Primis Financial Corp. reported net income available to common shareholders of $2.7 million, or $0.11 per diluted share, for the first quarter ended March 31, 2025. This marks an improvement from a net loss of $23.3 million in Q4 2024. Excluding a $1.9 million provision for the consumer loan portfolio and high professional fees, the company achieved a normalized return on assets of 0.56% for the quarter.
The company moved its consumer loan book back to held for investment and ceased new originations for the program at the end of January 2025. Promotional loans in this portfolio significantly dropped from $90 million to $17 million by quarter-end, reducing future volatility. Net interest income slightly increased to $26.4 million, and the net interest margin expanded to 3.15% from 2.90% in the prior quarter.
Primis Mortgage reported pre-tax income of $0.8 million, up from a loss in the prior quarter, with locked loans increasing 27% to $257 million. The Mortgage Warehouse lending activity saw outstanding loan balances surge 80% to $115 million, with committed facilities reaching $487 million. Panacea Financial continued its growth, with loans outstanding up $40 million from Q4 2024.
Management outlined a clear path to materially higher profitability, targeting earning asset growth back to $3.75 billion, which is expected to add 21 basis points to ROA. Mortgage operations are projected to add 0.15% to ROA in 2025, up from 0.05% in 2024. Additionally, the company anticipates substantial annual savings of $6 million to $7 million from consolidating core processing systems, potentially adding another 15 basis points to ROA.
The cost of deposits decreased by 28 basis points to 2.52% in Q1 2025, with digital platform rates declining 58 basis points. This funding advantage, combined with the strategic growth initiatives and anticipated expense reductions, positions the company to potentially double its return on assets, even before accounting for the removal of the 10 basis point drag from Panacea Financial Holdings' consolidated losses.
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