Primis Financial Enhances Growth with Strategic Sale-Leaseback of 18 Branch Properties

Primis Financial Takes Strategic Step with Major Sale-Leaseback Transaction

Primis Financial Corp., through its wholly-owned subsidiary Primis Bank, announces a pivotal sale-leaseback transaction involving 18 branch properties that is set to significantly boost its financial standing. The deal, projected to enhance the bank's tangible book value (TBV) by 13.2% and recurring earnings by 15.0%, marks a key milestone in the company’s growth trajectory. CEO Dennis J. Zember, Jr. heralds this transaction as a culmination of a successful year, framing it within a broader narrative of profitable growth and an optimistic earnings outlook as the bank prepares for anticipated expansion in 2026 and 2027.

The sale-leaseback arrangement is expected to generate a pre-tax gain of $50 million, offering Primis Bank the opportunity to restructure its balance sheet effectively. This strategic maneuver aims to improve operating earnings and bolster capital levels, positioning the bank favorably in a competitive financial landscape. Post-tax, the anticipated net gain of $38 million translates to approximately $1.54 per share, a positive indicator for stakeholders. Financial ratios are also set to benefit from this transaction: the return on average assets (ROAA) is projected to rise from 0.70% to 0.80%, while the return on tangible common equity (ROTCE) is expected to climb from 9.45% to 9.61%.

In addition to these impressive metrics, the sale-leaseback will enhance Primis Bank’s net interest margin from 3.18% to 3.46%, accompanied by a reduction in the efficiency ratio by 2.5%. The tangible book value will increase from $11.71 to $13.25, reflecting a robust foundation for future growth. However, the transaction will also lead to an increase in recurring rental expenses by approximately $5.4 million annually. Overall, this strategic initiative not only strengthens Primis Bank’s operational efficiency but also underlines its commitment to sustainable growth.

Primis Bank's successful completion of this transaction comes on the heels of a year characterized by notable financial performance. The bank's proactive approach to capital management and operational restructuring signals a robust strategy aimed at leveraging current market conditions for future benefits. As the financial institution looks ahead, the focus remains on harnessing this momentum to navigate the evolving banking landscape, ensuring long-term viability and profitability for its stakeholders.

This sale-leaseback transaction exemplifies Primis Financial's strategic foresight and commitment to enhancing its financial health, setting the stage for a promising outlook in the coming years.