Primis Financial to sell portion of Panacea stake for $22 million

MCLEAN, Va. - Primis Financial Corp. (NASDAQ:FRST), a $242 million market cap regional bank with a notable 4.07% dividend yield, announced Thursday it has signed a non-binding term sheet to sell part of its ownership in Panacea Financial Holdings, Inc., a transaction expected to generate approximately $22 million in proceeds.

The proposed sale follows Primis’ deconsolidation of Panacea at the end of March 2025. The company anticipates recording an additional pre-tax gain between $6.5 million and $7.0 million, as the sales price per share exceeded the carrying value established on March 31. According to InvestingPro analysis, Primis has demonstrated strong shareholder-friendly policies, maintaining dividend payments for 14 consecutive years.

Dennis J. Zember, Jr., President and CEO of Primis, indicated the proceeds could support company strategies including its share repurchase program or accelerating growth initiatives.

"Repurchase of our shares right now is accretive to tangible book value," Zember said in the press release statement. He added that while the transaction represents a partial monetization of their investment, Primis remains committed to Panacea’s long-term potential.

As of March 31, 2025, Primis reported $3.7 billion in total assets, $2.9 billion in total loans held for investment, and $3.2 billion in total deposits. The company operates twenty-four full-service branches across Virginia and Maryland, providing financial services to individuals and small to medium-sized businesses. InvestingPro data shows the company has achieved impressive revenue growth of 22.34% in the last twelve months, though current trading levels suggest slight overvaluation relative to its Fair Value. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The announcement did not specify the identity of the buyer or the percentage of Panacea ownership being divested. The transaction is subject to finalization as the term sheet is non-binding.

In other recent news, Primis Financial Corp reported its financial results for the first quarter of 2025, revealing mixed performance. The company’s earnings per share (EPS) fell short of expectations at $0.14, compared to the forecasted $0.26, marking a significant miss. However, revenue slightly exceeded expectations, coming in at $34.14 million against a forecast of $33.49 million. Despite this revenue beat, the earnings miss was a primary concern for investors. Analysts from Janney Montgomery and Scott have been closely monitoring the company’s performance, noting the potential for further earnings shortfalls if cost control measures do not yield expected savings.

Primis Financial’s strategic initiatives include expanding its mortgage volumes and reducing technology spending. The company has also set a target to achieve a 1% return on assets by the end of the year. Additionally, Primis Financial is working on consolidating core processing contracts to achieve cost savings. The firm has been actively recruiting top mortgage teams to bolster its mortgage division, which aims to significantly contribute to the company’s return on assets. These developments indicate Primis Financial’s focus on operational efficiency and growth in earning assets.

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