Primis Financial Corp. Leases Disclosure
7. LEASES
The Company leases certain premises under operating leases. In recognizing lease right-of-use assets and related liabilities, Primis accounts for lease and non-lease components (such as taxes, insurance, and common area maintenance costs) separately as such amounts are generally readily determinable under our lease contracts.
On December 8, 2025, Primis entered into a sale-leaseback transaction covering 18 previously owned branch properties, resulting in a pretax gain of $51 million for the year ended December 31, 2025 (the transaction is further described in Note 1 – Organization and Significant Accounting Policies). The Company’s lease was evaluated and determined to be an operating lease which resulted in recording a right-of-use asset of $57 million and a lease liability of $51 million at inception.
At December 31, 2025 and 2024, the Company had operating lease liabilities totaling $61 million and $12 million, respectively, and right-of-use assets totaling $66 million and $10 million, respectively. We do not currently have any financing leases. For the years ended December 31, 2025, 2024, and 2023, our net operating lease costs were $3 million, $2 million, and $3 million, respectively. These net operating lease costs are reflected in occupancy expenses in our consolidated income statements.
The following table presents other information related to our operating leases as of the periods indicated:
December 31, 2025 | December 31, 2024 | |||||||
Other information: | ||||||||
Weighted-average remaining lease term - operating leases, in years | 17.5 | 6.3 | ||||||
Weighted-average discount rate - operating leases |
| 8.4 | % |
| 4.0 | % | ||
The following table summarizes the maturity of remaining lease liabilities:
As of | |||
(dollars in thousands) | December 31, 2025 | ||
Lease payments due: | |||
2026 | $ | 7,205 | |
2027 | 7,242 | ||
2028 | 7,089 | ||
2029 | 6,641 | ||
2030 | 5,883 | ||
Thereafter |
| 91,751 | |
Total lease payments | 125,811 | ||
Less: imputed interest | (64,471) | ||
Lease liabilities | $ | 61,340 | |
As of December 31, 2025, the Company did not have any operating leases that had not yet commenced that would create additional lease liabilities and right-of-use assets for the Company. The amount of expense related to short-term leases recognized for the years ended December 31, 2025 and 2024 were immaterial, and $1 million for the year ended December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Apr 29, 2025 | |
| 2023 | Oct 15, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 16, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.