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Primis Financial Corp. Reports Diluted Earnings per Share of $ 0.42 for the Second Quarter of 2021 Exhibit 99.1 Declares Quarterly Cash Dividend of $ 0.10 Per Share MCLEAN , Va . , July 29 , 2021 / PRNewswire / -- Primis Financial Corp. ( NASDAQ : FRST ) ( " Primis " or the " Company " ) , and its wholly - owned subsidiary Primis Bank ( the " Bank " ) , today reported net income of $ 10.3 million for the quarter ended June 30 , 2021 , compared to $ 9.4 million for the quarter ended March 31 , 2021. Earnings per share for the three months ended June 30 , 2021 were $ 0.42 on a basic and diluted basis , compared to $ 0.39 basic and $ 0.38 diluted for the three months ended March 31 , 2021 . Earnings for the six months ended June 30 , 2021 were $ 19.7 million compared to $ 4.7 million for the six months ended June 30 , 2020. Earnings per share for the six months ended June 30 , 2021 were $ 0.81 basic and $ 0.80 diluted , compared to $ 0.20 basic and $ 0.19 diluted for the six months ended June 30 , 2020 . The Board of Directors also announced and declared a dividend of $ 0.10 per share payable on August 27 , 2021 to shareholders of record on August 13 , 2021. This is Primis ' thirty - ninth consecutive quarterly dividend . Highlights for the three months ended June 30 , 2021 • Total assets at the end of the second quarter of 2021 were $ 3.4 billion , an increase of 10.5 % versus the year ago period . • Gross loans were $ 2.3 billion at the end of the second quarter of 2021 , down 9.0 % and 4.4 % from the year ago period and linked - quarter , respectively . Excluding Paycheck Protection Program ( " PPP " ) balances , gross loans declined 6.1 % and 0.21 % , respectively , over the same time periods . • Total deposits increased $ 599.5 million year - over - year despite a $ 231.0 million decline in time deposits over the same time frame . Non - time deposits comprised 85.9 % of total deposits at June 30 , 2021 versus 83.7 % at March 31 , 2021 and 71.2 % at June 30 , 2020 . • Net income , pre - tax pre - provision earnings ( ¹ ) and pre - tax pre - provision operating earnings ( ¹ ) were $ 10.3 million , $ 9.1 million and $ 9.1 million , respectively , for the second quarter of 2021 , versus $ 9.4 million , $ 11.3 million and $ 11.5 million , respectively for the first quarter of 2021 . • Return on average assets of 1.23 % for the quarter ended June 30 , 2021 versus 1.19 % for the quarter ended March 31 , 2021 . ⚫ Operating return on average assets ( ¹ ) of 1.23 % for the quarter ended June 30 , 2021 versus 1.21 % for the quarter ended March 31 , 2021 . • Pre - tax pre - provision return on average assets ( 1 ) and pre - tax pre - provision operating return on average assets ( 1 ) of 1.08 % for the second quarter of 2021 , compared to 1.43 % and 1.45 % , respectively , in the first quarter of 2021 . • Loans on deferral were $ 26.0 million or 1.3 % of gross loans excluding PPP balances . Approximately 55 % of total deferrals were from the hotel portfolio . ⚫ Negative provision for credit losses of $ 4.2 million for the second quarter of 2021 versus a negative provision of $ 1.4 million for the first quarter of 2021 . Allowance for credit losses to total loans ( excluding PPP balances ) of 1.52 % at June 30 , 2021 versus 1.70 % at March 31 , 2021 and 1.09 % at June 30 , 2020 . ⚫ Cost of deposits declined to 0.50 % for the second quarter of 2021 compared to 0.60 % for the first quarter of 2021 and 0.95 % for the second quarter of 2020 . • Book value per share of $ 16.59 and tangible book value per share ( 1 ) of $ 12.22 at June 30 , 2021 , representing an increase of $ 0.92 and $ 1.01 , respectively , from a year ago despite a significant build in the allowance for credit losses and $ 0.40 in dividends paid over the last twelve months . Commenting on the quarter , Dennis J. Zember , Jr. , President and Chief Executive Officer stated , " We are proud of our Bank's efforts to deliver world - class service to our customers and are seeing the results of that effort in our rapidly improving funding mix . We are laser - focused on enhancing our products and capabilities through our digital efforts and are excited by the technology we will have at our disposal when we launch our new digital bank late this year . We are also continuing to invest in our management and organization to ensure we have the talent and resources to run a much larger bank . " Net Interest Income Net interest income decreased 12.6 % to $ 21.8 million for the three months ended June 30 , 2021 from $ 25.0 million for the three months ended March 31 , 2021. The Company's reported net interest margin for the second quarter was 2.80 % compared to 3.41 % in the first quarter of 2021. Net interest income and net interest margin were both impacted by lower levels of PPP fee income recognition in the second quarter of 2021. Net PPP fee income recognized was $ 1.8 million for the three months ended June 30 , 2021 versus $ 4.9 million for the prior quarter . Net interest margin excluding the effects of PPP loans ( 1 ) was 2.77 % in the second quarter of 2021 , down 22 bps from 2.99 % linked - quarter . Net interest margin excluding the effects of PPP loans continues to be negatively impacted by unusually high cash balances at the Bank . Average balances of cash and equivalents were $ 558.8 million in the second quarter of 2021 , up from $ 319.1 million in the first quarter of 2021 . Yield on loans for the second quarter of 2021 was 4.34 % , or 4.46 % ( ¹ ) excluding the effect of PPP loans , compared to 4.82 % or 4.47 % , respectively in the first quarter of 2021. The Company continues to pursue core deposits to improve the overall deposit mix while reducing funding costs . As a result of these efforts and a general decline in market rates , the cost of total deposits declined to 0.50 % in the second quarter of 2021 from 0.60 % in the prior quarter . Noninterest Income During the three months ended June 30 , 2021 , Primis had non - interest income of $ 4.5 million compared to $ 3.8 million for the three months ended March 31 , 2021. Gains on our investment in Southern Trust Mortgage ( " STM " ) increased to $ 1.9 million compare to $ 1.3 million in first quarter in 2021. The second quarter at STM benefited from a gain related to the sale of mortgage servicing rights while STM's first quarter was impacted by a management restructuring charge as previously discussed . Recoveries related to acquisition - related previously charged - off loans and investment securities also increased $ 145 thousand from the first quarter of 2021 . Noninterest Expense Noninterest expense was $ 17.4 million for the three months ended June 30 , 2021 , compared to $ 18.2 million for the three months ended March 31 , 2021. The decrease in noninterest expense was largely driven by a decrease of $ 562 thousand in employee compensation and benefits and decrease of $ 561 thousand in reserve for unfunded commitments expense from the prior quarter , partially offset by an increase of $ 217 thousand in data processing expense for the same time frames . Employee compensation in the second quarter of 2021 included $ 429 thousand in employee incentive payments tied to core deposits generated in the first quarter of 2021 , down from $ 454 thousand of incentive expense recognized last quarter . Loan Portfolio and Asset Quality Loans outstanding declined to $ 2.29 billion at June 30 , 2021 , compared to $ 2.39 billion at March 31 , 2021 and $ 2.51 billion at June 30 , 2020. Excluding PPP loans , loans outstanding have decreased $ 134.5 million since June 30 , 2020 and $ 4.30 million since March 31 , 2021. The Company ended the second quarter of 2021 with $ 26.0 million of loans on deferral , or 1.3 % of total loans excluding PPP loans , down from $ 112.8 million of loans on deferral at March 31 , 2021. Hotels account for 55 % of deferrals as of Jun 30 , 2021 versus 59 % at March 31 , 2021 . Nonperforming assets , excluding portions guaranteed by the SBA , were 0.43 % of total assets at June 30 , 2021 , compared to 0.41 % at March 31 , 2021. Loans rated substandard or doubtful declined 7.3 % in the second quarter versus the linked - quarter . Doubtful loans were $ 1.53 million at June 30 , 2021 , up from $ 0 in the prior quarter , due to the downgrade of two SBA guaranteed relationships . The credits have been on nonaccrual and in work - out for an extended period of time and have been downgraded while the Banl pursues the SBA guarantees . The allowance for credit losses was $ 31.3 million at June 30 , 2021 , down 10 % from $ 34.9 million at March 31 , 2021 and up 32 % from $ 23.6 million at June 30 , 2020. The Company recorded a negative provision of $ 4.22 million in the second quarter as loans on deferral and the economic impact of COVID - 19 declined dramatically in the quarter . As a percentage of loans ( excluding PPP ) , the allowance was 1.52 % at the end of the second quarter of 2021 versus 1.70 % as of March 31 , 2021. Net charge - offs remain low wi net recoveries of $ 587 thousand in the second quarter of 2021 versus net charge - offs of $ 80 thousand in the prior quarter . Deposits Total deposits increased to $ 2.75 billion at June 30 , 2021 , compared to $ 2.69 billion at March 31 , 2021 and $ 2.15 billion at June 30 , 2020. The Company continues to aggressively pursue improvement in the funding mix with an emphasis on core deposits . During the quarter , CDs declined by $ 49.8 million while core deposits ( demand , NOW , money market and savings ) increased $ 112.3 million linked - quarter . Time deposits represented approximately 14 % of total deposits at June 30 , 2021 , down from 16 % at March 31 , 2021 and 29 % at June 30 , 2020 . Shareholders ' Equity Book value per share as of June 30 , 2021 was $ 16.59 , an increase of $ 0.37 since March 31 , 2021 and $ 0.92 since June 30 , 2020. Tangible book value per share ( 1 ) at the end of the second quarter of 2021 was $ 12.22 , an increase of $ 0.38 since March 31 , 2021 and $ 1.01 since June 30 , 2020. Shareholder's equity was $ 406.9 million , or 12 % of total assets at June 30 , 2021. Tangible common equity ( 1 ) at June 30 , 2021 was $ 299.8 million , or 9.12 % of tangible assets ( ¹ ) . Panacea Financial Division Update The Bank's Panacea Division ( " Panacea " ) , which launched in November of 2020 , focuses on national lending and deposit gathering with unique products and services for the medical community . The division is seeing increasing traction within the medical community and the pipeline suggests rapid growth for the division in the second half of 2021. To date , over 45 % of its borrowers have established checking account relationships with Panacea . Additionally during the second quarter , Panacea hired an experienced healthcare banker from a super - regional bank to lead its new commercial division , Panacea Practice Solutions . Panacea now offers personal , student debt refinance , commercial real estate and practice loans . Lastly , Panacea is launching an expansion on August 1 to target dentists with the same innovative products and services currently offered to the medical community . About Primis Financial Corp. As of June 30 , 2021 , Primis had $ 3.40 billion in total assets , $ 2.29 billion in total loans and $ 2.75 billion in total deposits . Primis Bank , the Company's banking subsidiary , provides a range of financial services to individuals and small- and medium - sized businesses through forty - one full - service branches in Virginia and Maryland and through certain internet and mobile applications . Contacts : Dennis J. Zember , Jr. , President and CEO Matthew A. Switzer , EVP and CFO Phone : ( 703 ) 893-7400 Primis Financial Corp. , NASDAQ Symbol FRST Website : www.primisbank.com Conference Call Address : Primis Financial Corp. 6830 Old Dominion Drive McLean , VA 22101 The Company's management will host a conference call to discuss its second quarter results Friday , July 30 , 2021 at 10:00 a.m. ( ET ) . A live Webcast of the conference call is available at the following website : https://www.webcaster4.com/Webcast/Page/2742/41861 . Participants may also call 1-877-870-4263 and ask for the Primis Financial Corp. call . A replay of the teleconference will be available through August 6 , 2021 by calling 1-877-344-7529 and providing Replay Access Code 10157863 . Non - GAAP Measures Statements included in this press release include non - GAAP financial measures and should be read along with the accompanying tables . Primis uses non - GAAP financial measures to analyze its performance . The measures entitled net income adjusted for nonrecurring income and expenses ; pre - tax pre - provision operating earnings ; operating return on average assets ; pre - tax pre - provision operating return on average assets ; operating return on average equity ; operating return on average tangible equity ; operating