Primis Financial Corp. Q1 FY2026 earnings call

• President Dennis Sever reported earnings, noting operating earnings were up 126% year - over - year. - Net interest margin benefited from securities restructure and mix of earning assets. - Focus on growing checking accounts to about 20% of total deposits. - Driving operating leverage with core revenue up 34% over a year ago while operating expenses were only 4% higher. - AI is a key strategy, expecting to be the undisputed leader among banks under $10 billion using AI to drive various results in a year. - Core bank deposits were attractive, with focus on growing non - interest - bearing deposits. - Mortgage Warehouse fully replaced Life Proving Finance, retail mortgage had strong production, and recruiting pipeline was strong.

First quarter earnings: earned $7.3 million or 30 cents per share, while operating earnings were 33 cents per share, up 126% from the same quarter in 2025. Net interest margin climbed to 3.43% in the first quarter compared to 3.15% in the same quarter of 2025. Loans ended at $3.4 billion, a 11.7% increase compared to the same quarter in 2026. Deposit growth was just better than 8%, with non - interest bearing checking accounts growing to $541 million, almost 19% higher than in 2025, accounting for 15.9% of total deposits. Mortgage Warehouse had about $460 million outstanding and is expected to double in 12 - 18 months. Retail mortgage pre - tax income grew to $2.1 million in the first quarter compared to $766,000 in the same quarter a year ago, with earnings on closed volume at 57 basis points vs 46 basis points in the same period a year ago.

• Expect margin expansion due to loan repricing tailwinds and debt payoff. - Primus Mortgage is on track to be a top 50 mortgage company nationwide in 2026. - Aim to continue operating leverage, with AI as a key strategy. - Expect to hit profitability goal in 2026.

• Forward - looking statements involve risk and uncertainty with factors that can cause actual results to differ from anticipated. - Non - GAAP financial measures need proper comparison to GAAP measures. - Mortgage business impacted by market volatility, Middle East activities, etc.

• Q: About mortgage production expectations and expense in 2026 first quarter, A: Expect production around $1 - 2 billion, no unusual expenses, margin on closed volume up, construction perm contributing. - Q: Net interest margin outlook and deposit costs, A: Expect margin expansion, deposit costs flat in the near term, new commercial loan origination yields in certain ranges. - Q: Credit on larger relationships, A: Two commercial real estate deals trending positive with more leasing activity and improving cap rates. - Q: Digital deposits and mortgage business cap, A: Digital deposits more expensive but separated from rate focus, mortgage business should be a complement to the bank, not the whole story.