.46% (8.8% change) - Efficiency Ratio decreasing from 79.0% to 77.0% (2.5% change) - Tangible Book Value increasing from $11.71 to $13.25 (13.2% change) - CET1 ratio for the consolidated entity rising from 8.62% to 9.32% (8.1% change) [2][3]. Sale-Leaseback Transaction Details - The proceeds from the sale are approximately $58 million, leading to a pre-tax gain of $48 million after transaction-related expenses. The recurring rental expense is projected to increase by about $5.4 million annually, which will be partially offset by $1.8 million in earnings from cash received at closing [3]. Securities Portfolio Restructuring - The bank plans to sell securities with a book value of approximately $144 million, incurring an estimated pre-tax loss of $14.8 million. Proceeds of around $50 million will support near-term loan growth, while the remainder will be reinvested in higher-yielding securities at approximately 4.50%, expected to improve pre-tax earnings by $4.3 million annually [4]. Subordinated Debt Management - The company aims to reduce its outstanding subordinated debt by approximately $27 million, with plans to refinance the remaining debt, which currently costs about 9.50%. This strategy is anticipated to enhance pre-tax earnings by approximately $3.0 million [5]. BOLI Restructuring - The bank intends to restructure lower-yielding BOLI assets into higher-yielding policies, with one-time costs expected to be under $100,000. This restructuring is projected to improve earnings by approximately $1.2 million annually [6]. Earnings Roll Forward - A roll forward of the company's earnings indicates an increase in net interest income from $29.032 million to $31.263 million (7.7% change) and net income rising from $6.830 million to $7.857 million (15.0% change) [8]. Company Overview - As of September 30, 2025, Primis Financial Corp. reported total assets of $4.0 billion, total loans held for investment of $3.2 billion, and total deposits of $3.3 billion. The bank operates 24 full-service branches in Virginia and Maryland, offering a range of financial services [9].