Primis Financial Corp. Announces Sale of Minority Interest in Southern Trust Mortgage, LLC

Rhea-AI Summary

Primis Financial Corp. (NASDAQ: FRST) has reached an agreement with Southern Trust Mortgage, LLC to repurchase all common membership interests and some preferred interests in STM. Following the transaction, STM will remain a borrower, but Primis will no longer hold a minority stake. The company anticipates a pre-tax charge of approximately $2.9 million in Q3 2021 and will cease accruing earnings from common interests in STM. The deal is expected to finalize in Q4 2021, impacting Primis's financial outlook.

Positive

• The transaction allows Primis to refocus resources by exiting its minority ownership in STM.
• STM will continue borrowing from Primis, maintaining ongoing business relations.

Negative

• The expected pre-tax charge of $2.9 million may negatively impact Q3 2021 financial results.
• Primis will no longer accrue earnings from its common membership interests in STM, potentially affecting future revenue.

GLEN ALLEN, Va., Sept. 23, 2021 /PRNewswire/ -- Primis Bank (the "Bank"), the wholly-owned subsidiary of Primis Financial Corp. (NASDAQ: FRST) ("Primis" or the "Company"), announced today that it has entered into an agreement with Southern Trust Mortgage, LLC ("STM"), a regional mortgage banking company and an affiliate of the Bank, whereby STM will repurchase all of the Bank's common membership interests and a portion of the Bank's preferred interests in STM.  At closing, STM will continue to be a borrower of the Bank, but the Bank will no longer be a minority owner of STM.

The Company expects to record a pre-tax charge of approximately $2.9 million related to the transaction in the third quarter of 2021.  The Company will also no longer accrue earnings related to the Bank's common membership interests in STM.  The transaction is expected to close in the fourth quarter of 2021.

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.

Forward-Looking Statements

This press release contain statements that constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually use words such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology, including statements related to the future performance of the Company. Forward-looking statements represent management's beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are no guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. You should not place undue reliance on such forward-looking statements. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances occurring after the issuance of this press release.

Contact: Dennis J. Zember Jr., CEO
Phone: 804-997-2406
Primis Financial Corp., NASDAQ Symbol FRST
Website: www.primisbank.com

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SOURCE Primis Financial Corp.

FAQ

What agreement did Primis Financial Corp. make on September 23, 2021?

Primis Financial Corp. announced an agreement to repurchase all common membership interests and a portion of preferred interests in Southern Trust Mortgage, LLC.

How much is the expected pre-tax charge for Primis in Q3 2021?

The expected pre-tax charge related to the transaction is approximately $2.9 million.

What will happen to Southern Trust Mortgage after the transaction?

After the transaction, Southern Trust Mortgage will remain a borrower of Primis, but Primis will no longer be a minority owner.

When is the transaction between Primis Financial and Southern Trust Mortgage expected to close?

The transaction is expected to close in the fourth quarter of 2021.