Primis Financial Corp. (NASDAQ: FRST) completed a sale‑leaseback of 18 of its branch locations on December 8 2025, generating a pre‑tax gain of $50 million and returning approximately $58 million in cash to the balance sheet. The transaction is expected to close in the first quarter of 2026 and will increase the company’s tangible book value by 13.2 % and recurring earnings by 15.0 %.
The deal delivers a net after‑tax gain of $38 million, or $1.54 per share, and reduces subordinated debt by about $27 million. Net interest margin is projected to rise to 3.46 % from 3.18 % in Q3 2025, while the efficiency ratio is expected to improve to 77.0 % from 79.0 %. The Common Equity Tier 1 ratio will climb to 9.32 % as a result of the transaction. Recurring rental costs will increase by roughly $5.4 million annually, a cost that is offset by the higher cash flow and improved capital profile.
Primis is using the proceeds to strengthen its capital base and fund strategic growth initiatives, notably the expansion of its digital banking platform and mortgage‑warehouse business. The sale‑leaseback also allows the company to refinance higher‑cost debt, further improving its leverage profile and providing flexibility for future acquisitions or capital deployments. The transaction is part of a broader balance‑sheet restructuring that includes the sale of securities with a book value of $144 million at a pre‑tax loss of $14.8 million and the divestiture of a stake in Panacea Financial Holdings. These actions collectively position Primis for a more resilient and growth‑oriented future.
President and CEO Dennis J. Zember, Jr. said the deal “is the finishing touch on a great year of repositioning the Company.” He added that the transaction provides the capital needed to support mature strategies that grow revenue with minimal operating‑expense burden, underscoring the company’s confidence in its low‑cost, high‑margin business model.
Primis’s Q3 2025 earnings per share of $0.28 beat analyst expectations of $0.22 by $0.06, a 27 % lift, while revenue of $41 million exceeded the consensus of $38.1 million. The earnings beat was driven by disciplined cost management and a favorable mix of digital‑banking and mortgage‑warehouse income, offsetting the impact of higher rental expenses. The company’s strong cash flow generation and improved capital ratios give management room to pursue additional growth opportunities without compromising financial stability.
The sale‑leaseback strengthens Primis’s balance sheet, reduces debt‑related risk, and enhances profitability metrics. The improved net interest margin and efficiency ratio signal better asset‑liability management and operational leverage. However, the increased rental cost represents a recurring expense that will be absorbed by the higher cash flow and the company’s focus on high‑margin digital and mortgage businesses. Overall, the transaction positions Primis to accelerate its strategic initiatives while maintaining a robust capital cushion.
In summary, Primis’s sale‑leaseback of 18 branch properties delivers a significant pre‑tax gain, strengthens capital ratios, and provides the capital needed to accelerate growth in its digital and mortgage‑warehouse segments, marking a pivotal step in the company’s ongoing repositioning strategy.
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