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What changed in Primis Financial Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Primis Financial Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+396 added−341 removedSource: 10-K (2025-04-29) vs 10-K (2024-10-15)

Top changes in Primis Financial Corp.'s 2024 10-K

396 paragraphs added · 341 removed · 280 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

70 edited+21 added−6 removed142 unchanged
Biggest changePrimis is continually investing in our workforce to further emphasize diversity, equity and inclusion (“DEI”) and to foster our employees' growth and career development. As of December 31, 2023, we had 528 employees, nearly all of whom are full-time and of which approximately 64% were female and 21% were minorities. ​ Employee Feedback.
Biggest changeAs of December 31, 2024, we had 592 employees, nearly all of whom are full-time and of which approximately 63% were female and 20% were minorities. All of our employees are chosen on the basis of their qualifications and merit. ​ Employee Feedback. Fostering an inclusive environment requires that all employees are heard.
Our compensation practices are subject to oversight by the Federal Reserve and by other financial regulatory agencies. The federal banking regulators have issued joint guidance on executive compensation designed to ensure that the incentive compensation policies of banking organizations take into account risk factors and are consistent with the safety and soundness of the organization.
Our compensation practices are subject to oversight by the Federal Reserve and by other financial regulatory agencies. The federal banking regulators issued joint guidance on executive compensation designed to ensure that the incentive compensation policies of banking organizations take into account risk factors and are consistent with the safety and soundness of the organization.
The Company is headquartered in McLean, Virginia and has an administrative office in Glen Allen, Virginia and an operations center in Atlee, Virginia. Primis Mortgage Company, a residential mortgage lender headquartered in Wilmington, North Carolina, is also a consolidated subsidiary of Primis Bank.
The Company is headquartered in McLean, Virginia and has an administrative office in Glen Allen, Virginia and an operations center in Atlee, Virginia. Primis Mortgage Company, a residential mortgage lender headquartered in Wilmington, North Carolina, is a consolidated subsidiary of Primis Bank.
The SBA programs provide economic development programs which finance start-up and expansion of small businesses. We are a nationwide Preferred Lender. As an SBA Preferred Lender, our pre-approved status allows us to quickly respond to customers’ needs. Under the SBA program, we generally originate and fund SBA 7(a) and 504 loans.
The SBA programs provide economic development programs which finance start-up and expansion of small businesses. We are a nationwide Preferred 7 Table of Contents Lender. As an SBA Preferred Lender, our pre-approved status allows us to quickly respond to customers’ needs. Under the SBA program, we generally originate and fund SBA 7(a) and 504 loans.
The principal provisions of Title III of the USA PATRIOT Act require that regulated financial institutions, including state member banks: (i) establish an anti-money laundering program that includes training and audit components; (ii) comply with regulations regarding the verification of the identity of any person seeking to open an account; (iii) take additional required precautions with non-U.S. owned accounts; and (iv) perform certain verification and certification of money laundering risk for their foreign correspondent banking relationships.
The principal provisions of Title III of the USA PATRIOT Act require that regulated financial institutions, including state member banks: (i) establish an anti-money 18 Table of Contents laundering program that includes training and audit components; (ii) comply with regulations regarding the verification of the identity of any person seeking to open an account; (iii) take additional required precautions with non-U.S. owned accounts; and (iv) perform certain verification and certification of money laundering risk for their foreign correspondent banking relationships.
The terms of any such supervisory action could have a material negative effect on our business, reputation, operating flexibility, financial condition, and the value of our capital stock. 11 Table of Contents ​ Supervision, regulation, and examination of Primis, the Bank, and our respective subsidiaries by the appropriate regulatory agencies, as described herein, are intended primarily for the protection of consumers, bank depositors and the Deposit Insurance Fund (“DIF”) of The Federal Deposit Insurance Corporation (“FDIC”) and the U.S. banking and financial system, rather than holders of our capital stock.
The terms of any such supervisory action could have a material negative effect on our business, reputation, operating flexibility, financial condition, and the value of our capital stock. ​ Supervision, regulation, and examination of Primis, the Bank, and our respective subsidiaries by the appropriate regulatory agencies, as described herein, are intended primarily for the protection of consumers, bank depositors and the Deposit Insurance Fund (“DIF”) of The Federal Deposit Insurance Corporation (“FDIC”) and the U.S. banking and financial system, rather than holders of our capital stock.
As further described below, each of Primis and the Bank is well-capitalized as of December 31, 2023, and Primis Bank achieved a rating of “Satisfactory” in its most recent CRA evaluation. Source of Strength Obligations. A bank holding company is required to act as a source of financial and managerial strength to its subsidiary bank.
As further described below, each of Primis and the Bank is well-capitalized as of December 31, 2024, and Primis Bank achieved a rating of “Satisfactory” in its most recent CRA evaluation. Source of Strength Obligations. A bank holding company is required to act as a source of financial and managerial strength to its subsidiary bank.
In addition, the Dodd-Frank Act requires the federal banking agencies and the SEC to issue regulations requiring covered financial institutions to prohibit incentive compensation arrangements that encourage inappropriate risks by providing compensation that is excessive or that could lead to material financial loss to the institution.
In addition, the Dodd-Frank Act required the federal banking agencies and the SEC to issue regulations requiring covered financial institutions to prohibit incentive compensation arrangements that encourage inappropriate risks by providing compensation that is excessive or that could lead to material financial loss to the institution.
PFH, is a consolidated subsidiary of Primis and owns the rights to the Panacea Financial brand and its intellectual property and partners with the Bank to offer a suite of financial products and services for doctors, their practices, and ultimately the broader healthcare industry.
PFH is a consolidated subsidiary of Primis and owns the rights to the Panacea Financial brand and its intellectual property and partners with the Bank to offer a suite of financial products and services for doctors, veterinarians, dentists, their practices, and ultimately the broader healthcare industry.
Numerous other statutes and regulations also will have an impact on the operations of Primis and the Bank. Supervision, regulation and examination of banks by the regulatory agencies are intended primarily for the protection of depositors, not shareholders. ​ ​ 20 Table of Contents
Numerous other statutes and regulations also will have an impact on the operations of Primis and the Bank. Supervision, regulation and examination of banks by the regulatory agencies are intended primarily for the protection of depositors, not shareholders. ​ ​ 21 Table of Contents
The Federal Reserve has adopted the Federal Financial Institutions Examination Council’s (“FFIEC”) rating system and assigns each financial institution a confidential composite rating based on an evaluation and rating of six essential components of an institution’s financial condition and operations, including Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Sensitivity to Market Risk, as well as the quality of risk management practices. ​ Consumer Protection.
The Federal Reserve has adopted the Federal Financial Institutions Examination Council’s (“FFIEC”) rating system and assigns each financial institution a confidential composite rating based on an evaluation and rating of six essential components of an institution’s 17 Table of Contents financial condition and operations, including Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Sensitivity to Market Risk, as well as the quality of risk management practices. ​ Consumer Protection.
In addition, the Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution, including those of the parent bank holding company. ​ 17 Table of Contents Insider Transactions.
In addition, the Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution, including those of the parent bank holding company. ​ Insider Transactions.
In June 2023, the SEC approved the proposed clawback listing standards of the Nasdaq Stock Market, LLC (“Nasdaq”), which now require Nasdaq-listed companies, to (i) adopt and implement a compliant clawback policy; (ii) file the clawback policy as an exhibit to their annual reports; and (iii) provide certain disclosures relating to any compensation recovery triggered by the clawback policy.
In June 2023, the SEC approved the proposed clawback listing standards of the Nasdaq Stock Market, LLC (“Nasdaq”), which required Nasdaq-listed companies, to (i) adopt and implement a compliant clawback policy; (ii) file the clawback policy as an exhibit to their annual reports; and (iii) provide certain disclosures relating to any compensation recovery triggered by the clawback policy.
If the Federal Reserve were to apply the same or a similar well-capitalized standard to bank holding companies as that applicable to the Bank, Primis’ capital ratios as of December 31, 2023 would exceed such revised well-capitalized standard.
If the Federal Reserve were to apply the same or a similar well-capitalized standard to bank holding companies as that applicable to the Bank, Primis’ capital ratios as of December 31, 2024 would exceed such revised well-capitalized standard.
Under the final rule, if a qualifying community banking organization elects to use the CBLR framework, it will be considered “well-capitalized” so long as its CBLR is greater than 9%. Primis does not use the CBLR framework. Payment of Dividends Primis is a legal entity separate and distinct from the Bank and other subsidiaries.
Under the final rule, if a qualifying community banking organization elects to use the CBLR framework, it will be considered “well-capitalized” so long as its CBLR is greater than 9%. Primis does not use the CBLR framework. ​ 16 Table of Contents Payment of Dividends Primis is a legal entity separate and distinct from the Bank and other subsidiaries.
As of December 31, 2023, Primis Bank had twenty-four full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland.
As of December 31, 2024, Primis Bank had twenty-four full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland.
Our underwriting guidelines are tailored for particular credit types, including lines of credit, revolving credit facilities, demand loans, term 9 Table of Contents loans, equipment loans, real estate loans, SBA loans, stand-by letters of credit and unsecured loans. We will make extensions of credit based, among other factors, on the potential borrower’s creditworthiness and likelihood of repayment.
Our underwriting guidelines are tailored for particular credit types, including lines of credit, revolving credit facilities, demand loans, term loans, equipment loans, real estate loans, SBA loans, stand-by letters of credit and unsecured loans. We will make extensions of credit based, among other factors, on the potential borrower’s creditworthiness and likelihood of repayment.
Primis has adopted and implemented policies and procedures to comply with these privacy, information security, and cybersecurity requirements. The federal banking 19 Table of Contents agencies require banks to notify their regulators within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.” ​ Non-Discrimination Policies.
Primis has adopted and implemented policies and procedures to comply with these privacy, information security, and cybersecurity requirements. The federal banking agencies require banks to notify their regulators within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.” ​ Non-Discrimination Policies.
Therefore, despite the growth in the Bank’s loan portfolio, Primis has taken measures to ensure it maintains a strong asset quality by upholding its well-defined underwriting standards. ​ ● Building a Stable Core Deposit Base . Primis continues to grow a stable core deposit base of business and retail customers.
Therefore, despite the growth in the Bank’s loan portfolio, Primis has taken measures to ensure it maintains a strong asset quality by upholding its well-defined underwriting standards. 6 Table of Contents ​ ● Building a Stable Core Deposit Base . Primis continues to grow a stable core deposit base of business and retail customers.
In addition, the FDIC provides that any insured depository institution generally will be liable for any loss incurred by the FDIC in connection with the default of, or any assistance provided by the FDIC to, a commonly controlled insured depository institution. The Bank is an FDIC-insured depository institution and thus subject to these requirements. ​ 12 Table of Contents Acquisitions.
In addition, the FDIC provides that any insured depository institution generally will be liable for any loss incurred by the FDIC in connection with the default of, or any assistance provided by the FDIC to, a commonly controlled insured depository institution. The Bank is an FDIC-insured depository institution and thus subject to these requirements. ​ Acquisitions.
The Federal Deposit Insurance Act requires the federal prudential bank regulatory agencies, such as the Federal Reserve, to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal controls; (2) information systems and audit systems; (3) loan documentation; 16 Table of Contents (4) credit underwriting; (5) interest rate risk exposure; and (6) asset quality.
The Federal Deposit Insurance Act requires the federal prudential bank regulatory agencies, such as the Federal Reserve, to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal controls; (2) information systems and audit systems; (3) loan documentation; (4) credit underwriting; (5) interest rate risk exposure; and (6) asset quality.
In particular, we are required to include management and independent registered public accounting firm reports on internal controls as part of our Annual Report 13 Table of Contents on Form 10-K in order to comply with Section 404 of the Sarbanes-Oxley Act.
In particular, we are required to include management and independent registered public accounting firm reports on internal controls as part of our Annual Report on Form 10-K in order to comply with Section 404 of the Sarbanes-Oxley Act.
Additionally, its In-Training Medical/Dental School Loan Refinance product allows physicians and dentists that are in training the opportunity to refinance their student debt at a lower interest rate, while benefiting from affordable monthly payments during training. As of December 31, 2023, Panacea Financial had approximately $322.8 million in outstanding loans.
Additionally, its In-Training Medical/Dental School Loan Refinance product allows physicians and dentists that are in training the opportunity to refinance their student debt at a lower interest rate, while benefiting from affordable monthly payments during training. As of December 31, 2024, Panacea Financial had approximately $433.8 million in outstanding loans.
We have instituted a no exceptions policy for our consumer credit programs. ​ Deposit Activities Overview ​ We offer a broad range of deposit products, including checking, NOW, savings, and money market accounts and certificates of deposit, supporting the needs of businesses and individuals.
We have instituted a no exceptions policy for our consumer credit programs. ​ ​ 8 Table of Contents ​ Deposit Activities Overview ​ We offer a broad range of deposit products, including checking, NOW, savings, and money market accounts and certificates of deposit, supporting the needs of businesses and individuals.
Primis is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act and has elected to be a financial holding company. As a financial holding company, Primis is permitted to engage directly or indirectly in a broader range of activities than those permitted for a bank holding company.
Primis is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act and has elected to be a financial holding company. As a financial holding company, Primis is permitted to 12 Table of Contents engage directly or indirectly in a broader range of activities than those permitted for a bank holding company.
Under the federal Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to and obtain approval from the Federal Reserve before acquiring control of any bank holding company, such as Primis.
Under the federal Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to and obtain approval from 13 Table of Contents the Federal Reserve before acquiring control of any bank holding company, such as Primis.
The primary factors we encounter in competing for deposits are convenient office locations and rates offered. Direct competition for deposits comes from other commercial bank and thrift institutions, money market mutual funds and corporate and government securities which may offer more attractive rates than insured depository institutions are willing to pay.
The primary factors we encounter in competing for deposits are convenient office locations 10 Table of Contents and rates offered. Direct competition for deposits comes from other commercial bank and thrift institutions, money market mutual funds and corporate and government securities which may offer more attractive rates than insured depository institutions are willing to pay.
The product provides for a 10 year draw period followed by a 20 year repayment period. 7 Table of Contents Secured Personal Loans. Primis offers secured personal loans for a variety of purposes including auto, motorcycle, boats, and recreational vehicles. Pledged collateral could also include marketable securities and certificates of deposits. Life Premium Finance. Primis offers life insurance premium financing.
The product provides for a 10 year draw period followed by a 20 year repayment period. Secured Personal Loans. Primis offers secured personal loans for a variety of purposes including auto, motorcycle, boats, and recreational vehicles. Pledged collateral could also include marketable securities and certificates of deposits. Life Premium Finance. Primis offered life insurance premium financing.
In addition, bank regulatory agencies may issue enforcement actions, policy statements, interpretive letters and similar written guidance applicable to us or the Bank.
In addition, bank regulatory agencies may issue enforcement actions, policy statements, interpretive letters and similar written guidance applicable to us.
In November 2020, the Company launched the Panacea Financial division, which focuses on providing unique financial products and services for the medical, dental and veterinary communities. Panacea Financial offers personal loans, student debt refinance and practice loans as well as deposit products nationally. Panacea Financial has partnerships with fourteen national and state associations.
Lines of Businesses ​ Panacea Financial. In November 2020, the Company launched the Panacea Financial division, which focuses on providing unique financial products and services for the medical, dental and veterinary communities. Panacea Financial offers personal loans, student debt refinance and practice loans as well as deposit products nationally. Panacea Financial has partnerships with 39 national and state associations.
The Guidance is triggered when CRE loan concentrations exceed either: ​ ● Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk based capital; or ● Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk based capital. ​ The Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type. 18 Table of Contents Community Reinvestment Act.
The Guidance is triggered when CRE loan concentrations exceed either: ​ ● Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk based capital; or ● Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk based capital. ​ The Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type.
Commercial deposit products are enhanced by a robust suite of treasury and cash management services, including: ● Investment/sweep accounts ● Wire transfer services ● Employer services/payroll processing services ● Zero balance accounts ● Night depository services ● Depository transfers ● Merchant services (third party) ● ACH originations ● Business debit cards ● Controlled disbursement accounts ● Remote deposit capture ● Mobile and online banking ​ Other products and services offered by the Bank include: Debit cards, ATM services, notary services, and wire transfer. ​ 8 Table of Contents Lines of Businesses ​ Panacea Financial.
Commercial deposit products are enhanced by a robust suite of treasury and cash management services, including: ● Investment/sweep accounts ● Wire transfer services ● Employer services/payroll processing services ● Zero balance accounts ● Night depository services ● Depository transfers ● Merchant services (third party) ● ACH originations ● Business debit cards ● Controlled disbursement accounts ● Remote deposit capture ● Mobile and online banking ​ Other products and services offered by the Bank include: Debit cards, ATM services, notary services, and wire transfer.
The leverage capital ratio, which serves as a minimum capital standard, is the ratio of Tier 1 capital to quarterly average total consolidated assets net of goodwill, certain other intangible assets, and certain required deduction items. The required minimum leverage ratio for all banks is 4%.
The leverage capital ratio, which serves as a minimum capital standard, is the ratio of Tier 1 capital to quarterly average total consolidated assets net of goodwill, certain other intangible assets, and certain required deduction items.
The guidance also provides that supervisory findings with respect to incentive compensation will be incorporated into the organization’s supervisory ratings, which can affect its ability to make acquisitions or other corporate decisions.
The guidance also provided that supervisory findings with respect to incentive compensation should be incorporated into the organization’s supervisory ratings, which can affect its ability to make acquisitions or other corporate decisions.
The loan is utilized to pay the annual premiums due on the whole or universal life policy. The loan is fully secured by the cash value of the policy and personal liquid assets of the borrower or guarantor. Unsecured Personal Loans.
The loan was utilized to pay the annual premiums due on the whole or universal life policy. The loan was fully secured by the cash value of the policy and personal liquid assets of the borrower or guarantor.
All credit extensions in excess of 60% of the Bank’s legal lending limit are also reviewed and approved by the Board of Directors. As of December 31, 2023, our legal lending limit was approximately $63.2 million. Portfolio management is an integral part of sound credit practices.
All credit extensions in excess of 60% of the Bank’s legal lending limit are also reviewed and approved by the Board of Directors. As of December 31, 2024, our legal lending limit was approximately $57.9 million. Portfolio management is an integral part of sound credit practices.
The guidance further provides that the regulators may pursue enforcement actions against a banking organization if its incentive compensation and related risk management, control or governance processes pose a risk to the organization’s safe and sound practices.
The guidance further provided that the regulators may pursue enforcement actions against a banking organization if its incentive compensation and related risk management, control or governance 14 Table of Contents processes pose a risk to the organization’s safe and sound practices.
In addition, effective January 1, 2019, the capital rules require a capital conservation buffer of CET1 of 2.5% above each of the minimum capital ratio requirements (CET1, Tier 1, and total risk-based capital), which is designed to absorb losses during periods of economic stress.
The required minimum leverage ratio for all banks is 4%. 15 Table of Contents In addition, effective January 1, 2019, the capital rules require a capital conservation buffer of CET1 of 2.5% above each of the minimum capital ratio requirements (CET1, Tier 1, and total risk-based capital), which is designed to absorb losses during periods of economic stress.
Our deposits are insured, up to applicable limits, by the Federal Deposit Insurance Corporation (the “FDIC”). ​ We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available free of charge on our website at www.primisbank.com as soon as reasonably practicable after we electronically file such material with the SEC.
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available free of charge on our website at www.primisbank.com as soon as reasonably practicable after we electronically file such material with the SEC.
Fostering an inclusive environment requires that all employees are heard. Our Intranet houses the “Employee Voice,” which is a vehicle for employees to make suggestions, asks questions or voice opinions regarding the Company’s practices. ​ Recruitment. While the majority of our employees reside in Virginia, our recruitment efforts are both local and nationwide.
Our Intranet contains the “Employee Voice,” which is a vehicle for employees to make suggestions, asks questions or voice opinions regarding the Company’s practices. ​ Recruitment. While the majority of our employees reside in Virginia, our recruitment efforts are both local and nationwide.
The Bank is subject to the provisions of the CRA, which imposes a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods. The Federal Reserve’s assessment of the Bank’s CRA record is made available to the public.
Community Reinvestment Act. The Bank is subject to the provisions of the CRA, which imposes a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods.
Primis Bank provides a range of financial services to individuals and small and medium-sized businesses. ​ As of December 31, 2023, Primis had $3.9 billion in total assets, $3.2 billion in total loans, $3.3 billion in total deposits and $397.6 million in total stockholders’ equity.
Primis Bank provides a range of financial services to individuals and small and medium-sized businesses. ​ As of December 31, 2024, Primis had $3.7 billion in total assets, $2.9 billion in total loans held for investment, $3.2 billion in total deposits and $365.0 million in total stockholders’ equity.
We are a Small Business Administration (“SBA”) lender with Preferred Lending Partner (“PLP”) status that allows us to offer this program nationwide. We also invest in real estate-related securities, including collateralized mortgage obligations and agency mortgage backed securities.
We are a Small Business Administration (“SBA”) lender with Preferred Lending Partner (“PLP”) status that allows us to offer this program nationwide. We also invest in real estate-related securities, including collateralized mortgage obligations and agency mortgage backed securities. Our principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings.
Among other things, the revised rules evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, apply a metrics-based benchmarking approach to assessment, and clarify eligible CRA activities.
Among other things, the revised rules evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, apply a metrics-based benchmarking approach to assessment, and clarify eligible CRA activities. The final rules were challenged in federal court and a preliminary injunction was granted in March 2024 enjoining implementation of the rules.
We utilize a wide range of recruitment vehicles ranging from college recruitment sites such as “Handshake”, a “V3” program to recruit veterans to posting on popular job boards and conducting nationwide profile searches to find diverse and qualified candidates.
We utilize a wide range of recruitment vehicles ranging from college recruitment sites such as “Handshake”, a “V3” program to recruit veterans to posting on popular job boards and conducting nationwide profile searches to find diverse and qualified candidates. Primis realizes that great people know other great people so we also offer a referral bonus to our employees. ​ Benefits.
Our clawback policy was approved by the board in November 2023 and is filed herein as Exhibit 97. ​ Shareholder Say-On-Pay Votes. The Dodd-Frank Act requires public companies to take shareholders’ votes on proposals addressing compensation (known as say-on-pay), the frequency of a say-on-pay vote, and the golden parachutes available to executives in connection with change-in-control transactions.
The Dodd-Frank Act requires public companies to take shareholders’ votes on proposals addressing compensation (known as say-on-pay), the frequency of a say-on-pay vote, and the golden parachutes available to executives in connection with change-in-control transactions.
In May 2022, Primis Bank acquired Primis Mortgage Company (previously SeaTrust Mortgage Company), a regional residential mortgage company headquartered in Wilmington, North Carolina. Primis Mortgage Company has since expanded to offer residential mortgages in the majority of the U.S. Residential mortgage loans originated through Primis Mortgage Company are primarily sold in the secondary market for fee income.
Primis Mortgage Company has since expanded to offer residential mortgages in the majority of the U.S. Residential mortgage loans originated through Primis Mortgage Company are primarily sold in the secondary market for fee income.
For insured institutions with total assets of $1.0 billion or more, financial statements prepared in accordance with U.S. GAAP, management’s certifications concerning responsibility for the financial statements, internal controls and compliance with legal requirements designated by the FDIC, and an attestation by the independent auditor regarding the statements of management relating to the internal controls must be submitted.
GAAP, management’s certifications concerning responsibility for the financial statements, internal controls and compliance with legal requirements designated by the FDIC, and an attestation by the independent auditor regarding the statements of management relating to the internal controls must be submitted.
Based on current estimates, we believe that Primis and the Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer in 2024.
Both Primis and the Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer as of December 31, 2024. Based on current estimates, we believe that Primis and the Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer in 2025.
These reports are also available without charge on the SEC’s website at www.sec.gov. ​ Strategy ​ Primis is focused on building a new, innovative, and better banking experience for its consumers and small and medium-sized businesses. The Bank intends to grow its business, expand its customer base and improve profitability by focusing on the following three areas: 1.
These reports are also available without charge on the SEC’s website at www.sec.gov. ​ Strategy ​ Primis is focused on building a new, innovative, and better banking experience for its consumers and small and medium-sized businesses.
Insured institutions with total assets of $500 million or more must submit annual audit reports prepared by independent auditors to federal and state regulators. In some instances, the audit report of the institution’s holding company can be used to satisfy this requirement. Independent auditors must receive examination reports, supervisory agreements and reports of enforcement actions.
In some instances, the audit report of the institution’s holding company can be used to satisfy this requirement. Independent auditors must receive examination reports, supervisory agreements and reports of enforcement actions. For insured institutions with total assets of $1.0 billion or more, financial statements prepared in accordance with U.S.
Primis offers unsecured personal loans up to $50,000 and overdraft protection loans up to $10,000, based on specified underwriting criteria. We also offer these types of loans through an agreement with a third-party that sources and originates them for us based on our credit underwriting criteria. Panacea Consumer Loans.
We also offer these types of loans through an agreement with a third-party that sources and originates them for us based on our credit underwriting criteria.
Management’s Discussion and Analysis of Financial Condition.” Commercial Lending ​ Commercial Business Lending. These loans consist of lines of credit, revolving credit facilities, demand loans, term loans, equipment loans, SBA loans, stand-by letters of credit, and unsecured loans.
These loans consist of lines of credit, revolving credit facilities, demand loans, term loans, equipment loans, SBA loans, stand-by letters of credit, and unsecured loans.
With V1BE, Primis is able to support any market and grow customer relationships without the need for a large branch presence. Funding and Revenue Sources The principal sources of funds for our lending and investment activities are deposits, repayment of loans, prepayments from mortgage-backed securities, repayments of maturing investment securities, Federal Home Loan Bank (“FHLB”) advances and other borrowed money.
Funding and Revenue Sources The principal sources of funds for our lending and investment activities are deposits, repayment of loans, prepayments from mortgage-backed securities, repayments of maturing investment securities, Federal Home Loan Bank (“FHLB”) advances and other borrowed money.
The following is a brief description of the relevant provisions of these capital rules and their potential impact on our capital levels. 14 Table of Contents Primis and the Bank are each subject to the following risk-based capital ratios: a common equity Tier 1 ("CET1") risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total risk-based capital ratio, which includes Tier 1 and Tier 2 capital.
Primis and the Bank are each subject to the following risk-based capital ratios: a common equity Tier 1 ("CET1") risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total risk-based capital ratio, which includes Tier 1 and Tier 2 capital.
Failure to meet minimum capital requirements could also result in restrictions on Primis’ or the Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth. 15 Table of Contents Both Primis and the Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer as of December 31, 2023.
Failure to meet minimum capital requirements could also result in restrictions on Primis’ or the Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth.
On October 24, 2023, the OCC, the FRB, and FDIC issued a final rule to modernize their respective CRA regulations. The revised rules substantially alter the methodology for assessing compliance with the CRA, with material aspects taking effect January 1, 2026 and revised data reporting requirements taking effect January 1, 2027.
The revised rules substantially alter the methodology for assessing compliance with the CRA, with material aspects taking effect January 1, 2026 and revised data reporting requirements taking effect January 1, 2027.
We offer three different medical plans, two of which allow for the employee to make contributions and receive an employer match on a Health Savings Account. In addition to dental insurance, supplemental insurance and a 401k, Primis offers employer paid short-term and long-term disability and life insurance.
Primis offers a comprehensive and competitive benefits package to meet a variety of individual needs. We offer three different medical plans, two of which allow for the employee to make contributions and receive an employer match on a Health Savings Account.
Continuing education and advanced training is offered to employees throughout their tenure at Primis. We encourage all employees to obtain job related training by covering the cost of the classes and/or learning materials and tests. ​ Volunteerism . Primis is committed to the communities we serve and to supporting our employees in their volunteerism.
New employees are also required to complete multiple learning modules that cover important compliance and regulatory requirements in the banking industry. Continuing education and advanced training is offered to employees throughout their tenure. We encourage all employees to obtain job related training by covering the cost of the classes and/or learning materials and tests.
Since the Company’s board of 5 Table of Contents directors appointed Mr. Dennis J. Zember, Jr. as the Chief Executive Officer, effective February 19, 2020, Mr. Zember has added several members to the executive management team. These additional members all bring strong expertise and years of experience. ​ ● Leveraging the Existing Foundation for Additional Growth.
The experience and market knowledge of the Bank’s management team is one of its greatest strengths and competitive advantages. Since the Company’s board of directors appointed Mr. Dennis J. Zember, Jr. as the Chief Executive Officer, effective February 19, 2020, Mr. Zember has added several members to the executive management team.
Our principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings. 6 Table of Contents The following is a discussion of each of the major types of lending in which we engage. For more information on our lending activities, see “Item 7.
The following is a discussion of each of the major types of lending in which we engage. For more information on our lending activities, see “Item 7. Management’s Discussion and Analysis of Financial Condition” (“MD&A”). Commercial Lending ​ Commercial Business Lending.
During the year ended December 31, 2023, Primis Mortgage originated $592.3 million loans. Digital Banking ​ In 2022, Primis successfully launched its digital bank platform. The platform includes an all-new mobile banking application that provides a quick and seamless account opening process all from within the app.
With V1BE, Primis is able to support any market and grow customer relationships without the need for a large branch presence. In 2022, Primis successfully launched its digital bank platform. The platform includes an all-new mobile banking application that provides a quick and seamless account opening process all from within the app.
Perfecting enhanced digital offerings that allow Primis to attract new deposit customers at scale both in and out of our footprint. ​ Critical to executing this approach: ● Utilizing the Primis Management Team’s Strength . The experience and market knowledge of the Bank’s management team is one of its greatest strengths and competitive advantages.
Perfecting enhanced digital offerings that allow Primis to attract new deposit customers at scale both in and out of our footprint. a.
Further, a less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities and prevent a company from becoming or remaining a financial holding company. Federal CRA regulations require, among other things, that evidence of discrimination against applicants on a prohibited basis, and illegal or abusive lending practices be considered in the CRA evaluation.
The Federal Reserve’s assessment of the Bank’s CRA record is made available to the public. Further, a less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities and prevent a company from becoming or remaining a financial holding company.
The final rules may make it more challenging and/or costly for the Bank to receive a rating of at least “satisfactory” on its CRA exam. Consumer Regulation. Activities of the Bank are subject to a variety of statutes and regulations designed to protect consumers.
The effective dates will be extended for each day the injunction remains in place, pending the resolution of the 19 Table of Contents lawsuit. If the final rules are reinstated, they are likely to make it more challenging and/or costly for the Bank to receive a rating of at least “satisfactory” on its CRA exam. Consumer Regulation.
During 2023 we brought in over $1 billion in deposits through our digital platform. In 2021, Primis launched its V1BE service, the first bank delivery app for on-demand ordering of branch services.
During the year ended December 31, 2024, Primis Mortgage originated $776.5 million of loans. 9 Table of Contents Digital Banking ​ In 2021, Primis launched its V1BE service, the first bank delivery app for on-demand ordering of branch services.
Our employees also enjoy an incentive for participating in our Wellness Program. ​ Development. All new employees benefit from training to learn how to utilize key Company systems. New employees are also required to complete multiple learning modules that cover important compliance and regulatory requirements in the banking industry.
In addition to dental insurance, supplemental insurance and a 401k, we offer employer paid short-term and long-term disability and life insurance. Our employees also enjoy an incentive for participating in our Wellness Program. ​ Development. All new employees benefit from training to learn how to utilize our key systems.
In addition to providing financial products built for the needs of our customers, the Company uses associate volunteerism and corporate philanthropy to build strong community partnerships. Our employees volunteered for 200 hours in 2023. ​ SUPERVISION AND REGULATION Bank holding companies and banks are extensively regulated under federal and state law.
Our employees volunteered 179 hours in 2024. ​ 11 Table of Contents SUPERVISION AND REGULATION Bank holding companies and banks are extensively regulated under federal and state law.
Maintaining a strong and efficient community bank in core markets; 2. Supplementing core community bank growth and profitability with business lines that can generate above-average risk-adjusted returns such as the Panacea Financial Division, the Life Premium Finance Division and Primis Mortgage Company; and 3.
In these markets we increased deposits per branch (excluding digital platform deposits) to $91.1 million as of December 31, 2024 versus $69.1 million as of December 31, 2021 2. Supplementing core community bank growth and profitability with business lines that can generate above-average risk-adjusted returns such as: a.
The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA. ​ LIBOR.
The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA. ​ 20 Table of Contents Audit Reports . Insured institutions with total assets of $500 million or more must submit annual audit reports prepared by independent auditors to federal and state regulators.
Removed
As of December 31, 2023, the Life Premium Finance Division had outstanding balances, net of deferred fees, of $382.1 million. Outstanding balances on these loans grow over three to five years. Consequently, the Company expects a sustainable growth rate in the division with each new loan originated. Primis Mortgage Company.
Added
Primis Bank’s deposits are insured, up to applicable limits, by the Federal Deposit Insurance Corporation (the “FDIC”).
Removed
Primis realizes that great people know other great people so we also offer a referral bonus to our employees. ​ 10 Table of Contents Benefits. Primis offers a comprehensive and competitive benefits package to meet a variety of individual needs.
Added
The Bank intends to grow its business, expand its customer base and improve profitability by focusing on the following three areas: 5 Table of Contents 1. Maintaining a strong and efficient community bank in core markets; a. The Bank maintains twenty-four office locations in attractive markets in Virginia and the Greater Washington, D.C. market b.
Removed
Each employee receives eight paid hours to volunteer in their community or charity of choice each year. We maintain a commitment to the prosperity of each community the Company serves, donating to community, civic and philanthropic organizations in 2023.
Added
The Panacea Financial Division, the Bank’s health-care focused brand which ended 2024 with $433.8 million of loans and $92.3 million of deposits. This was up from December 31, 2023 when loans were $322.8 million and deposits were $56.1 million. b.
Removed
On March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) to address references to LIBOR in contracts that (i) are governed by U.S. law; (ii) will not mature before June 30, 2023; and (iii) lack fallback provisions providing for a clearly defined and practicable replacement for LIBOR.
Added
Primis Mortgage Company, the Bank’s retail mortgage company with production of approximately $800 million in 43 states in 2024, up from $600 million in 2023; and c. Mortgage Warehouse Lending, the Bank’s recently expanded business line focused on lending to the independent mortgage company space with approximately $400 million in approved lines. 3.
Removed
On December 16, 2022, the FRB adopted a final rule to implement the LIBOR Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023.
Added
Deposits on the Bank’s digital platform ended 2024 at $985.5 million with an average balance of $56 thousand, compared to $909.4 million with an average balance of $64 thousand as of December 31, 2023. ​ Critical to executing this approach: ● Utilizing the Primis Management Team’s Strength .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe also anticipate increased regulatory scrutiny – in the course of routine examinations and otherwise – and new regulations directed towards banks of similar size to the Bank, designed to address the negative developments in the banking industry, all of which may increase the Company’s costs of doing business and reduce its profitability.
Biggest changeAdditionally, we could be impacted by current or future negative perceptions and expectations about the prospects for the financial services industry which could worsen over time and result in downward pressure on, and continued or accelerated volatility of, bank securities. 35 Table of Contents We may also face increased regulatory scrutiny – in the course of routine examinations and otherwise – and new regulations directed towards banks of similar size to the Bank, which may increase the Company’s costs of doing business and reduce its profitability.
The Company’s mortgage revenue is cyclical and is sensitive to the level of interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits. ​ The Bank originates residential mortgage loans through Primis Mortgage Company which lends to borrowers nationwide.
Our mortgage revenue is cyclical and is sensitive to the level of interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits. ​ The Bank originates residential mortgage loans through Primis Mortgage Company which lends to borrowers nationwide.
GAAP with the use of various assumptions including borrower pre-payment, expected credit losses, and third-party servicer credit risk. Assumptions used to determine the value of the derivative are sensitive to various factors not within our control that include borrower repayment risk and the credit risk of the third-party servicer.
GAAP with the use of various assumptions including borrower pre-payment, expected credit losses, and the third-party servicer’s credit risk. Assumptions used to determine the value of the derivative are sensitive to various factors not within our control that include borrower repayment risk and the credit risk of the third-party servicer.
Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers.
Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals, our plans to continue to provide internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers.
Our stock price can fluctuate significantly in response to a variety of factors including, among other things: ● actual or anticipated variations in quarterly results of operations; 27 Table of Contents ● recommendations by securities analysts; ● operating and stock price performance of other companies that investors deem comparable to us; ● news reports relating to trends, concerns and other issues in the financial services industry; ● perceptions in the marketplace regarding us and/or our competitors; ● new technology used, or services offered, by competitors; ● significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; ● failure to integrate acquisitions or realize anticipated benefits from acquisitions; ● changes in valuations of Goodwill and other Intangible Assets; ● changes in government regulations; and ● geopolitical conditions such as acts or threats of terrorism, military conflicts or pandemics.
Our stock price can fluctuate significantly in response to a variety of factors including, among other things: ● actual or anticipated variations in quarterly results of operations; ● recommendations by securities analysts; ● operating and stock price performance of other companies that investors deem comparable to us; ● news reports relating to trends, concerns and other issues in the financial services industry; ● perceptions in the marketplace regarding us and/or our competitors; ● new technology used, or services offered, by competitors; ● significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; ● failure to integrate acquisitions or realize anticipated benefits from acquisitions; ● changes in valuations of Goodwill and other Intangible Assets; ● changes in government regulations; and ● geopolitical conditions such as acts or threats of terrorism, military conflicts or pandemics.
If such reserves were insufficient to cover claims from investors, such repurchases or settlements would adversely affect our financial condition and results of operations. ​ 25 Table of Contents Market Risks Our profitability depends significantly on local economic conditions in the areas where our operations and loans are concentrated, and our geographic concentration makes us vulnerable to local weather catastrophes, public health issues, and other external events, which could adversely affect our results of operations and financial condition.
If such reserves were insufficient to cover claims from investors, such repurchases or settlements would adversely affect our financial condition and results of operations. 26 Table of Contents Market Risks Our profitability depends significantly on local economic conditions in the areas where our operations and loans are concentrated, and our geographic concentration makes us vulnerable to local weather catastrophes, public health issues, and other external events, which could adversely affect our results of operations and financial condition.
Achieving the anticipated benefits of these mergers is subject to a number of uncertainties, including whether we integrate these institutions in an efficient and effective manner, and general competitive factors in the marketplace.
Achieving the anticipated benefits of these mergers and acquisitions is subject to a number of uncertainties, including whether we integrate these institutions in an efficient and effective manner, and general competitive factors in the marketplace.
During the year end December 31, 2023, management identified material weaknessess in its internal controls over financial reporting related to (i) properly assessing the accounting treatment for certain loan transfer transactions, (ii) properly assessing the accounting treatment for an agreement with a third-party to originate and manage a portfolio of consumer loans, and (iii) a process to evaluate expected credit losses on its third-party originated and managed consumer loan portfolio.
During the year end December 31, 2023, management identified material weaknesses in its internal controls over financial reporting related to (i) properly assessing the accounting treatment for certain loan transfer transactions, (ii) properly assessing the accounting treatment for an agreement with a third-party to originate and manage a portfolio of consumer loans, and (iii) a process to evaluate expected credit losses on its third-party originated and managed consumer loan portfolio.
Real estate construction and land development loans may involve the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan and also present risks of default in the event of declines in property values or volatility in the real estate market during the 22 Table of Contents construction phase.
Real estate construction and land development loans may involve the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan and also present risks of default in the event of declines in property values or volatility in the real estate market during the 23 Table of Contents construction phase.
The Company’s and its customers’ exposure to fraud may increase the Company’s financial risk and reputation risk as it may result in unexpected loan losses that exceed those that have been provided for in the allowance for credit losses. ​ We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business.
Our customers’ and our exposure to fraud may increase our financial risk and reputation risk as it may result in unexpected loan losses that exceed those that have been provided for in the allowance for credit losses. ​ We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business.
Technology in employees’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices. The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk.
Technology in employees’ homes may not be as robust as in our offices and could cause the security of the networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices. The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risks.
We may be required to pay significantly higher FDIC premiums if market developments change such that the DIF balance is reduced or the FDIC changes its rules to require higher premiums. 32 Table of Contents Liquidity Risks Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows.
We may be required to pay significantly higher FDIC premiums if market developments change such that the DIF balance is reduced or the FDIC changes its rules to require higher premiums. ​ 34 Table of Contents Liquidity Risks Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows.
Based on our commercial real estate concentration as of December 31, 2023, we believe that we are operating within the guidelines. However, increases in our commercial real estate lending could subject us to additional supervisory analysis. We cannot guarantee that any risk management practices we implement will be effective to prevent losses relating to our commercial real estate portfolio.
Based on our commercial real estate concentration as of December 31, 2024, we believe that we are operating within the guidelines. However, increases in our commercial real estate lending could subject us to additional supervisory analysis. We cannot guarantee that any risk management practices we implement will be effective to prevent losses relating to our commercial real estate portfolio.
These risks are discussed more fully after the summary, and risks include, but are not limited to, the following: ● We are subject to risks related to our concentration of construction and land development and commercial real estate loans. ● We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan we have no recourse to collateral in which to recover any potential losses. ● A portion of our consumer loan portfolio is originated and serviced by a third-party and includes a credit enhancement from that third-party which may not be realizable. ● A significant amount of our third-party serviced consumer loans were originated with a zero interest promotional period, exposing us to the credit risk of the third-party that is providing reimbursement to us for interest foregone. ● A significant amount of our loans are secured by real estate and any declines in real estate values in our primary markets could be detrimental to our financial condition and results of operations. ● If our nonperforming assets increase, our earnings will suffer. ● If our allowance for credit losses is not adequate to cover actual loan losses, our earnings will decrease. ● We are subject to credit quality risks and our credit policies may not be sufficient to avoid losses. ● The Company’s mortgage revenue is cyclical and is sensitive to the level of interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits. ● Our geographic concentration makes us vulnerable to local weather catastrophes, public health issues, and other external events, which could adversely affect our results of operations and financial condition. ● Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance. ● Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations. ● Declines in asset values may result in impairment charges and adversely affect the value of our investment securities, financial performance and capital. ● The value of an estimated reimbursement due from a third-party that originated consumer loans with promotional features on our behalf is recorded in our balance sheet at fair value as a derivative and actual results and a significant decline in the third-party’s credit risk may impact the value of the derivative and our ability to realize that value. ● Our stock price can be volatile. ● The trading volume in our common stock is less than that of other larger financial services companies. ● Inflation could negatively impact our business, our profitability and our stock price. ● ESG risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price. 21 Table of Contents ● Our business strategy includes strategic growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. ● We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated. ● New lines of business, products or services and technological advancements may subject us to additional risks. ● We may not be able to successfully integrate our acquisitions or to realize the anticipated benefits of them. ● The carrying value of goodwill and other intangible assets may be adversely affected. ● We rely on third-party vendors to provide key components of our business infrastructure. ● We face significant cyber and data security risk that could result in the disclosure of confidential information, adversely affect our business or reputation and expose us to significant liabilities. ● Our business is susceptible to fraud. ● We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business. ● Deposit insurance premiums levied against banks may increase if the number of bank failures increase or the cost of resolving failed banks increases. ● Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows. ● Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and its financial condition and results of operations. ● Future growth or operating results may require us to raise additional capital, but that capital may not be available, be available on unfavorable terms or may be dilutive. ● We may issue a new series of preferred stock or debt securities, which would be senior to our common stock and may cause the market price of our common stock to decline. ● We currently intend to pay dividends on our common stock; however, our future ability to pay dividends is subject to restrictions. ● Changes in applicable laws and regulations or failures to comply with such laws and regulations may adversely affect our operations and our financial results. ● Primis and the Bank must maintain certain required levels of regulatory capital that may limit our operations and potential growth. ● We are subject to commercial real estate lending guidance issued by the federal banking regulators that impacts our operations and capital requirements. ● Changes in accounting standards or assumptions in applying accounting policies could adversely affect us. ● Failure to maintain an effective system of disclosure controls and procedures could have a material adverse effect on our business, results of operations and financial condition and could impact the price of our common stock. ​ Credit Risks We are subject to risks related to our concentration of construction and land development and commercial real estate loans.
These risks are discussed more fully after the summary, and risks include, but are not limited to, the following: ● We are subject to risks related to our concentration of construction and land development and commercial real estate loans. ● We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan we have no recourse to collateral in which to recover any potential losses. ● A portion of our consumer loan portfolio is originated and serviced by a third-party and includes a credit enhancement from that third-party which may not be realizable. ● A significant amount of our third-party serviced consumer loans were originated with a zero interest promotional period, exposing us to the credit risk of the third-party that is providing reimbursement to us for interest foregone. ● A significant amount of our loans are secured by real estate and any declines in real estate values in our primary markets could be detrimental to our financial condition and results of operations. ● If our nonperforming assets increase, our earnings will suffer. ● If our allowance for credit losses is not adequate to cover actual loan losses, our earnings will decrease. ● We are subject to credit quality risks and our credit policies may not be sufficient to avoid losses. ● Our mortgage revenue is cyclical and is sensitive to the level of interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits. ● Our geographic concentration makes us vulnerable to local weather catastrophes, public health issues, and other external events, which could adversely affect our results of operations and financial condition. ● Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance. ● Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations. ● Declines in asset values may result in impairment charges and adversely affect the value of our investment securities, financial performance and capital. ● The value of an estimated reimbursement due from a third-party that originated consumer loans with promotional features on our behalf is recorded in our balance sheet at fair value as a derivative and actual results and a significant decline in the third-party’s credit risk may impact the value of the derivative and our ability to realize that value. ● We may be unable to sell loans at the estimated market price utilized to record them in held for sale ● Our stock price can be volatile. ● The trading volume in our common stock is less than that of other larger financial services companies. ● Inflation could negatively impact our business, our profitability and our stock price. ● ESG and diversity, equity and inclusion (“DEI”) risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price. 22 Table of Contents ● Our business strategy includes strategic growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. ● We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated. ● New lines of business, products or services and technological advancements may subject us to additional risks. ● We may not be able to successfully integrate our acquisitions or to realize the anticipated benefits of them. ● The carrying value of goodwill and other intangible assets may be adversely affected. ● We rely on third-party vendors to provide key components of our business infrastructure. ● We face significant cyber and data security risk that could result in the disclosure of sensitive, confidential and/or nonpublic personal information, adversely affect our business or reputation and expose us to significant liabilities. ● Our business is susceptible to fraud. ● We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business. ● Deposit insurance premiums levied against banks may increase if the number of bank failures increase or the cost of resolving failed banks increases. ● Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows. ● Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and its financial condition and results of operations. ● Future growth or operating results may require us to raise additional capital, but that capital may not be available, be available on unfavorable terms or may be dilutive. ● We may issue a new series of preferred stock or debt securities, which would be senior to our common stock and may cause the market price of our common stock to decline. ● We currently intend to pay dividends on our common stock; however, our future ability to pay dividends is subject to restrictions. ● Changes in applicable laws and regulations or failures to comply with such laws and regulations may adversely affect our operations and our financial results. ● Primis and the Bank must maintain certain required levels of regulatory capital that may limit our operations and potential growth. ● We are subject to commercial real estate lending guidance issued by the federal banking regulators that impacts our operations and capital requirements. ● Changes in accounting standards or assumptions in applying accounting policies could adversely affect us. ● Failure to maintain an effective system of disclosure controls and procedures could have a material adverse effect on our business, results of operations and financial condition and could impact the price of our common stock. ​ Credit Risks We are subject to risks related to our concentration of construction and land development and commercial real estate loans.
Methods used to attack information systems change frequently (with generally increasing sophistication), often are not recognized until launched against a target, may be supported by foreign governments or other well-financed entities, and may originate from less regulated and remote areas around the world.
Methods used to attack information systems change frequently (with generally increasing sophistication), often are not recognized until launched against a target, may be supported by foreign governments, criminal organizations, or other well-financed entities, and may originate from less regulated and remote areas around the world.
If, as a result of complying with the new rules, we are unable to attract and retain qualified employees, or do so at rates necessary to maintain our competitive position, or if the compensation costs required to attract and retain employees become more significant, our performance, including our competitive position, could be materially adversely affected.
If, as a result of complying with these rules, we are unable to attract and retain qualified employees, or do so at rates necessary to maintain our competitive position, or if the compensation costs required to attract and retain employees become more significant, our performance, including our competitive position, could be materially adversely affected.
Unlike larger banks that are more geographically diversified, we provide banking and financial services to clients primarily in these market areas. As of December 31, 2023, a significant portion of our commercial real estate, real estate construction and residential real estate loans were made to borrowers in our market area.
Unlike larger banks that are more geographically diversified, we provide banking and financial services to clients primarily in these market areas. As of December 31, 2024, a significant portion of our commercial real estate, real estate construction and residential real estate loans were made to borrowers in our market area.
Further, we acquire businesses with the expectation that these mergers will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technology, cost savings and operating efficiencies.
Further, we acquire businesses with the expectation that these mergers or acquisitions will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technology, cost savings and operating efficiencies.
Our practice, in the majority of instances, is to secure the personal guaranty of individuals in support of our real estate construction and land development loans which provides us with an additional source of repayment. As of December 31, 2023, we did not have any nonperforming construction and land development loans.
Our practice, in the majority of instances, is to secure the personal guaranty of individuals in support of our real estate construction and land development loans which provides us with an additional source of repayment. As of December 31, 2024, we did not have any nonperforming construction and land development loans.
We record a derivative asset as of December 31, 2023, which mostly reflects our estimate of the fair value of the interest reimbursement due to us from the third-party loan servicer that manages an unsecured consumer loan portfolio with promotional features for us.
We record a derivative asset as of December 31, 2024, which mostly reflects our estimate of the fair value of the interest reimbursement due to us from the third-party loan servicer that manages an unsecured consumer loan portfolio with promotional features for us.
Further issuances of our common stock could be dilutive to holders of our common stock. We currently intend to pay dividends on our common stock; however, our future ability to pay dividends is subject to restrictions. We declared the first cash dividend on our common stock in February 2012, and each quarter thereafter through 2023.
Further issuances of our common stock could be dilutive to holders of our common stock. We currently intend to pay dividends on our common stock; however, our future ability to pay dividends is subject to restrictions. We declared the first cash dividend on our common stock in February 2012, and each quarter thereafter through 2024.
Replacing these third-party vendors could also create significant delay and expense. Accordingly, use of such third parties creates an unavoidable inherent risk to our business operations. We face significant cyber and data security risk that could result in the disclosure of confidential information, adversely affect our business or reputation and expose us to significant liabilities.
Replacing these third-party vendors could also create significant delay and expense. Accordingly, use of such third parties creates an unavoidable inherent risk to our business operations. We face significant cyber and data security risk that could result in the disclosure of sensitive, confidential and/or nonpublic personal information, adversely affect our business or reputation and expose us to significant liabilities.
The U.S. government's decisions regarding its debt ceiling and the possibility that the U.S. could default on its debt obligations may cause further interest rate increases, disrupt access to capital markets, and deepen recessionary conditions.
The U.S. government's decisions regarding its debt ceiling and the possibility that the U.S. could default on its debt obligations may cause further interest rate adjustments, disrupt access to capital markets, and deepen recessionary conditions.
Further, the disruption following these types of events have and could in the future generate significant market trading volatility among publicly traded bank holdings companies and, in particular, regional banks like the Company.
Further, the disruption following these types of events have and could in the future generate significant market trading volatility among publicly traded bank holdings companies and, in particular, regional banks like us.
Financial or operational difficulties of a third-party vendor could also hurt our operations if those difficulties interfere with the vendor’s ability to serve us. Furthermore, our vendors could also be sources of operational and information security risk to us, including from breakdowns or failures of their own systems or capacity constraints.
Financial or operational difficulties of a third- 32 Table of Contents party vendor could also hurt our operations if those difficulties interfere with the vendor’s ability to serve us. Furthermore, our vendors could also be sources of operational and information security risk to us, including from breakdowns or failures of their own systems or capacity constraints.
These factors could include, among others, 33 Table of Contents events such as liquidity constraints or failures, the ability to perform our obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.
These factors could include, among others, events such as liquidity constraints or failures, the ability to perform our obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.
While our management team continually monitors market conditions and economic factors, throughout our footprint, we are unable to predict the duration or severity of such 26 Table of Contents conditions or factors.
While our management team continually monitors market conditions and economic factors, throughout our footprint, we are unable to predict the duration or severity of such 27 Table of Contents conditions or factors.
We may compete with other financial services companies for acquisition opportunities, and many of these competitors have greater financial resources than we do and may be able to pay more for an acquisition than we are able or willing to pay. ​ We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated.
We may compete with other financial services companies for acquisition opportunities, and many of these competitors have greater financial resources than we do and may be able to pay more for an acquisition than we are able or willing to pay. ​ 30 Table of Contents We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated.
The carrying value of goodwill and other intangible assets may be adversely affected. When the Company completes an acquisition, goodwill and other intangible assets are often recorded on the date of acquisition as an asset. Current accounting guidance requires goodwill to be tested for impairment, and we perform such impairment analysis at least annually.
The carrying value of goodwill and other intangible assets may be adversely affected. When we complete an acquisition, goodwill and other intangible assets are often recorded on the date of acquisition as an asset. Current accounting guidance requires goodwill to be tested for impairment, and we perform such impairment analysis at least annually.
The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company’s ability to serve as a source of strength to its banking subsidiaries. Our principal source of funds to pay dividends on our common stock is cash dividends that we receive from the Bank.
The policy provides 36 Table of Contents that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company’s ability to serve as a source of strength to its banking subsidiaries. Our principal source of funds to pay dividends on our common stock is cash dividends that we receive from the Bank.
Included in this portfolio is $199.3 million of loans sourced based on our credit underwriting criteria and managed by a third party. Consumer loan repayment is primarily driven by the borrower’s personal income which is impacted by various factors that are outside of the control of the borrower including macroeconomic conditions such as inflation and interest rates.
Included in this portfolio is $38.9 million of loans sourced based on our credit underwriting criteria and managed by a third party. Consumer loan repayment is primarily driven by the borrower’s personal income which is impacted by various factors that are outside of the control of the borrower including macroeconomic conditions such as inflation and interest rates.
Further, it could cause our investors to lose confidence in the financial information we report, which could affect the trading price of our common stock. Management regularly reviews and updates our disclosure controls and procedures, including our internal control over financial reporting.
Further, it could cause our investors to lose confidence in the financial information we report, which could affect the trading price of our common stock. 38 Table of Contents Management regularly reviews and updates our disclosure controls and procedures, including our internal control over financial reporting.
As a result, we may be unable to address these methods in advance of attacks, including by implementing adequate preventive measures. If such an attack or breach does occur, we might not be able to fix it timely or adequately.
As a result, we may be unable to prevent these methods in advance of attacks, including by implementing adequate preventive measures. If such an attack does occur, we might not be able to fix it timely or adequately.
Unresolved Staff Comments Primis Financial Corp. does not have any unresolved staff comments from the SEC to report for the year ended December 31, 2023. ​
Unresolved Staff Comments Primis Financial Corp. does not have any unresolved staff comments from the SEC to report for the year ended December 31, 2024.
Preferred shares and debt, if issued, have a preference on liquidating distributions or a preference on dividend or interest payments that could limit our ability to make a distribution to the 34 Table of Contents holders of our common stock.
Preferred shares and debt, if issued, have a preference on liquidating distributions or a preference on dividend or interest payments that could limit our ability to make a distribution to the holders of our common stock.
Nonetheless, there remains the risk that we may be materially harmed by cyber-attacks and information security breaches in the future.
Nonetheless, there remains the risk that we may be materially harmed by cyber-attacks and information security incidents in the future.
Real estate lending (including commercial, construction, land development, and residential loans) is a large portion of our loan portfolio, constituting $2.0 billion, or approximately 62.2% of our total loan portfolio, as of December 31, 2023. Although residential and commercial real estate values are currently strong in our market area, such values may not remain elevated.
Real estate lending (including commercial, construction, land development, and residential loans) is a large portion of our loan portfolio, constituting $2.0 billion, or approximately 69.3% of our total loan portfolio, as of December 31, 2024. Although residential and commercial real estate values are currently strong in our market area, such values may not remain elevated.
The Company’s lending customers may also experience fraud in their businesses which could adversely affect their ability to repay their loans or make use of services.
Our lending customers may also experience fraud in their businesses which could adversely affect their ability to repay their loans or make use of services.
As of December 31, 2023, the amount of deferred interest on these loans was $12.2 million. Through an agreement with the third-party servicer, we are entitled to payment of all accrued interest that is waived on loans that repay all principal within the promotional period.
As of December 31, 2024, the amount of deferred interest on these loans was $7.0 million. Through an agreement with the third-party servicer, we are entitled to payment of all accrued interest that is waived on loans that repay all principal within the promotional period.
Our stock price can be volatile. Stock price volatility may make it more difficult for you to resell your common stock when you want and at prices you find attractive.
Stock price volatility may make it more difficult for you to resell your common stock when you want and at prices you find attractive.
We may not be able to effectively implement new technology driven products and services 29 Table of Contents or be successful in marketing these products and services to our customers.
We may not be able to effectively implement new technology driven products and services or be successful in marketing these products and services to our customers.
The Company relies on financial and other data from new and existing customers which could turn out to be fraudulent when accepting such customers, executing their financial transactions and making and purchasing loans and other financial assets. In times of increased economic stress the Company is at increased risk of fraud losses.
We rely on financial and other data from new and existing customers which could turn out to be fraudulent when accepting such customers, executing their financial transactions and making and purchasing loans and other financial assets. In times of increased economic stress we are at increased risk of fraud losses.
Within the $199.3 million third-party originated and serviced consumer loan portfolio there is 45% of the portfolio that is in a promotional interest period as of December 31, 2023. The loans in these promotional interest periods legally accrue interest at the stated rate of the note agreement but the interest is not required to be paid during the promotional period.
Within the $152.1 million third-party originated and serviced consumer loan portfolio there is 25% of the portfolio that is in a promotional interest period as of December 31, 2024. The loans in these promotional interest periods legally accrue interest at the stated rate of the note agreement, but the interest is not required to be paid during the promotional period.
Our carrying value of goodwill and net amortizable intangibles were approximately $93.5 million and $2.0 million, respectively, at December 31, 2023. We rely on third-party vendors to provide key components of our business infrastructure.
Our carrying value of goodwill and net amortizable intangibles were approximately $93.5 million and $0.7 million, respectively, as of December 31, 2024. We rely on third-party vendors to provide key components of our business infrastructure.
This includes $606.2 million in residential 1-4 family loans and $59.7 million in home equity lines of credit. If housing prices in our market areas do not remain strong or deteriorate, we may experience an increase in nonperforming loans, provision for credit losses and charge-offs.
This includes $588.8 million in residential 1-4 family loans and $63.0 million in home equity lines of credit. If housing prices in our market areas do not remain strong or deteriorate, we may experience an increase in nonperforming loans, provision for credit losses and charge-offs.
The Company believes it has underwriting and operational controls in place to prevent or detect such fraud, but cannot provide assurance that these controls will be effective in detecting fraud or that the Company will not experience fraud losses or incur costs or other damage related to such fraud, at levels that adversely affect financial results or reputation.
We believe underwriting and operational controls are in place to prevent or detect such fraud, but we cannot provide assurance that these controls will be effective in detecting fraud or that we will not experience fraud losses or incur costs or other damage related to such fraud, at levels that adversely affect financial results or reputation.
As of December 31, 2023, we had $164.7 million of construction and land development loans, or 5.1% of our loan portfolio. Construction and land development loans are subject to risks during the construction phase that are not present in standard residential real estate and commercial real estate loans.
As of December 31, 2024, we had $101.2 million of construction and land development loans, or 3.5% of our loan portfolio. Construction and land development loans are subject to risks during the construction phase that are not present in standard residential real estate and commercial real estate loans.
Under FRB rules, if the Bank ceases to be a well-capitalized institution for bank regulatory purposes, the interest rates that it pays on deposits and its ability to accept, renew or rollover brokered deposits may be restricted. As of December 31, 2023, we had $75.0 million of brokered certificates of deposits.
Under FRB rules, if the Bank ceases to be a well-capitalized institution for bank regulatory purposes, the interest rates that it pays on deposits and its ability to accept, renew or rollover brokered deposits may be restricted. As of December 31, 2024, we did not have any brokered certificates of deposits.
As of December 31, 2023, the Bank’s leverage, CET1 risk-based capital, Tier 1 risk-based capital and Total risk-based capital ratios were 9.80%, 10.88%, 10.88% and 12.12%, respectively. Many factors affect the calculation of Primis and the Bank’s risk-based assets and its ability to maintain the level of capital required to achieve acceptable capital ratios.
As of December 31, 2024, the Bank’s leverage, CET1 risk-based capital, Tier 1 risk-based capital and Total risk-based capital ratios were 9.10%, 10.78%, 10.78% and 12.04%, respectively. 37 Table of Contents Many factors affect the calculation of Primis and the Bank’s risk-based assets and its ability to maintain the level of capital required to achieve acceptable capital ratios.
These cyber risks include greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk of unauthorized dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.
These cybersecurity risks, and all those described above, include the potential for increased risk of (i) phishing, malware, and other cybersecurity attacks, (ii) vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations,(iii) unauthorized dissemination, misuse or destruction of sensitive or confidential information, (iv) our ability to restore the systems in the event of a systems failure or interruption, and (v) impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.
If our assumptions prove to be incorrect or if we experience significant loan losses, our current allowance may not be sufficient to cover actual loan losses and adjustments may be necessary to allow for different economic conditions or adverse developments in our loan portfolio. A material addition to the allowance for credit losses could cause our earnings to decrease.
If our assumptions prove to be incorrect or if we experience significant loan losses, our current allowance may not be sufficient to cover actual loan losses and adjustments may be necessary to allow for different economic conditions or adverse developments in our loan portfolio.
In addition, if the population or income growth in these market areas slows, stops or declines, income levels, deposits and housing starts could be adversely affected and could result in the curtailment of our expansion, growth and profitability. Political conditions could also impact our earnings.
In addition, if the population or income growth in these market areas slows, stops or declines, income levels, deposits and housing starts could be adversely affected and could result in the curtailment of our expansion, growth and profitability. Political conditions, including a change in presidential administrations and related policies, executive orders, and laws, could also impact our earnings.
If a high percentage of these loans repay at the end of their promotional period a large amount of interest reimbursement will be due in a short period of time from the third-party servicer and if they cannot perform then we may not be able to realize any income on a significant amount of loans in our portfolio, which may adversely impact the realization of the fair value of the derivative asset recognized. 23 Table of Contents ​ A significant amount of our loans are secured by real estate and any declines in real estate values in our primary markets could be detrimental to our financial condition and results of operations.
If a high percentage of these loans repay at the end of their promotional period a large amount of interest reimbursement will be due in a short period of time from the third-party servicer and if they cannot perform then we may 24 Table of Contents not be able to realize any income on a significant amount of loans in our portfolio, which may adversely impact the realization of the fair value of the derivative asset recognized.
The occurrence of any cyber-attack or information security breach could result in material adverse consequences to us including damage to our reputation and the loss of customers. We also could face litigation or additional regulatory scrutiny.
The occurrence of any cyber-attack could result in material adverse consequences to us including damage to our reputation, financial loss, increased operation expenses, remediation costs, and the loss of customers. We also could face litigation or additional regulatory scrutiny.
We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan we have no recourse to collateral in which to recover any potential losses. Our consumer loan portfolio that are unsecured is $328.0 million, or approximately 10.0% of our total loan portfolio, as of December 31, 2023.
We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan we have no recourse to collateral in which to recover any potential losses. Our unsecured consumer loan portfolio balance is $155.3 million, or approximately 5.3% of our total held for investment loan portfolio, as of December 31, 2024.
As of December 31, 2023, we had $1.17 billion of commercial real estate loans outstanding, or 36.3% of our loan portfolio, including multi-family residential loans and loans secured by farmland.
As of December 31, 2024, we had $1.09 billion of commercial real estate loans outstanding, or 37.6% of our loan portfolio, including multi-family residential loans and loans secured by farmland.
There is a large concentration of these loans originated within proximity to each other resulting in 70% of the current balance of promotional loans ending their promotional period in the second half of 2024 through the first quarter of 2025.
There is a large concentration of these loans originated within proximity to each other resulting in 86% of the current balance of promotional loans ending their promotional period during 2025.
We receive a credit enhancement from the third-party managing $199.3 million of consumer loans that are recorded on our balance sheet as of December 31, 2023. The credit enhancement is primarily provided through cash flows derived from loan originations.
We receive a credit enhancement from the third-party managing $152.1 million of consumer loans that are recorded on our balance sheet in both held for investment and held for sale as of December 31, 2024. The credit enhancement is primarily provided through cash flows derived from loan originations.
As of December 31, 2023, Primis and the Bank exceeded the amounts required to be well capitalized with respect to all four required capital ratios. As of December 31, 2023, Primis’ leverage, CET1 risk-based capital, Tier 1 risk-based capital and Total risk-based capital ratios were 8.37%, 8.96%, 9.25%, and 13.44%, respectively.
As of December 31, 2024, Primis and the Bank exceeded the amounts required to be well capitalized with respect to all four required capital ratios. As of December 31, 2024, Primis’ leverage, CET1 risk-based capital, Tier 1 risk-based capital and Total risk-based capital ratios were 7.76%, 8.74%, 9.05%, and 12.53%, respectively.
These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer. ​ ESG risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price. Our business faces increasing public scrutiny related to ESG activities.
These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer. ​ 29 Table of Contents ESG and DEI risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price.
While it is not expected that the FRB will continue to increase the target federal funds rate in 2024 to combat recent inflationary trends as it did in 2023, we are unable to predict changes in interest rates, which are affected by factors beyond our control, including inflation, deflation, recession, unemployment, money supply, and other changes in financial markets.
While it is expected that the FRB will hold the target federal funds rate steady in the first half of 2025, we are unable to predict changes in interest rates, which are affected by factors beyond our control, including inflation, deflation, recession, unemployment, money supply, and other changes in financial markets.
While we have ongoing programs to review third-party vendors and assess risk, we do not control their actions. 30 Table of Contents Any problems caused by these third parties, including those resulting from disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor, failure of a vendor to provide services for any reason or poor performance of services, could adversely affect our ability to deliver products and services to our customers and otherwise conduct our business.
Any problems caused by these third parties, including those resulting from disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and compromises at a vendor, failure of a vendor to provide services for any reason or poor performance of services, could adversely affect our ability to deliver products and services to our customers and otherwise conduct our business.
Litigation or regulatory actions in turn could lead to significant liability or other sanctions, including fines and penalties or reimbursement of customers adversely affected by security breach.
Litigation or regulatory actions in turn could lead to significant liability or other sanctions, including fines and penalties (which may not be covered by our insurance policies) or reimbursement of customers adversely affected by a security incident.
As of December 31, 2023, 36.3% of our loan portfolio was comprised of loans secured by commercial real estate, including multi-family residential loans and loans secured by farmland. As of December 31, 2023, $665.9 million, or approximately 20.7% of our total loans, were secured by single-family residential real estate.
As of December 31, 2024, 43.2% of our loan portfolio was comprised of loans secured by commercial real estate, including multi-family residential loans and loans secured by farmland. As of December 31, 2024, $651.8 million, or approximately 22.6% of our total loans, were secured by single-family residential real estate.
To the extent that such an attack or breach relates to products or services provided by others, we seek to engage in due diligence and monitoring to limit the 31 Table of Contents risk.
We seek to engage in due diligence and monitoring to limit the risk that such an attack relates to products or services provided by others, including third party service providers and vendors..
We may be required to record impairment charges in our income statements through an allowance for credit losses if our investment securities suffer a decline in value below their amortized cost. During the years ended December 31, 2023, 2022 and 2021, we incurred an insignificant amount of impairment charges related to credit losses on our investment securities.
We may be required to record impairment charges in our income statements through an allowance for credit losses if our investment securities suffer a decline in value below their amortized cost.
Failure to successfully manage these risks in the development and implementation of new lines of business, new products or services and/or new technologies could have a material adverse effect on our business, financial condition and results of operations. We may not be able to successfully integrate our acquisitions or to realize the anticipated benefits of them.
Failure to successfully manage these risks in the development and implementation of new lines of business, new products or services and/or new technologies could have a material adverse effect on our business, financial condition and results of operations. The development and use of artificial intelligence (AI) presents risks and challenges that may adversely impact our business.
As further described above under Supervision and Regulation—Capital Requirements, Primis and the Bank each are subject to various regulatory capital requirements administered by the FRB. 35 Table of Contents Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional, discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s and our consolidated financial statements.
Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional, discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s and our consolidated financial statements.
Management also identified a material weakness in its internal controls over financial reporting related to (ii) above during the year ended December 31, 2022. Management is currently remediating the material weaknesses including design of and testing new controls related to the accounting and disclosure for these items.
Management also identified a material weakness in its internal controls over financial reporting related to (ii) above during the year ended December 31, 2022.
In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.
In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs. 33 Table of Contents Our business is susceptible to fraud. ​ Our business exposes us to fraud risk from loan and deposit customers, the parties we do business with, as well as from employees, contractors and vendors.
At December 31, 2023, our nonperforming assets (which consist of nonaccrual loans, loans past due 90 days and accruing and OREO) totaled $10.8 million, or 0.34% of total loans and OREO, which is a decrease of $28.0 million, or 72.2%, compared with nonperforming assets of $38.8 million, or 1.32% of total non-covered loans and OREO at December 31, 2022.
As of December 31, 2024, our nonperforming assets (which consist of nonaccrual loans, loans past due 90 days and accruing and OREO) totaled $16.7 million, or 0.58% of total loans and OREO, which is an increase of $5.9 million, or 54.9%, compared with nonperforming assets of $10.8 million, or 0.34% of total non-covered loans and OREO as of December 31, 2023.
Due to the relatively unseasoned nature of portions of our loan portfolio, we may experience an increase in delinquencies and losses as these loans continue to mature. 24 Table of Contents In addition, federal regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further charge-offs, based on judgments different than those of our management.
In addition, federal regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further charge-offs, based on judgments different than those of our management.
While we have not experienced any material losses relating to cyber-attacks or other information security breaches, we have been subject to hacking and cyber-attack and there can be no assurance that we will not suffer additional losses in the future.
While we have not experienced any material losses relating to cyber-attacks or other information security incidents, we have been subject to cyber-attacks and there can be no assurance that we will not suffer additional losses in the future. We allow a portion of our employees to work remotely from their homes on a full-time or hybrid schedule.
As a regulated entity, Primis and the Bank must maintain certain required levels of regulatory capital that may limit our operations and potential growth.
As a regulated entity, Primis and the Bank must maintain certain required levels of regulatory capital that may limit our operations and potential growth. As further described above under Supervision and Regulation—Capital Requirements, Primis and the Bank each are subject to various regulatory capital requirements administered by the FRB.
Actual results that differ significantly from our prior assumptions may result in an inability to realize the value of the derivative and require updates to future fair value calculations of the derivative which could result in a significant increase or decrease in the derivative value that is recorded in our results of operations, which could have a material adverse effect on our financial condition and results of operations in future periods.
Actual results that differ significantly from our prior assumptions may result in an inability to realize the value of the derivative and require updates to future fair value calculations of the derivative which could result in a significant increase or decrease in the derivative value that is recorded in our results of operations, which could have a material adverse effect on our financial condition and results of operations in future periods. 28 Table of Contents We may be unable to sell loans at the estimated market price utilized to record them in held for sale We have $113.2 million of Consumer Program loans in held for sale at the lower of cost or market as of December 31, 2024 that were recorded at their estimated fair value.
In some cases, we may be required to apply a new or revised standard retrospectively, resulting in us revising prior-period financial statements. 36 Table of Contents ​ Financial Reporting Risks Failure to maintain an effective system of disclosure controls and procedures could have a material adverse effect on our business, results of operations and financial condition and could impact the price of our common stock.
Financial Reporting Risks Failure to maintain an effective system of disclosure controls and procedures could have a material adverse effect on our business, results of operations and financial condition and could impact the price of our common stock.
As a financial institution, we are under threat of loss due to hacking and cyber-attacks. This risk has increased in recent years, and continues to increase, as we continue to expand customer capabilities to utilize internet and other remote channels to transact business.
This risk has increased in recent years, and continues to increase, as we continue to expand customer capabilities to utilize internet and other remote channels to transact business. Two of the most significant cyber-attack risks that we face are e-fraud and compromise of sensitive customer data.
These changes may be difficult to predict and could impact how we prepare and report our financial statements.
These changes may be difficult to predict and could impact how we prepare and report our financial statements. In some cases, we may be required to apply a new or revised standard retrospectively, resulting in us revising prior-period financial statements.
The attempts to breach sensitive customer data, such as account numbers and social security numbers, are less frequent but would present significant reputational, legal and/or regulatory costs to us if successful.
E-fraud occurs when cybercriminals compromise our systems and networks, or those of our service providers and vendors, and extract funds directly from customer or our accounts. The attempts to compromise sensitive customer data, such as account numbers and Social Security numbers, present potentially significant reputational, legal and/or regulatory costs to us.
If lending slows or stops it would cause monthly cash receipts related to this credit enhancement to decline, which may adversely affect our financial condition and results of operations.
We made the decision as of December 31, 2024 to discontinue originations of these loans on January 31, 2025. This decision will cause monthly cash receipts related to this credit enhancement to end at that point, which may adversely affect our financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s interim CIO has worked in the financial services industry for over 20 years and held similar roles at other financial institutions including four years as a Chief Information Officer and five years as a Chief Technology Officer. ​ 37 Table of Contents The Bank’s cybersecurity program, including our information security policies, is designed to align with regulatory guidance and industry practices.
Biggest changeOur Chief Information Officer (“CIO”) manages our information security strategy and development as overseen by our overarching Enterprise Risk Management (“ERM”) program. ​ The Bank’s cybersecurity program, including our information security policies, is designed to align with regulatory guidance and industry practices.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy ​ The Bank’s information security program is designed to protect sensitive information from unauthorized access, use, disclosure, alteration, or destruction, and to maintain the confidentiality, integrity, and availability of our information assets, including employee and customer non-public information, financial data, and internal operational information.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy ​ The Bank’s information security program is designed to protect sensitive, confidential, and non-public personal information from unauthorized access, use, disclosure, alteration, or destruction, and to maintain the confidentiality, integrity, and availability of our information assets, including employee and customer non-public personal information, financial data, and internal operational information.
The Network Team also actively monitors company networks and systems to detect suspicious or malicious events, and contracts with third-party consultants to perform penetration testing and routine vulnerability scans.
The Network Team also actively monitors the Bank’s networks and systems to detect suspicious or malicious events, and contracts with third-party consultants to perform penetration testing and routine vulnerability scans.
A managed security service provider supplements our efforts to provide 24 hours a day, seven days a week coverage. ​ We maintain policies and procedures for the safe storage, handling, and secure disposal of customer information.
A third-party managed security service provider supplements our efforts to provide 24 hours a day, seven days a week coverage. ​ We maintain policies and procedures for the safe storage, handling, and secure disposal of customer and employee information.
Risk Factors – Operational Risks” of this report for additional information. ​ Cybersecurity Governance ​ Our Board of Directors is responsible for overseeing the Bank’s business and affairs, including risks associated with cybersecurity threats. The ERM Committee (“ERMC”) of the Board has primary responsibility for overseeing the Bank’s comprehensive ERM program, including its cybersecurity program.
Risk Factors – Operational Risks” in this 10-K for additional information. ​ Cybersecurity Governance ​ Our Board of Directors is responsible for overseeing the Bank’s business and affairs, including risks associated with cybersecurity threats. The ERM Committee (“ERMC”) of the Board has primary responsibility for overseeing the Bank’s comprehensive ERM program, including its cybersecurity program.
The Incident Response Plan outlines action steps for investigating, containing, and remediating a cybersecurity incident, and includes procedures for escalation and reporting of potentially significant cybersecurity incidents to the Bank’s Senior Leadership Team, including the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Risk Officer (“CRO”), and the Board of Directors.
The Incident Response Plan outlines action steps for investigating, containing, and remediating a cybersecurity incident, and includes procedures for escalation and reporting of potentially significant cybersecurity incidents to the Bank’s Executive Management, including the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Risk Officer (“CRO”), and the Board of Directors.
The ERM program assists senior leadership team in 38 Table of Contents identifying, assessing, monitoring, and managing risk, including cybersecurity risk, in a rapidly changing environment. Cybersecurity matters and assessments are regularly included in both Audit Committee (“AC”) and ERMC meetings. ​ The Board’s oversight of cybersecurity risk is supported by our CIO.
The ERM program assists the Executive Management in identifying, assessing, monitoring, and managing risk, including cybersecurity risk, in a rapidly changing environment. Cybersecurity matters and assessments are regularly included in both Audit Committee (“AC”) and ERMC meetings. ​ The Board’s oversight of cybersecurity risk is supported by our CIO.
The CIO attends ERMC meetings and provides cybersecurity updates to these Board committees on a quarterly basis. Our CRO, in conjunction with our CIO, facilitates the involvement of the ERMC in oversight of potentially significant cybersecurity incidents.
The CIO attends ERMC meetings and provides cybersecurity updates to these Board committees on a quarterly basis. Our CRO, in conjunction with our CIO, facilitates the involvement of the ERMC in oversight of potentially significant cybersecurity incidents. ​ The Bank’s CIO directs the Bank’s information security program and our information technology risk management.
Third-party service providers are required to comply with the Bank’s policies regarding non-public personal information and information security. Third parties processing non-public personal information are contractually required to meet all legal and regulatory obligations to protect customer data against security threats or unauthorized access.
Risk assessments are performed using Service Organization Controls (SOC) reports, self-attestation questionnaires, and other tools. Third-party service providers are required to comply with the Bank’s policies regarding non-public personal information and information security. Third parties processing non-public personal information are contractually required to meet legal and regulatory obligations to protect customer data against security threats or unauthorized access.
As necessary, the Company may retain a third-party firm to assist with forensic investigation and management of cybersecurity incidents . ​ The Bank conducts due diligence prior to engaging third-party service providers which have access to the Bank’s networks, systems, and/or customer or employee data. Risk assessments are performed using Service Organization Controls (SOC) reports, self-attestation questionnaires, and other tools.
We regularly test the Incident Response Plan, including through tabletop exercises, and document lessons learned. As necessary, the Company may retain a third-party firm to assist with forensic investigation and management of cybersecurity incidents . ​ The Bank conducts due diligence prior to engaging third-party service providers which have access to the Bank’s networks, systems, and/or customer or employee data.
We test employees monthly to determine their susceptibility to phishing test emails, and we require susceptible employees to take additional training and provide regular reports to management. ​ As part of our information security program, we have adopted a Cyber Incident Response Plan (“Incident Response Plan”) which is administered by our CIO who closely coordinates with the Bank’s Information Technology team.
We employ a number of technical controls to mitigate the risk of phishing emails targeting employees. ​ 39 Table of Contents As part of our information security program, we have adopted a Cyber Incident Response Plan (“Incident Response Plan”) which is administered by our CIO who closely coordinates with the Bank’s Information Technology team.
Led by our CIO, the Network Team examines risks to the Bank’s information systems and assets, designs and implements security solutions, monitors the environment, and provides responses to threats. Our CRO has over three decades of experience in risk management, and our Network Team collectively has over 19 years of experience in cybersecurity operations. ​
Led by our CIO, the Network Team examines risks to the Bank’s information systems and assets, designs and implements security solutions, monitors the environment, and provides responses to threats. Our CIO has worked in the financial services industry for over 20 years and held similar roles at other financial institutions including four years as a Chief Information Officer.
Despite our efforts, there can be no assurance that our cybersecurity risk management processes and measures described will be fully implemented, complied with or effective in protecting our systems and information. We face risks from certain cybersecurity threats that, if realized, are reasonably likely to materially affect our business strategy, result of operations or financial condition. See “Item 1A.
Despite our ongoing efforts to continually strengthen our cybersecurity program, there can be no assurance that our cybersecurity risk management processes and measures described will be fully implemented, complied with, or effective in safeguarding our systems and information.
Removed
Our Chief Information Officer (“CIO”) manages our information security strategy and development as overseen by our overarching Enterprise Risk Management (“ERM”) program. On January 16, 2024, G. Cody Sheflett, Jr., CIO of the Company, passed away. The Company has actively engaged a recruiting firm to fill the CIO vacancy, but has not formally appointed a new CIO.
Added
After contract execution, Primis conducts ongoing monitor of third-party service providers/vendors on a risk-based approach. ​ We continue to optimize our business continuity and disaster recovery plans aligned to the pervasive nature of cybersecurity incidents and threats. We also increased our cyber insurance which aligned to strengthen our internal systems.
Removed
During such vacancy, the Company has appointed an interim CIO and unless otherwise noted, references to the CIO and his duties refer to Mr. Sheflett’s historical role and the interim CIO’s role, and the duties and obligations the Company anticipates the next CIO to abide by.
Added
While the Bank has encountered, and will continue to encounter, cyber incidents in the normal course of business, to date, the Bank has not experienced a cybersecurity incident that has materially impacted our business strategy, financial condition, or results of operation.
Removed
The Company employs a number of technical controls to mitigate the risk of phishing emails targeting employees.
Added
We face risks from certain cybersecurity threats that, if realized, could reasonably be expected to materially affect our business strategy, financial condition, or results of operation. See “Item 1A.
Removed
After contract execution, Primis requires critical and high-risk providers to have an ongoing monitoring plan. ​ While we do not believe that our business strategy, results of operations or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive, and cybersecurity risk has increased in recent years.
Added
Our CRO has over three decades of experience in risk management, and our Network Team collectively has over 19 years of experience in cybersecurity operations. ​ 40 Table of Contents
Removed
The Executive Vice President and Chief Financial Officer and the Network Manager have been attending the ERMC meetings in the CIO’s absence. ​ The Bank’s CIO directs the Bank’s information security program and our information technology risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIncluding these main locations, our bank owns 30 properties and leases 24 properties, all of which are used as branch locations or for housing operational units in Maryland and Virginia. As of December 31, 2023, Primis Bank had twenty-four full-service branches in Virginia and Maryland and also provided services to customers through certain online and mobile applications.
Biggest changeIncluding these main locations, we own 32 properties and leases 20 properties, all of which are used as branch locations or for housing operational units in Maryland and Virginia. As of December 31, 2024, Primis Bank had twenty-four full-service branches in Virginia and Maryland and also provided services to customers through certain online and mobile applications.
Item 2. Properties Primis Financial Corp.’s principal office is located at 1676 International Drive, McLean, Virginia. The Company has an administrative office in Glen Allen, Virginia and an operations center in Atlee, Virginia.
Item 2. Properties Primis Financial Corp.’s principal office is located at 1676 International Drive, McLean, Virginia. We have an administrative office in Glen Allen, Virginia and an operations center in Atlee, Virginia.
Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland. ​ Primis believes its facilities are in good operating condition, are suitable and adequate for its operational needs and are adequately insured.
Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland. ​ We believe our facilities are in good operating condition, are suitable and adequate for our operational needs and are adequately insured.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThere are no proceedings pending, or to management’s knowledge, threatened, that represent a significant risk against Primis or Primis Bank as of December 31, 2023. Item 4. Mine Safety Disclosures. Not applicable. PART II
Biggest changeThere are no proceedings pending, or to management’s knowledge, threatened, that represent a significant risk against Primis or Primis Bank as of December 31, 2024. Item 4. Mine Safety Disclosures. Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information as of December 31, 2023 regarding Primis’ equity compensation plans under which our equity securities are authorized for issuance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ remaining available for ​ ​ ​ ​ ​ ​ ​ future issuance under ​ ​ Number of securities ​ Weighted average ​ equity compensation plans ​ ​ to be issued upon exercise ​ exercise price of ​ (excluding securities reflected ​ ​ of outstanding options ​ ​ outstanding options ​ in column A) Plan category A B C Equity compensation plans approved by security holders 54,800 ​ $ 11.49 370,582 Equity compensation plans not approved by security holders — ​ — — Total 54,800 ​ $ 11.49 370,582 ​ Issuer Purchases of Equity Securities None.
Biggest changeThe following table provides information as of December 31, 2024 regarding Primis’ equity compensation plans under which our equity securities are authorized for issuance: ​ 41 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ remaining available for ​ ​ ​ ​ ​ ​ ​ future issuance under ​ ​ Number of securities ​ Weighted average ​ equity compensation plans ​ ​ to be issued upon exercise ​ exercise price of ​ (excluding securities reflected ​ ​ of outstanding options ​ ​ outstanding options ​ in column A) Plan category A B C Equity compensation plans approved by security holders 35,800 ​ $ 11.73 380,916 Equity compensation plans not approved by security holders — ​ — — Total 35,800 ​ $ 11.73 380,916 ​ Issuer Purchases of Equity Securities On December 19, 2024, the Board of Directors of the Company authorized a stock repurchase program (the “Stock Repurchase Program”) under which the Company may repurchase up to 740,600 shares of its common stock.
Performance Graph The following chart compares the cumulative total shareholder return on Primis common stock during the five years ended December 31, 2023, with the cumulative total return of the Russell 2000 Index and the NASDAQ Bank Index for the same period. Dividend reinvestment has been assumed.
Performance Graph The following chart compares the cumulative total shareholder return on Primis common stock during the five years ended December 31, 2024, with the cumulative total return of the Russell 2000 Index and the NASDAQ Bank Index for the same period. Dividend reinvestment has been assumed.
Securities Authorized for Issuance under Equity Compensation Plans As of December 31, 2023, Primis had outstanding stock options granted under the 2010 Stock Awards and Incentive Plan (the “2010 Plan”) and the 2017 Equity Compensation Plan (the “2017 Plan”), which were approved by its shareholders.
Securities Authorized for Issuance under Equity Compensation Plans As of December 31, 2024, Primis had outstanding stock options granted under the 2010 Stock Awards and Incentive Plan (the “2010 Plan”) and the 2017 Equity Compensation Plan (the “2017 Plan”), which were approved by its shareholders.
This comparison assumes $100 invested on December 31, 40 Table of Contents 2018 in Primis common stock, the Russell 2000 Index and the NASDAQ Bank Index.
This comparison assumes $100 invested on December 31, 42 Table of Contents 2019 in Primis common stock, the Russell 2000 Index and the NASDAQ Bank Index.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Market Prices Primis’ common stock is traded on the Nasdaq Global Market under the symbol “FRST”. There were 24,708,234 shares of our common stock outstanding at the close of business on September 16, 2024, which were held by 1,133 shareholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Market Prices Primis’ common stock is traded on the Nasdaq Global Market under the symbol “FRST”. There were 24,722,734 shares of our common stock outstanding at the close of business on April 15, 2025, which were held by 1,099 shareholders of record.
As of that date, the closing price of our common stock on the NASDAQ Global Market was $10.48. 39 Table of Contents Recent Sales of Unregistered Securities None.
As of that date, the closing price of our common stock on the NASDAQ Global Market was $8.24. Recent Sales of Unregistered Securities None.
Dividends We declared the first cash dividend on our common stock in February 2012, and each quarter thereafter through 2023. There are a number of restrictions on our ability to pay dividends.
There were no repurchases made during 2024 under the Stock Repurchase Program or previous stock repurchase programs. ​ Dividends We declared the first cash dividend on our common stock in February 2012, and each quarter thereafter through 2024. There are a number of restrictions on our ability to pay dividends.
The historical stock price performance for Primis common stock shown on the graph below is not necessarily indicative of future stock performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2018 2019 2020 2021 2022 2023 Primis Financial Corp. 100.00 ​ 126.62 ​ 97.34 ​ 124.24 ​ 100.81 ​ 112.45 Russell 2000 Index 100.00 ​ 125.52 ​ 150.58 ​ 172.90 ​ 137.56 ​ 160.85 NASDAQ Bank Index 100.00 ​ 121.23 ​ 108.34 ​ 151.34 ​ 123.55 ​ 115.31 ​ ​ ​ Item 6. [Reserved] ​ ​ 41 Table of Contents
The historical stock price performance for Primis common stock shown on the graph below is not necessarily indicative of future stock performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 2020 2021 2022 2023 2024 Primis Financial Corp. 100.00 ​ 76.87 ​ 98.12 ​ 79.61 ​ 88.81 ​ 84.65 Russell 2000 Index 100.00 ​ 119.96 ​ 137.74 ​ 109.59 ​ 128.14 ​ 142.93 NASDAQ Bank Index 100.00 ​ 89.37 ​ 124.84 ​ 101.92 ​ 95.12 ​ 111.03 ​ ​ ​ Item 6. [Reserved] ​ ​ 43 Table of Contents
Added
The Stock Repurchase Program began on December 19, 2024, near the end of the previously authorized repurchase plan, and will end on December 19, 2025. Repurchases under the Stock Repurchase Program may be made from time to time through open market purchases, privately negotiated transactions or such other manners as will comply with applicable laws and regulations.
Added
The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities.
Added
The Stock Repurchase Program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to the exact number of shares that will be repurchased by the Company. The Stock Repurchase Program may be suspended, modified or terminated by the Company at any time and for any reason, without prior notice.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese loans are diversified geographically and are spread across the nation. 51 Table of Contents The composition of our loans held for investment portfolio consisted of the following at December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ ​ Amount Percent Amount Percent Loans secured by real estate: ​ ​ Commercial real estate - owner occupied ​ $ 455,397 14.1 % $ 459,866 15.6 % Commercial real estate - non-owner occupied ​ 578,600 18.0 % 579,733 19.7 % Secured by farmland ​ 5,044 0.2 % 5,970 0.2 % Construction and land development ​ 164,742 5.1 % 148,690 5.0 % Residential 1-4 family ​ 606,226 18.8 % 609,694 20.7 % Multi- family residential ​ 127,857 4.0 % 140,321 4.8 % Home equity lines of credit ​ 59,670 1.9 % 65,152 2.2 % Total real estate loans ​ 1,997,536 62.0 % 2,009,426 68.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ 602,623 18.7 % 520,741 17.7 % Paycheck protection program loans ​ ​ 2,023 ​ 0.1 % ​ 4,564 ​ 0.2 % Consumer loans ​ 611,583 19.0 % 405,278 13.8 % Total Non-PCD loans ​ 3,213,765 99.8 % 2,940,009 99.8 % PCD loans ​ ​ 5,649 ​ 0.2 % ​ 6,628 ​ 0.2 % Total loans ​ $ 3,219,414 ​ 100.0 % $ 2,946,637 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ The following table sets forth the contractual maturity ranges of our loan portfolio and the amount of those loans with fixed and floating interest rates in each maturity range as of December 31, 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After 1 Year ​ After 5 Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Through 5 Years ​ Through 15 Years ​ After 15 Years ​ ​ ​ ​ One Year ​ Fixed ​ Floating ​ Fixed ​ Floating ​ Fixed ​ Floating ​ ​ ​ or Less Rate Rate Rate Rate Rate Rate Total Loans secured by real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - owner occupied ​ $ 26,048 ​ $ 108,268 ​ $ 26,771 ​ $ 119,065 ​ $ 112,586 ​ $ 2,271 ​ $ 60,388 ​ $ 455,397 Commercial real estate - non-owner occupied ​ ​ 35,094 ​ ​ 206,689 ​ ​ 39,687 ​ ​ 51,404 ​ ​ 66,762 ​ ​ 11,127 ​ ​ 167,837 ​ ​ 578,600 Secured by farmland ​ ​ 1,718 ​ ​ 807 ​ ​ 158 ​ ​ 226 ​ ​ 828 ​ ​ 481 ​ ​ 826 ​ ​ 5,044 Construction and land development ​ ​ 116,510 ​ ​ 19,907 ​ ​ 16,140 ​ ​ 48 ​ ​ 6,486 ​ ​ 673 ​ ​ 4,978 ​ ​ 164,742 Residential 1-4 family ​ ​ 18,655 ​ ​ 45,233 ​ ​ 8,756 ​ ​ 26,771 ​ ​ 53,331 ​ ​ 71,034 ​ ​ 382,446 ​ ​ 606,226 Multi- family residential ​ ​ 7,738 ​ ​ 68,788 ​ ​ 6,489 ​ ​ — ​ ​ 18,277 ​ ​ — ​ ​ 26,565 ​ ​ 127,857 Home equity lines of credit ​ ​ 4,792 ​ ​ 3,270 ​ ​ 9,643 ​ ​ 48 ​ ​ 2,321 ​ ​ 12 ​ ​ 39,584 ​ ​ 59,670 Total real estate loans ​ ​ 210,555 ​ ​ 452,962 ​ ​ 107,644 ​ ​ 197,562 ​ ​ 260,591 ​ ​ 85,598 ​ ​ 682,624 ​ ​ 1,997,536 Commercial loans ​ ​ 87,640 ​ 140,719 ​ ​ 111,367 ​ ​ 208,425 ​ ​ 50,584 ​ ​ 1,107 ​ ​ 2,781 ​ ​ 602,623 Paycheck protection program loans ​ ​ 24 ​ ​ 1,811 ​ ​ — ​ ​ 188 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,023 Consumer loans ​ ​ 2,582 ​ ​ 278,797 ​ ​ 149,554 ​ ​ 87,169 ​ ​ 91,386 ​ ​ 2,089 ​ ​ 6 ​ ​ 611,583 Total Non-PCD loans ​ ​ 300,801 ​ ​ 874,289 ​ ​ 368,565 ​ ​ 493,344 ​ ​ 402,561 ​ ​ 88,794 ​ ​ 685,411 ​ ​ 3,213,765 PCD loans ​ 2,726 ​ ​ 1,303 ​ ​ — ​ ​ — ​ ​ 1,227 ​ ​ 393 ​ ​ - ​ 5,649 Total loans ​ $ 303,527 ​ $ 875,592 ​ $ 368,565 ​ $ 493,344 ​ $ 403,788 ​ $ 89,187 ​ $ 685,411 ​ $ 3,219,414 ​ ​ 52 Table of Contents The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio as of December 31, 2023, which is only originated at fixed rates (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One Year or Less ​ After One Year to Five Years ​ After Five Through Ten Years ​ After Ten Years ​ Total Consumer Program Loans ​ $ 611 ​ $ 135,263 ​ $ 55,887 ​ $ 7,511 ​ $ 199,272 ​ The following table describes the period over which our Consumer Program loans that are currently in a no interest promotional period will exit that promotional period and begin to amortize.
Biggest changeThe majority of this growth was concentrated in loan growth in the Panacea division with loans that are diversified geographically and are spread across the nation. 53 Table of Contents The composition of our loans held for investment portfolio consisted of the following as of December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ Amount Percent Amount Percent Loans secured by real estate: ​ ​ Commercial real estate - owner occupied ​ $ 475,898 16.5 % $ 455,397 14.1 % Commercial real estate - non-owner occupied ​ 610,482 21.1 % 578,600 18.0 % Secured by farmland ​ 3,711 0.1 % 5,044 0.2 % Construction and land development ​ 101,243 3.5 % 164,742 5.1 % Residential 1-4 family ​ 588,859 20.4 % 606,226 18.8 % Multi- family residential ​ 158,426 5.4 % 127,857 4.0 % Home equity lines of credit ​ 62,954 2.2 % 59,670 1.9 % Total real estate loans ​ 2,001,573 69.2 % 1,997,536 62.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ 608,595 21.1 % 602,623 18.7 % Paycheck protection program loans ​ ​ 1,927 ​ 0.1 % ​ 2,023 ​ 0.1 % Consumer loans ​ 270,063 9.4 % 611,583 19.0 % Total Non-PCD loans ​ 2,882,158 99.8 % 3,213,765 99.8 % PCD loans ​ ​ 5,289 ​ 0.2 % ​ 5,649 ​ 0.2 % Total loans ​ $ 2,887,447 ​ 100.0 % $ 3,219,414 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ The following table sets forth the contractual maturity ranges of our loan portfolio and the amount of those loans with fixed and floating interest rates in each maturity range as of December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After 1 Year ​ After 5 Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Through 5 Years ​ Through 15 Years ​ After 15 Years ​ ​ ​ ​ One Year ​ Fixed ​ Floating ​ Fixed ​ Floating ​ Fixed ​ Floating ​ ​ ​ or Less Rate Rate Rate Rate Rate Rate Total Loans secured by real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - owner occupied ​ $ 32,917 ​ $ 81,757 ​ $ 23,087 ​ $ 152,937 ​ $ 131,855 ​ $ 1,687 ​ $ 51,658 ​ $ 475,898 Commercial real estate - non-owner occupied ​ ​ 89,229 ​ ​ 163,028 ​ ​ 34,895 ​ ​ 80,354 ​ ​ 81,319 ​ ​ 9,498 ​ ​ 152,159 ​ ​ 610,482 Secured by farmland ​ ​ 904 ​ ​ 811 ​ ​ 75 ​ ​ — ​ ​ 740 ​ ​ — ​ ​ 1,181 ​ ​ 3,711 Construction and land development ​ ​ 50,184 ​ ​ 1,910 ​ ​ 26,777 ​ ​ 6,359 ​ ​ 15,982 ​ ​ — ​ ​ 31 ​ ​ 101,243 Residential 1-4 family ​ ​ 7,106 ​ ​ 51,767 ​ ​ 17,197 ​ ​ 23,683 ​ ​ 50,297 ​ ​ 67,595 ​ ​ 371,214 ​ ​ 588,859 Multi- family residential ​ ​ 16,708 ​ ​ 89,427 ​ ​ 14,138 ​ ​ — ​ ​ 13,978 ​ ​ — ​ ​ 24,175 ​ ​ 158,426 Home equity lines of credit ​ ​ 4,508 ​ ​ 3,223 ​ ​ 6,547 ​ ​ 43 ​ ​ 2,845 ​ ​ 21 ​ ​ 45,767 ​ ​ 62,954 Total real estate loans ​ ​ 201,556 ​ ​ 391,923 ​ ​ 122,716 ​ ​ 263,376 ​ ​ 297,016 ​ ​ 78,801 ​ ​ 646,185 ​ ​ 2,001,573 Commercial loans ​ ​ 129,935 ​ 90,663 ​ ​ 84,371 ​ ​ 264,697 ​ ​ 35,243 ​ ​ 1,069 ​ ​ 2,617 ​ ​ 608,595 Paycheck protection program loans ​ ​ 884 ​ ​ 870 ​ ​ — ​ ​ 173 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,927 Consumer loans ​ ​ 4,483 ​ ​ 134,605 ​ ​ 53,651 ​ ​ 68,435 ​ ​ 6,915 ​ ​ 1,969 ​ ​ 5 ​ ​ 270,063 Total Non-PCD loans ​ ​ 336,858 ​ ​ 618,061 ​ ​ 260,738 ​ ​ 596,681 ​ ​ 339,174 ​ ​ 81,839 ​ ​ 648,807 ​ ​ 2,882,158 PCD loans ​ 1,244 ​ ​ 2,503 ​ ​ 26 ​ ​ — ​ ​ 1,130 ​ ​ 386 ​ ​ — ​ 5,289 Total loans ​ $ 338,102 ​ $ 620,564 ​ $ 260,764 ​ $ 596,681 ​ $ 340,304 ​ $ 82,225 ​ $ 648,807 ​ $ 2,887,447 ​ ​ 54 Table of Contents The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio as of December 31, 2024, which is only originated at fixed rates (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One Year or Less ​ After One Year to Five Years ​ After Five Through Ten Years ​ After Ten Years ​ Total Consumer Program Loans, held for sale, at lower of cost or market (1) ​ $ 937 ​ $ 66,738 ​ $ 41,373 ​ $ 24,115 ​ $ 133,163 Consumer Program Loans, held for investment ​ ​ 75 ​ ​ 17,537 ​ ​ 6,937 ​ ​ 14,417 ​ ​ 38,966 Total Consumer Program Loans ​ $ 1,012 ​ $ 84,275 ​ $ 48,310 ​ $ 38,532 ​ $ 172,129 (1) Amounts exclude $20.0 million of fair market value adjustments related to our transfer of the portfolio to held for sale as of December 31, 2024. ​ As of December 31, 2024, we had $38.9 million of Consumer Program loans in a promotional period where interest is being deferred and will not be recognized by us until and if they exit the promotional period and the loan begins to amortize.
Under U.S. GAAP, agreements with multiple counterparties, such as the customer and TPOS, are generally required to be accounted for separately even if the agreements are highly interrelated. As a result, we account for the Consumer Program under multiple units of account with the following impacts: ● The loans are accounted for as one unit of account under U.S.
Under U.S. GAAP, agreements with multiple counterparties, such as the customer and TPOS, are generally required to be accounted for separately even if the agreements are highly interrelated. As a result, we account for the Consumer Program as multiple units of account with the following impacts: ● The loans are accounted for as one unit of account under U.S.
In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326. The allowance is reported as a component of other liabilities in our consolidated balance sheets. Adjustments to the allowance are reported in our income statement as a component of other expenses.
In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326. The allowance is reported as a component of other liabilities in our consolidated balance sheets. Adjustments to the allowance are reported in our income statement as a component of noninterest expenses.
The loan portfolio is transferred to bankruptcy-remote special-purpose vehicle, which finances the acquisition through the issuance of various classes of debt and equity securities with varying levels of senior claim on the underlying loan portfolio. CLOs must be rated AA or better at the time of purchase. We classify our investment securities as either held-to-maturity or available-for-sale.
The loan portfolio is transferred to bankruptcy-remote special-purpose vehicle, which finances the acquisition through the issuance of various classes of debt and equity securities with varying levels of senior claim on the underlying loan portfolio. CLOs must be rated AA or better at the time of purchase. We classify our investment securities as either held-to-maturity (“HTM”) or available-for-sale (“AFS”).
Accordingly, although the EVE tables and NII tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net worth and NII. 64 Table of Contents Liquidity and Funds Management The objective of our liquidity management is to ensure the ability to meet our financial obligations.
Accordingly, although the EVE tables and NII tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net worth and NII. 66 Table of Contents Liquidity and Funds Management The objective of our liquidity management is to ensure the ability to meet our financial obligations.
We evaluate each customer’s creditworthiness on a case-by-case basis. For additional information about off-balance sheet arrangements, refer to the discussion “Item 8.
We evaluate each customer’s creditworthiness on a case-by-case basis. For additional information about off-balance sheet arrangements, refer to the discussion in “Item 8.
These projections incorporate expected cash flows on loans, investment securities, and deposits based on data used to prepare our interest rate risk analyses. As of December 31, 2023, Primis was not aware of any known trends, events or uncertainties that have or are reasonably likely to have a material impact on our liquidity.
These projections incorporate expected cash flows on loans, investment securities, and deposits based on data used to prepare our interest rate risk analyses. As of December 31, 2024, Primis was not aware of any known trends, events or uncertainties that have or are reasonably likely to have a material impact on our liquidity.
As of December 31, 2023, Primis has no material commitments or long-term debt for capital expenditures. Capital Resources Capital management consists of providing equity to support both current and future operations. Primis Financial Corp. and its subsidiary, Primis Bank, are subject to various regulatory capital requirements administered by the federal banking agencies.
As of December 31, 2024, Primis has no material commitments or long-term debt for capital expenditures. Capital Resources Capital management consists of providing equity to support both current and future operations. Primis Financial Corp. and its subsidiary, Primis Bank, are subject to various regulatory capital requirements administered by the federal banking agencies.
Financial Statements and Supplementary Data, Note 5 - Derivatives in this Form 10-K. ● Noninterest income each period includes actual amounts received during the period for interest reimbursement and amounts paid by the TPOS under the limited credit enhancement described above. ● Noninterest expense each period includes actual amounts paid during the period for performance fees and servicing fees as defined in our agreement with the TPOS.
Financial Statements and Supplementary Data, Note 4 – Derivatives, in this Form 10-K. ● Noninterest income each period includes actual amounts received during the period for interest reimbursement and amounts paid by the TPOS under the limited credit enhancement described above. ● Noninterest expense each period includes actual amounts paid during the period for performance fees and servicing fees as defined in our agreement with the TPOS.
Financial Statements and Supplementary Data, Note 16 – Financial Instruments With Off-Balance-Sheet Risk.” Allowance For Credit Losses - Off-Balance-Sheet Credit Exposures The allowance for credit losses on off-balance-sheet credit exposures is a liability account, calculated in accordance with ASC 326, representing expected credit losses over the contractual period for which we are exposed to credit risk resulting from a contractual obligation to extend credit.
Financial Statements and Supplementary Data, Note 15 – Financial Instruments With Off-Balance-Sheet Risk.” Allowance For Credit Losses - Off-Balance-Sheet Credit Exposures The allowance for credit losses on off-balance-sheet credit exposures is a liability account, calculated in accordance with ASC 326, representing expected credit losses over the contractual period for which we are exposed to credit risk resulting from a contractual obligation to extend credit.
The following tables are based on an analysis of our interest rate risk as measured by the estimated change in EVE resulting from instantaneous and sustained parallel shifts in the yield curve (plus 400 basis points or minus 400 basis points, measured in 100 basis point increments) as of December 31, 2023 and 2022.
The following tables are based on an analysis of our interest rate risk as measured by the estimated change in EVE resulting from instantaneous and sustained parallel shifts in the yield curve (plus 400 basis points or minus 400 basis points, measured in 100 basis point increments) as of December 31, 2024 and 2023.
These financial instruments include commitments to extend credit, standby letters of credit and guarantees of credit card accounts. These instruments involve elements of credit and funding risk in excess of the amount recognized in the consolidated balance sheets. Letters of credit are written conditional commitments issued by Primis to guarantee the performance of a customer to a third party.
These financial instruments include commitments to extend credit, standby letters of credit and guarantees of credit card accounts. These instruments involve elements of credit and funding risk in excess of the amount recognized in the consolidated balance sheets. Letters of credit are written conditional commitments issued by us to guarantee the performance of a customer to a third party.
Changes in assumptions, market data (for market-based assessments), or the discount rate (for income based assessments) could produce different results that lead to higher or lower fair value determinations compared to the results of our annual impairment testing performed as of September 30, 2023.
Changes in assumptions, market data (for market-based assessments), or the discount rate (for income based assessments) could produce different results that lead to higher or lower fair value determinations compared to the results of our annual impairment testing performed as of September 30, 2024.
For additional information on secured borrowings refer to “Item 8. Financial Statements and Supplementary Data, Note 1 –Organization and Significant Accounting Policies.” 62 Table of Contents Junior Subordinated Debt and Senior Subordinated Notes For information about junior subordinated debt and senior subordinated notes and their anticipated principal repayments refer to “Item 8.
For additional information on 64 Table of Contents secured borrowings refer to “Item 8. Financial Statements and Supplementary Data, Note 1 –Organization and Significant Accounting Policies.” ​ Junior Subordinated Debt and Senior Subordinated Notes For information about junior subordinated debt and senior subordinated notes and their anticipated principal repayments refer to “Item 8.
Financial Statements and Supplementary Data, Note 12 – Junior Subordinated Debt and Senior Subordinated Notes.” Interest Rate Sensitivity and Market Risk We are engaged primarily in the business of investing funds obtained from deposits and borrowings into interest-earning loans and investments.
Financial Statements and Supplementary Data, Note 11 – Junior Subordinated Debt and Senior Subordinated Notes.” Interest Rate Sensitivity and Market Risk We are engaged primarily in the business of investing funds obtained from deposits and borrowings into interest-earning loans and investments.
Management’s discussion and analysis is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Primis. This discussion and analysis should be read with the consolidated financial statements, the footnotes thereto, and the other financial data included in this report.
Management’s discussion and analysis (“MD&A”) is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Primis. This discussion and analysis should be read with the consolidated financial statements, the footnotes thereto, and the other financial data included in this report.
For our assessment of goodwill as of September 30, 2023, we performed a step one quantitative assessment to determine if the fair value of the Primis Bank and the Primis Mortgage reporting units were less than their carrying amount.
For our assessment of goodwill as of September 30, 2024, we performed a step one quantitative assessment to determine if the fair value of the Primis Bank and the Primis Mortgage reporting units were less than their carrying amount.
Treasury securities ● SBA guaranteed loan pools ● Agency securities ● Obligations of states and political subdivisions ● Corporate debt securities, with rated securities at investment grade ● Collateralized Loan Obligations (“CLOs”) ​ MBS are securities that have been developed by pooling a number of real estate mortgages and which are principally issued by agency/government-sponsored entities (“GSEs”) such as the GNMA, FNMA and FHLMC.
Treasury securities ● SBA guaranteed loan pools ● Agency securities ● Obligations of states and political subdivisions ● Corporate debt securities, with rated securities at investment grade 59 Table of Contents ● Collateralized Loan Obligations (“CLOs”) ​ MBS are securities that have been developed by pooling a number of real estate mortgages and which are principally issued by agency/government-sponsored entities (“GSEs”) such as the GNMA, FNMA and FHLMC.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7 of our Annual Report on Form 10-K generally discusses year-to-year comparisons between the years ended December 31, 2023 and 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7 of our Annual Report on Form 10-K generally discusses year-to-year comparisons between the years ended December 31, 2024 and 2023.
Further, subsequent evaluations of the then-existing loan portfolio, in light of factors existing at the time of subsequent evaluation may result in significant changes to the allowance. Goodwill As required under U.S. GAAP, we test goodwill for impairment at least annually and more frequently if there are indications that goodwill could be impaired.
Further, subsequent evaluations of the then-existing loan portfolio, in light of factors existing at the time of subsequent evaluation may result in significant changes to the allowance. 44 Table of Contents Goodwill As required under U.S. GAAP, we test goodwill for impairment at least annually and more frequently if there are indications that goodwill could be impaired.
As of December 31, 2023 and 2022, the most recent regulatory notifications categorized the Bank as well capitalized under regulatory framework for PCA. Federal banking agencies do not provide a similar well capitalized threshold for bank holding companies.
As of December 31, 2024 and 2023, the most recent regulatory notifications categorized the Bank as well capitalized under regulatory framework for PCA. Federal banking agencies do not provide a similar well capitalized threshold for bank holding companies.
Key characteristics of the combined arrangement include: ● The TPOS contributes funds to a reserve account at the time of origination to be used for future charge-offs if necessary. ● When a promotional loan pays off prior to the end of the promotional period, the customer owes no interest on the loan and any interest accrued during the period is waived.
Key characteristics of the combined arrangement include: ● The TPOS contributes funds to a reserve account at the time of origination to be used for future charge-offs if necessary. 45 Table of Contents ● When a promotional loan pays off prior to the end of the promotional period, the customer owes no interest on the loan and any interest accrued during the period is waived.
Loans will also be placed on nonaccrual status in cases where we are uncertain whether the borrower can satisfy the contractual terms of the loan 53 Table of Contents agreement. Cash payments received while a loan is categorized as nonaccrual will be recorded as a reduction of principal as long as doubt exists as to future collections.
Loans will also be placed on nonaccrual status in cases where we are uncertain whether the borrower can satisfy the contractual terms of the loan agreement. Cash payments received while a loan is categorized as nonaccrual will be recorded as a reduction of principal as long as doubt exists as to future collections.
The Consumer Program is governed by multiple interrelated agreements including the loan agreement between the Bank and the customer and agreements with the TPOS. The structure of the Consumer Program is intended to generate 43 Table of Contents loans that yield a targeted return to the Bank on a portfolio basis while also providing limited credit enhancement from the TPOS.
The Consumer Program is governed by multiple interrelated agreements including the loan agreement between the Bank and the customer and agreements with the TPOS. The structure of the Consumer Program is intended to generate loans that yield a targeted return to the Bank on a portfolio basis while also providing limited credit enhancement from the TPOS.
While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward 42 Table of Contents classification of assets.
While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward classification of assets.
The CMOs are designed so that the mortgage collateral will generate a cash flow sufficient to provide for the timely repayment of the bonds. The mortgage collateral 57 Table of Contents pool can be structured to accommodate various desired bond repayment schedules, provided that the collateral cash flow is adequate to meet scheduled bond payments.
The CMOs are designed so that the mortgage collateral will generate a cash flow sufficient to provide for the timely repayment of the bonds. The mortgage collateral pool can be structured to accommodate various desired bond repayment schedules, provided that the collateral cash flow is adequate to meet scheduled bond payments.
Investment securities available-for-sale are carried at fair value, with unrealized gains or losses net of deferred taxes, included in accumulated other comprehensive income (loss) in stockholders’ equity. Our portfolio of available-for-sale securities currently contains a material amount of unrealized mark-to-market adjustments due to increases in market interest rates since the original purchase of many of these securities.
Investment securities AFS are carried at fair value, with unrealized gains or losses net of deferred taxes, included in accumulated other comprehensive income (loss) in stockholders’ equity. Our portfolio of AFS securities currently contains a material amount of unrealized mark-to-market adjustments due to increases in market interest rates since the original purchase of many of these securities.
Financial Statements and Supplementary Data, Note 11 – Securities Sold Under Agreements To Repurchase And Other Short-Term Borrowings, Note 12 – Junior Subordinated Debt and Senior Subordinated Notes, and Note 16 – Financial Instruments With Off-Balance-Sheet Risk.” We prepare a cash flow forecast on a 30, 60 and 90 day basis along with a one and two year basis.
Financial Statements and Supplementary Data, Note 10 – Securities Sold Under Agreements To Repurchase And Other Short-Term Borrowings, Note 11 – Junior Subordinated Debt and Senior Subordinated Notes, and Note 15 – Financial Instruments With Off-Balance-Sheet Risk.” We prepare a cash flow forecast on a 30, 60 and 90 day basis along with a one and two year basis.
In this regard, the model assumes that the composition of our interest sensitive assets and liabilities existing at December 31, 2023 and 2022 remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities.
In this regard, the model assumes that the composition of our interest sensitive assets and liabilities existing as of December 31, 2024 and 2023 remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities.
Financial Statements and Supplementary Data, Note 3-Investment Securities.” 60 Table of Contents ​ Deposits and Other Borrowings Deposits The market for deposits is competitive. We offer a line of traditional deposit products that currently include noninterest-bearing and interest-bearing checking (or NOW accounts), commercial checking, money market accounts, savings accounts and certificates of deposit.
Financial Statements and Supplementary Data, Note 2 - Investment Securities.” ​ 62 Table of Contents Deposits and Other Borrowings Deposits The market for deposits is competitive. We offer a line of traditional deposit products that currently include noninterest-bearing and interest-bearing checking (or NOW accounts), commercial checking, money market accounts, savings accounts and certificates of deposit.
Our annual goodwill impairment testing date is September 30 and accordingly, we performed testing as of September 30, 2023 of our two reporting units that include goodwill.
Our annual goodwill impairment testing date is September 30 and accordingly, we performed testing as of September 30, 2024 of our two reporting units that include goodwill.
We recognize the accumulated deferred interest at the time of expiration discounted for the time value of money with the discount amortized over the remaining life of the loan. ● The agreement that governs the “performance fee” and interest reimbursement from the TPOS is a separate unit of account and meets the definition of a derivative under U.S.
We recognize the accumulated deferred interest at the time of expiration discounted for the time value of money with the discount amortized over the remaining life of the loan. ● The agreement that governs the Performance Fee and interest reimbursement from the TPOS is a separate unit of account and meets the definition of a derivative under U.S.
In addition, bank regulatory authorities, as part 56 Table of Contents of their periodic examination, may require additional charges to the provision for credit losses in future periods if the results of their reviews warrant additions to the allowance for credit losses.
In addition, bank regulatory authorities, as part of their periodic examination, may require additional charges to the provision for credit losses in future periods if the results of their reviews warrant additions to the allowance for credit losses.
Financial Statements and Supplementary Data, Note 4 - Loans and Allowance for Credit Losses”, as if such commitments were funded. ​
Financial Statements and Supplementary Data, Note 3 - Loans and Allowance for Credit Losses”, as if such commitments were funded. ​
Our allowance for credit losses is calculated by segmenting the loan portfolio by loan type and applying risk factors to each segment. The risk factors are determined by considering historical loss data, peer data, as well as applying management’s judgment.
Our allowance for credit losses is calculated by 50 Table of Contents segmenting the loan portfolio by loan type and applying risk factors to each segment. The risk factors are determined by considering historical loss data, peer data, as well as applying management’s judgment.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. We had letters of credit outstanding totaling $9.6 million and $10.7 million as of December 31, 2023 and 2022, respectively.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. We had letters of credit outstanding totaling $9.9 million and $9.6 million as of December 31, 2024 and 2023, respectively.
Debt investment securities that Primis has the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost. Investment securities classified as available-for-sale are those debt securities that may be sold in response to changes in interest rates, liquidity needs or other similar factors.
Debt investment securities that Primis has the positive intent and ability to hold to maturity are classified as HTM and carried at amortized cost. Investment securities classified as AFS are those debt securities that may be sold in response to changes in interest rates, liquidity needs or other similar factors.
If our level of core deposits are not sufficient to fully fund our lending activities, we have access to funding from additional sources, including but not limited to borrowing from the Federal Home Loan Bank of Atlanta and institutional certificates of deposits.
If our level of core deposits are not sufficient to fully fund our lending activities, we have access to funding from additional sources, including but not limited to borrowing from the FHLB of Atlanta and institutional certificates of deposits.
Quantitative measures established by regulation to ensure capital adequacy require Primis to maintain minimum amounts and ratios of Total and Tier I capital (as defined in the regulations) to average assets (as defined). Management believes, as of December 31, 2023, that Primis meets all capital adequacy requirements to which it is subject. See “Item 1.
Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of Total and Tier I capital (as defined in the regulations) to average assets (as defined). Management believes, as of December 31, 2024, that we meet all capital adequacy requirements to which it is subject. See “Item 1.
At December 31, 2023, Primis Bank had twenty-four full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland.
As of December 31, 2024, Primis Bank had twenty-four full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. Twenty-two full-service retail branches are in Virginia and two full-service retail branches are in Maryland.
The Company recorded a provision for credit losses of $32.5 million and $11.3 million for the years ended December 31, 2023 and 2022, respectively. The provision included amounts calculated in our normal reserve process for the Consumer Program loans which totaled $29.4 million and $3.0 million during the year ended December 31, 2023 and 2022, respectively.
The Company recorded a provision for credit losses of $50.6 million and $32.5 million for the years ended December 31, 2024 and 2023, respectively. The provision included amounts calculated in our normal reserve process for the Consumer Program loans which totaled $40.0 million and $29.4 million during the year ended December 31, 2024 and 2023, respectively.
Discussions of comparisons between 2022 and 2021 are not included in this Form10-K but can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our restated Annual Report on Form10-K/A for the year ended December 31, 2022 as filed with the SEC on October 4, 2024.
Discussions of comparisons between 2023 and 2022 are not included in this Form10-K but can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on October 15, 2024.
Net charge-offs were $14.9 million for the year ended December 31, 2023, up from $5.8 million for the year ended December 31, 2022. Included in net charge-offs is $8.4 million and $1.5 million for the years ended December 31, 2023 and 2022, respectively, related to the Consumer Program loan portfolio.
Net charge-offs were $49.1 million for the year ended December 31, 2024, up from $14.9 million for the year ended December 31, 2023. Included in net charge-offs is $46.0 million and $8.4 million for the years ended December 31, 2024 and 2023, respectively, related to the Consumer Program loan portfolio.
We have designed a credit matrix, which requires dual authority to approve any credit over $5.0 million. We have two specialty Executive Credit Officers with extensive industry experience in medical practice and life premium credit financing with authority up to $7.5 million and 54 Table of Contents joint authority with the Chief Credit Officer up to $10.0 million.
We have designed a credit matrix, which requires dual authority to approve any credit over $5.0 million. We have a specialty Executive Credit Officer with extensive industry experience in medical practice financing with authority up to $7.5 million and joint authority with the Chief Credit Officer up to $10.0 million.
Our assessment of the Primis Bank reporting unit included the use of three approaches, each receiving various weightings to determine an ultimate fair value estimate: (1) the comparable transactions method that is based on comparison to pricing ratios recently paid in the sale or merger of comparable banking institutions; (2) the public market peers control premium approach that is based on market pricing ratios of public banking companies adjusted for an industry based control premium, and (3) a discounted cash flow method (an income method), taking into consideration expectations of the Company’s growth and profitability going forward.
Our assessment of the reporting units includes the use of three or four approaches, each receiving various weightings to determine an ultimate fair value estimate: (1) the comparable transactions method that is based on comparison to pricing ratios recently paid in the sale or merger of comparable institutions; (2) the control premium approach that is based on the Company’s trading price, adjusted for holding company assets and an industry based control premium; (3) the public market peers control premium approach that is based on market pricing ratios of similar public companies adjusted for an industry based control premium, and (4) a discounted cash flow method (an income method), taking into consideration expectations of our growth and profitability going forward.
The Asset/Liability Committee makes reports to the board of directors on a quarterly basis. 66 Table of Contents Seasonality and Cycles We do not consider our commercial banking business to be seasonal. Off-Balance Sheet Arrangements Primis is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.
The ALCO makes reports to the Board of Directors on a quarterly basis. 68 Table of Contents Seasonality and Cycles We do not consider our commercial banking business to be seasonal. Off-Balance Sheet Arrangements We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers.
We recognized an immaterial amount of credit impairment charges related to credit losses on our held-to-maturity investment securities during 2023 and no credit losses during 2022. 58 Table of Contents The following table sets forth a summary of the investment securities portfolio as of the dates indicated.
We recognized no credit impairment charges related to credit losses on our HTM investment securities during 2024 and an immaterial amount in 2023. 60 Table of Contents The following table sets forth a summary of the investment securities portfolio as of the dates indicated.
Our interest rate risk management is the responsibility of the Bank’s Asset/Liability Management Committee (the “Asset/Liability Committee”). The Asset/Liability Committee has established policies and limits for management to monitor, measure and coordinate our sources, uses and pricing of funds.
Our interest rate risk management is the responsibility of the Bank’s ALCO. The ALCO has established policies and limits for management to monitor, measure and coordinate our sources, uses and pricing of funds.
The newer production represented approximately 19% of the portfolio at December 31, 2023 and is expected to improve the quality mix of the portfolio and result in lower realized net charge-offs in future periods. ​ Loan Review Our loan review program is administrated by the Chief Risk Officer and the Loan Review Manager who reports the results directly to the Audit Committee of the Board of Directors.
The newer production represented approximately 50% of the held for investment portfolio as of December 31, 2024 and is expected to improve the quality mix of the portfolio and result in lower realized net charge-offs and provisions for credit losses in future periods. ​ Loan Review Our loan review program is administrated by the Chief Risk Officer and the Loan Review Manager who reports the results directly to the Audit Committee of the Board of Directors.
In addition, we maintain federal funds lines of credit with two correspondent banks, totaling $75 million, and utilize securities sold under agreements to repurchase and reverse repurchase agreement borrowings from approved securities dealers as needed. For additional information about borrowings and anticipated principal repayments refer to the discussion about Contractual Obligations below and “Item 8.
In addition, we maintain federal funds lines of credit with three correspondent banks, totaling $90.0 million, and utilize securities sold under agreements to repurchase and reverse repurchase agreement borrowings from approved securities dealers as needed. For additional information about borrowings and anticipated principal repayments refer to the discussion previously in “Deposits and Other Borrowings” and “Item 8.
The loan review program also reviewed $96.0 million in unfunded commitments. ​ Primis Bank’s 2024 loan review program (the “Program”) was approved by the Audit Committee on January 25, 2024. The Program’s annual goal is to have an overall review penetration rate of 45.0% - 50.0% of the commercial loan portfolio outstanding as of December 31, 2023.
Our 2024 loan review program (the “Program”) was approved by the Audit Committee on January 25, 2024. The Program’s annual goal is to have an overall review penetration rate of 45.0% - 50.0% of the commercial loan portfolio outstanding as of December 31, 2024.
This older vintage lower credit score portion of the portfolio has driven the uptick in related charge-offs in 2023 which continued into 2024 and necessitated the update of the Company’s expected loss rates on this portfolio for purposes of determining the allowance for credit losses as discussed in the Provision for Credit Losses section of this MD&A.
This older vintage lower credit score portion of the portfolio has driven the uptick in related charge-offs during 2023 and 2024 and necessitated the update of the Company’s expected loss rates on this portfolio for purposes of determining the allowance for credit losses as of December 31, 2024 and 2023.
We have $199.3 million of loans outstanding in the Consumer Program, or 6% of our total gross loan portfolio, as of December 31, 2023.
We had $152.1 million and $199.3 million of loans outstanding in the Consumer Program, or 5% and 6% of our total gross loan portfolio, as of December 31, 2024 and 2023, respectively.
We are required to collateralize our borrowings from the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. At December 31, 2023 and 2022, total FHLB borrowings were $30.0 million and $325.0 million, respectively.
We are required to collateralize our borrowings from the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. We had no FHLB borrowings as of December 31, 2024, compared to total FHLB borrowings of $30.0 million as of December 31, 2023.
These loans are accounted for similar to our other consumer loans and are not placed on nonaccrual because they are charged off when they become 90 days past due. The allowance on this portfolio of loans was $22.4 million as of December 31, 2023 and represented 43% of our total allowance for credit losses.
These loans are accounted for similar to our other consumer loans and are not placed on nonaccrual because they are charged off when they become 90 days past due. The allowance on the held for investment loans balance of $38.9 million was $16.3 million as of December 31, 2024 and represented 30% of our total allowance for credit losses.
The Company tightened its origination criteria in regard to this portfolio in April of 2023 and from that point forward we generally originated loans to consumer borrowers being managed by the third party with FICO scores over 720, whereas prior period loan production included approximately 40% of loans to borrowers with weaker credit scores.
Net charge-offs on this portfolio were $46.0 during the year ended December 31, 2024, and represented approximately 94% of net charge-offs recorded during the year. ​ The Company tightened its origination criteria in regard to this portfolio in April of 2023 and from that point forward we generally originated loans to consumer borrowers being managed by the third party with FICO scores over 720, whereas prior periods loan production included approximately 40% of loans to borrowers with weaker credit scores.
Total uninsured deposits as calculated per regulatory guidance were $1.15 billion, or 34.8% of total deposits, at December 31, 2023.
Total uninsured deposits as calculated per regulatory guidance were $667.1 billion, or 20.8% of total deposits, as of December 31, 2024.
In addition to our Treasurer (who is the chairman of the Asset/Liability Committee) and our Controller, this committee is comprised of outside directors and other senior officers of the Bank, including but not limited to our Chief Executive Officer and our Chief Financial Officer.
In addition to our Chief Financial Officer (who is the chairman of the Asset/Liability Committee) this committee is comprised of outside directors and other senior officers of the Bank, including but not limited to our Chief Executive Officer. Investment management is performed in accordance with our investment policy, which is approved annually by the Board of Directors.
The assessment included use of various assumptions and inputs into the modeling approaches, including creating a baseline and conservative scenarios that stressed certain assumptions such as projected cash flows and the discount rate.
The assessment included use of various assumptions and inputs into the modeling approaches, including creating a baseline and conservative scenarios that stressed certain assumptions such as projected cash flows and the discount rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.
NOW accounts increased 25.2% from $617.7 million as of December 31, 2022 to $773.0 million as of December 31, 2023. Our deposits are diversified in type and by underlying customer and lack significant concentrations to any type of customer (i.e. commercial, consumer, government) or industry.
Our deposits are diversified in type and by underlying customer and lack significant concentrations to any type of customer (i.e. commercial, consumer, government) or industry. Total deposits decreased 3.0% to $3.2 billion as of December 31, 2024 from $3.3 billion as of December 31, 2023.
The following table sets forth the average balance and average rate paid on each of the deposit categories for the years ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ Average Average Average Average ​ ​ Balance ​ Rate ​ Balance ​ Rate ​ Noninterest-bearing demand deposits ​ $ 495,107 ​ $ 614,285 ​ Interest-bearing deposits: ​ ​ ​ Savings accounts ​ 777,143 3.83 % 224,755 0.33 % Money market accounts ​ 831,196 2.85 % 807,330 0.79 % NOW and other demand accounts ​ 784,680 1.96 % 698,907 0.33 % Time deposits ​ 474,178 3.12 % 350,720 1.11 % Total interest-bearing deposits ​ 2,867,197 2.92 % 2,081,712 0.64 % Total deposits ​ $ 3,362,304 ​ $ 2,695,997 ​ ​ The variety of deposit accounts we offer allows us to be competitive in obtaining funds and in responding to the threat of disintermediation (the flow of funds away from depository institutions such as banking institutions into direct investment vehicles such as government and corporate securities).
The following table sets forth the average balance and average rate paid on each of the deposit categories for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ ​ Average Average Average Average ​ ​ Balance ​ Rate ​ Balance ​ Rate ​ Noninterest-bearing demand deposits ​ $ 441,520 ​ $ 495,107 ​ Interest-bearing deposits: ​ ​ ​ Savings accounts ​ 825,129 4.06 % 777,143 3.83 % Money market accounts ​ 829,331 3.25 % 831,196 2.85 % NOW and other demand accounts ​ 772,099 2.42 % 784,680 1.96 % Time deposits ​ 421,058 3.94 % 474,178 3.12 % Total interest-bearing deposits ​ 2,847,617 3.36 % 2,867,197 2.92 % Total deposits ​ $ 3,289,137 ​ $ 3,362,304 ​ ​ The variety of deposit accounts we offer allows us to be competitive in obtaining funds and in responding to the threat of disintermediation (the flow of funds away from depository institutions such as banking institutions into direct investment vehicles such as government and corporate securities).
(2) Calculations include non-accruing loans in average loan amounts outstanding. ​ Net interest income was $98.7 million for the year ended December 31, 2023, compared to $101.7 million for the year ended December 31, 2022. Primis’ net interest margin for the year ended December 31, 2023 was 2.68%, compared to 3.30% for the year ended December 31, 2022.
(2) Calculations include non-accruing loans in average loan amounts outstanding. 49 Table of Contents ​ Net interest income was $104.2 million for the year ended December 31, 2024, compared to $98.7 million for the year ended December 31, 2023.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the goodwill impairment testing as of September 30, 2023 will prove to be an accurate prediction of the future.
As a result, there can be no assurance that the estimates and assumptions made for purposes of the goodwill impairment testing as of September 30, 2024 will prove to be an accurate prediction of the future.
The loans transferred have an average maturity of approximately ten years which will be the time over which the principal balance of the loans in our balance sheet and secured borrowings will pay down, absent borrower prepayments. There were no secured borrowings due to loan transfers as of and for the year ended December 31, 2022.
The loans transferred have an average maturity of approximately ten years which will be the time over which the principal balance of the loans in our balance sheet and secured borrowings will pay down, absent borrower prepayments.
Excluding the allowance on the Consumer Program loan portfolio the allowance to total loans was 0.99% as of December 31, 2023. 45 Table of Contents ● Asset quality improved meaningfully from December 31, 2022 with nonperforming assets as a percent of total assets (excluding SBA guarantees) at 0.20% at December 31, 2023 compared to 0.98% at December 31, 2022. ● Book value per share of $15.23 at December 31, 2023, representing a decrease of $0.53 from December 31, 2022 after incurring a net loss of $7.8 million and $0.40 per share in dividends paid during the year ended December 31, 2023. ​ ​ RESULTS OF OPERATIONS Net Income (Loss) Net loss attributable to common shareholders for the year ended December 31, 2023 was $7.8 million, or $0.32 per basic and diluted share, compared to net income of $14.1 million, or $0.57 per basic and diluted share for the year ended December 31, 2022.
Excluding the allowance on the Consumer Program loan portfolio the allowance to total loans was 1.29% as of December 31, 2024. ● Asset quality declined slightly from year end with nonperforming assets as a percent of total assets (excluding SBA guarantees) at 0.29% as of December 31, 2024 compared to 0.20% as of December 31, 2023. ● Book value per share of $14.23 as of December 31, 2024, representing a decrease of $1.00 from December 31, 2023, driven by net losses and payment of common stock dividends during the year ended December 31, 2024. ​ RESULTS OF OPERATIONS Net Loss Net loss attributable to common shareholders for the year ended December 31, 2024 was $16.2 million, or $0.66 loss per basic and diluted share, compared to net loss of $7.8 million, or $0.32 loss per basic and diluted share for the year 48 Table of Contents ended December 31, 2023.
As discussed previously, the increase in charge-offs on the Consumer Program loan portfolio have been driven by losses concentrated in loans originated between the third quarter of 2022 and the first quarter of 2023. Charge-offs from these vintages in 2023 were 79% of the total gross charge-offs in this portfolio of consumer loans.
Excluding these Consumer Program charge-offs we had a decrease in charge-offs from the prior year of $3.4 million. As discussed previously, the increase in charge-offs on the Consumer Program loan portfolio have been driven by losses concentrated in loans originated between the third quarter of 2022 and the first quarter of 2023.
As of December 31, 2023, 45% of the loans were in a promotional period requiring no payment of interest on their loans with 70% of these promotional loan periods ending in the second half of 2024 through the first quarter of 2025.
As of December 31, 2024, 22% of the principal balance of loans were in a promotional period requiring no payment of interest on their loans with 86% of these promotional loan periods ending during 2025.
Available-for-sale investment securities are reported at fair value, and held-to-maturity investment securities are reported at amortized cost (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 2022 Available-for-sale investment securities: ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 96,808 ​ $ 102,881 Obligations of states and political subdivisions ​ 30,080 ​ 29,178 Corporate securities ​ 14,048 ​ 14,828 Collateralized loan obligations ​ 4,982 ​ 4,876 Residential government-sponsored collateralized mortgage obligations ​ 34,471 ​ 26,595 Government-sponsored agency securities ​ 13,711 ​ 14,616 Agency commercial mortgage-backed securities ​ 30,110 ​ 37,417 SBA pool securities ​ 4,210 ​ 5,924 Total ​ $ 228,420 ​ $ 236,315 ​ ​ ​ ​ ​ ​ ​ Held-to-maturity investment securities: ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 9,040 ​ $ 10,522 Obligations of states and political subdivisions ​ 2,391 ​ 2,721 Residential government-sponsored collateralized mortgage obligations ​ 219 ​ 277 Total ​ $ 11,650 ​ $ 13,520 ​ ​ 59 Table of Contents The following table sets forth the amortized cost, fair value, and weighted average yield of our investment securities by contractual maturity at December 31, 2023.
AFS investment securities are reported at fair value, and HTM investment securities are reported at amortized cost (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Available-for-sale investment securities: ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 91,407 ​ $ 96,808 Obligations of states and political subdivisions ​ 29,705 ​ 30,080 Corporate securities ​ 15,080 ​ 14,048 Collateralized loan obligations ​ — ​ 4,982 Residential government-sponsored collateralized mortgage obligations ​ 56,390 ​ 34,471 Government-sponsored agency securities ​ 13,836 ​ 13,711 Agency commercial mortgage-backed securities ​ 22,178 ​ 30,110 SBA pool securities ​ 7,307 ​ 4,210 Total ​ $ 235,903 ​ $ 228,420 ​ ​ ​ ​ ​ ​ ​ Held-to-maturity investment securities: ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 7,760 ​ $ 9,040 Obligations of states and political subdivisions ​ 1,519 ​ 2,391 Residential government-sponsored collateralized mortgage obligations ​ 169 ​ 219 Total ​ $ 9,448 ​ $ 11,650 ​ ​ 61 Table of Contents The following table sets forth the amortized cost, fair value, and weighted average yield of our investment securities by contractual maturity as of December 31, 2024.
All changes are within our Asset/Liability Risk Management Policy guidelines (amounts in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of EVE ​ ​ As of December 31, 2023 ​ ​ EVE ​ EVE as a % of Change in Interest Rates ​ ​ ​ ​ $ Change ​ % Change ​ Total ​ Equity in Basis Points (Rate Shock) Amount From Base From Base Assets Book Value Up 400 ​ $ 428,175 ​ $ (54,019) (11.20) % 11.10 % 107.69 % Up 300 ​ 438,298 ​ (43,896) (9.10) % 11.37 % 110.24 % Up 200 ​ 447,711 ​ (34,483) (7.15) % 11.61 % 112.61 % Up 100 ​ 471,457 ​ (10,737) (2.23) % 12.22 % 118.58 % Base ​ 482,194 ​ — — % 12.50 % 121.28 % Down 100 ​ 486,399 ​ 4,205 0.87 % 12.61 % 122.34 % Down 200 ​ 477,430 ​ (4,764) (0.99) % 12.38 % 120.08 % Down 300 ​ 456,987 ​ (25,207) (5.23) % 11.85 % 114.94 % Down 400 ​ 417,079 ​ (65,115) (13.50) % 10.81 % 104.90 % ​ 63 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of EVE ​ ​ As of December 31, 2022 ​ ​ EVE ​ EVE as a % of Change in Interest Rates ​ ​ ​ ​ $ Change ​ % Change ​ Total ​ Equity in Basis Points (Rate Shock) Amount From Base From Base Assets Book Value Up 400 ​ $ 481,135 ​ $ (63,410) (11.64) % 13.49 % 123.70 % Up 300 ​ 496,136 ​ (48,409) (8.89) % 13.91 % 127.55 % Up 200 ​ 510,807 ​ (33,738) (6.20) % 14.32 % 131.32 % Up 100 ​ 534,163 ​ (10,382) (1.91) % 14.98 % 137.33 % Base ​ 544,545 ​ — — % 15.27 % 140.00 % Down 100 ​ ​ 539,297 ​ (5,248) (0.96) % 15.12 % 138.65 % Down 200 ​ 513,948 ​ (30,597) (5.62) % 14.41 % 132.13 % Down 300 ​ ​ 475,536 ​ (69,009) (12.67) % 13.33 % 122.26 % Down 400 ​ 406,524 ​ (138,021) (25.35) % 11.40 % 104.51 % ​ Our interest rate sensitivity is also monitored by management through the use of a model that generates estimates of the change in net interest income (“NII”) over a range of interest rate scenarios.
All changes are within our Asset/Liability Risk Management Policy guidelines (amounts in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of EVE ​ ​ As of December 31, 2024 ​ ​ EVE ​ EVE as a % of Change in Interest Rates ​ ​ ​ ​ $ Change ​ % Change ​ Total ​ Equity in Basis Points (Rate Shock) Amount From Base From Base Assets Book Value Up 400 ​ $ 438,490 ​ $ (68,444) (13.50) % 11.88 % 120.14 % Up 300 ​ 451,722 ​ (55,212) (10.89) % 12.24 % 123.77 % Up 200 ​ 464,410 ​ (42,524) (8.39) % 12.59 % 127.24 % Up 100 ​ 493,213 ​ (13,721) (2.71) % 13.37 % 135.13 % Base ​ 506,934 ​ — — % 13.74 % 138.89 % Down 100 ​ 509,055 ​ 2,121 0.42 % 13.80 % 139.47 % Down 200 ​ 493,913 ​ (13,021) (2.57) % 13.38 % 135.33 % Down 300 ​ 469,048 ​ (37,886) (7.47) % 12.71 % 128.51 % Down 400 ​ 435,781 ​ (71,153) (14.04) % 11.81 % 119.40 % ​ 65 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of EVE ​ ​ As of December 31, 2023 ​ ​ EVE ​ EVE as a % of Change in Interest Rates ​ ​ ​ ​ $ Change ​ % Change ​ Total ​ Equity in Basis Points (Rate Shock) Amount From Base From Base Assets Book Value Up 400 ​ $ 428,175 ​ $ (54,019) (11.20) % 11.10 % 107.69 % Up 300 ​ 438,298 ​ (43,896) (9.10) % 11.37 % 110.24 % Up 200 ​ 447,711 ​ (34,483) (7.15) % 11.61 % 112.61 % Up 100 ​ 471,457 ​ (10,737) (2.23) % 12.22 % 118.58 % Base ​ 482,194 ​ — — % 12.50 % 121.28 % Down 100 ​ ​ 486,399 ​ 4,205 0.87 % 12.61 % 122.34 % Down 200 ​ 477,430 ​ (4,764) (0.99) % 12.38 % 120.08 % Down 300 ​ ​ 456,987 ​ (25,207) (5.23) % 11.85 % 114.94 % Down 400 ​ 417,079 ​ (65,115) (13.50) % 10.81 % 104.90 % ​ Our interest rate sensitivity is also monitored by management through the use of a model that generates estimates of the change in net interest income (“NII”) over a range of interest rate scenarios.
The balance in repo accounts at December 31, 2023 and 2022 was $3.0 million and $6.4 million, respectively.
The balance in repo accounts as of December 31, 2024 and 2023 was $3.9 million and $3.0 million, respectively.
The Consumer Program derivative is comprised of $11.3 million of fair value adjustment gains on the derivative asset and $6.8 million of realized gains on the derivative in 2023. The derivative asset and related gains are driven by anticipated cash payments due to us from the third-party when borrowers prepay their loans in a no-interest promotional period.
The derivative asset and related gains or losses are driven by anticipated cash payments due to us from the third-party when borrowers prepay their loans in a no-interest promotional period.
All changes are within our ALM Policy guidelines at December 31, 2023 and 2022 (amounts in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of NII ​ ​ As of December 31, 2023 ​ ​ Adjusted NII Change in Interest Rates ​ ​ ​ ​ $ Change in Basis Points (Rate Shock) Amount From Base Up 400 ​ $ 98,539 ​ $ (16,112) Up 300 ​ 101,939 ​ (12,712) Up 200 ​ 105,326 ​ (9,325) Up 100 ​ 110,513 ​ (4,138) Base ​ 114,651 ​ — Down 100 ​ 117,230 ​ 2,579 Down 200 ​ 118,099 ​ 3,448 Down 300 ​ 118,114 ​ 3,463 Down 400 ​ 119,065 ​ 4,414 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of NII ​ ​ As of December 31, 2022 ​ ​ Adjusted NII Change in Interest Rates ​ ​ ​ ​ $ Change in Basis Points (Rate Shock) Amount From Base Up 400 ​ $ 108,514 ​ $ (12,447) Up 300 ​ 111,127 ​ (9,834) Up 200 ​ 113,730 ​ (7,231) Up 100 ​ 117,811 ​ (3,150) Base ​ 120,961 ​ — Down 100 ​ 122,070 ​ 1,109 Down 200 ​ 120,687 ​ (274) Down 300 ​ 117,272 ​ (3,689) Down 400 ​ 113,648 ​ (7,313) ​ Sensitivity of EVE and NII are modeled using different assumptions and approaches.
All changes are within our ALM Policy guidelines as of December 31, 2024 and 2023 (amounts in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of NII ​ ​ As of December 31, 2024 ​ ​ Adjusted NII Change in Interest Rates ​ ​ ​ ​ $ Change in Basis Points (Rate Shock) Amount From Base Up 400 ​ $ 95,367 ​ $ (15,874) Up 300 ​ 98,941 ​ (12,300) Up 200 ​ 102,472 ​ (8,769) Up 100 ​ 107,370 ​ (3,871) Base ​ 111,241 ​ — Down 100 ​ 114,126 ​ 2,885 Down 200 ​ 114,960 ​ 3,719 Down 300 ​ 115,205 ​ 3,964 Down 400 ​ 115,736 ​ 4,495 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of NII ​ ​ As of December 31, 2023 ​ ​ Adjusted NII Change in Interest Rates ​ ​ ​ ​ $ Change in Basis Points (Rate Shock) Amount From Base Up 400 ​ $ 98,539 ​ $ (16,112) Up 300 ​ 101,939 ​ (12,712) Up 200 ​ 105,326 ​ (9,325) Up 100 ​ 110,513 ​ (4,138) Base ​ 114,651 ​ — Down 100 ​ 117,230 ​ 2,579 Down 200 ​ 118,099 ​ 3,448 Down 300 ​ 118,114 ​ 3,463 Down 400 ​ 119,065 ​ 4,414 ​ Sensitivity of EVE and NII are modeled using different assumptions and approaches.
These ratios were not impacted by the goodwill impairment charge incurred during 2023 because goodwill is not a component of the calculations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum ​ ​ ​ ​ ​ ​ ​ ​ Required for ​ ​ ​ ​ ​ ​ ​ ​ Capital ​ To Be ​ Actual Ratio at ​ ​ Adequacy ​ Categorized as ​ December 31, ​ December 31, ​ ​ Purposes Well Capitalized (1) 2023 2022 Primis Financial Corp. ​ ​ Leverage ratio 4.00 % n/a 8.37 % 9.52 % Common equity tier 1 capital ratio 4.50 % n/a 8.96 % 10.07 % Tier 1 risk-based capital ratio 6.00 % n/a 9.25 % 10.40 % Total risk-based capital ratio 8.00 % n/a 13.44 % 14.33 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Primis Bank ​ ​ ​ ​ ​ ​ ​ Leverage ratio 4.00 % 5.00 % 9.80 % 11.24 % Common equity tier 1 capital ratio 7.00 % 6.50 % 10.88 % 12.40 % Tier 1 risk-based capital ratio 8.50 % 8.00 % 10.88 % 12.40 % Total risk-based capital ratio 10.50 % 10.00 % 12.12 % 13.59 % (1) Prompt corrective action provisions are not applicable at the bank holding company level.
Business, Supervision and Regulation—Capital Requirements” for more information. 67 Table of Contents The following table provides a comparison of the leverage and risk-weighted capital ratios of Primis Financial Corp. and Primis Bank at the periods indicated to the minimum and well-capitalized required regulatory standards. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum ​ ​ ​ ​ ​ ​ ​ ​ Required for ​ ​ ​ ​ ​ ​ ​ ​ Capital ​ To Be ​ Actual Ratio at ​ ​ Adequacy ​ Categorized as ​ December 31, ​ December 31, ​ ​ Purposes Well Capitalized (1) 2024 2023 Primis Financial Corp. ​ ​ Leverage ratio 4.00 % n/a 7.76 % 8.37 % Common equity tier 1 capital ratio 4.50 % n/a 8.74 % 8.96 % Tier 1 risk-based capital ratio 6.00 % n/a 9.05 % 9.25 % Total risk-based capital ratio 8.00 % n/a 12.53 % 13.44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Primis Bank ​ ​ ​ ​ ​ ​ ​ Leverage ratio 4.00 % 5.00 % 9.10 % 9.80 % Common equity tier 1 capital ratio 7.00 % 6.50 % 10.78 % 10.88 % Tier 1 risk-based capital ratio 8.50 % 8.00 % 10.78 % 10.88 % Total risk-based capital ratio 10.50 % 10.00 % 12.04 % 12.12 % (1) Prompt corrective action provisions are not applicable at the bank holding company level.
We had charge-offs totaling $16.7 million and $8.1 million during the year ended December 31, 2023 and 2022, respectively.
We had charge-offs totaling $51.0 million and $16.7 million during the year ended December 31, 2024 and 2023, respectively. During the year ended December 31, 2024 and 2023, $47.6 million and $8.8 million of charge-offs were related to the Consumer Program, respectively. There were recoveries totaling $1.9 million and $1.8 million during year ended December 31, 2024 and 2023, respectively.
The following table summarizes changes in net interest income attributable to changes in the volume of interest-earning assets and interest-bearing liabilities compared to changes in interest rates.
During the year ended December 31, 2024, that cash was redeployed to other earning assets such as investment securities and loans. The following table summarizes changes in net interest income attributable to changes in the volume of interest-earning assets and interest-bearing liabilities compared to changes in interest rates.
Loans rated internally as special mention loans, which is one internal credit rating higher than substandard, totaled $14.9 million as of December 31, 2023 and $32.3 million as of December 31, 2022 . We will generally place a loan on nonaccrual status when it becomes 90 days past due.
Loans rated internally as special mention loans, which is one internal credit rating higher than substandard, totaled $30.3 million as of December 31, 2024 and $14.9 million as of December 31, 2023 .
Primis Bank had a capital conservation buffer of 4.12% at December 31, 2023, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions. Impact of Inflation and Changing Prices The financial statements and related financial data presented in this Annual Report on Form 10-K concerning Primis Financial Corp. have been prepared in accordance with U.S.
Impact of Inflation and Changing Prices The financial statements and related financial data presented in this Annual Report on Form 10-K concerning Primis Financial Corp. have been prepared in accordance with U.S.
Noninterest Income The following table presents the categories of noninterest income for the years ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, (dollars in thousands) 2023 2022 Change Account maintenance and deposit service fees ​ $ 5,733 ​ $ 5,745 $ (12) Income from bank-owned life insurance ​ 2,021 ​ 1,994 ​ 27 Mortgage banking income ​ 17,645 ​ 5,054 ​ 12,591 Gain on other investments ​ ​ 184 ​ ​ 4,709 ​ ​ (4,525) Consumer Program derivative ​ ​ 18,120 ​ ​ 65 ​ ​ 18,055 Other noninterest income ​ 1,547 ​ 785 ​ 762 Total noninterest income ​ $ 45,250 ​ $ 18,352 $ 26,898 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income increased 147% to $45.3 million for the year ended December 31, 2023, compared to $18.4 million for the year ended December 31, 2022.
Noninterest Income The following table presents the categories of noninterest income for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, (dollars in thousands) 2024 2023 Change Account maintenance and deposit service fees ​ $ 5,784 ​ $ 5,733 $ 51 Income from bank-owned life insurance ​ 2,410 ​ 2,021 ​ 389 Mortgage banking income ​ 23,919 ​ 17,645 ​ 6,274 Gain on other investments ​ ​ 408 ​ ​ 184 ​ ​ 224 Gain on sale of Life Premium Finance portfolio, net of broker fees ​ ​ 4,723 ​ ​ — ​ ​ 4,723 Consumer Program income ​ ​ 4,320 ​ ​ 18,120 ​ ​ (13,800) Other noninterest income ​ 1,576 ​ 1,547 ​ 29 Total noninterest income ​ $ 43,140 ​ $ 45,250 $ (2,110) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income decreased 4.7% to $43.1 million for the year ended December 31, 2024, compared to $45.3 million for the year ended December 31, 2023.
The increase in noninterest income was partially offset by gains on the sale of an other equity investment in the prior year that did not reoccur in the current year. ​ 49 Table of Contents Noninterest Expense The following table present the major categories of noninterest expense for the years ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, (dollars in thousands) 2023 2022 Change Salaries and benefits ​ $ 58,765 ​ $ 49,005 ​ $ 9,760 Occupancy expenses ​ 6,239 ​ 5,628 ​ 611 Furniture and equipment expenses ​ 6,381 ​ 5,231 ​ 1,150 Amortization of core deposit intangible ​ 1,269 ​ 1,325 ​ (56) Virginia franchise tax expense ​ 3,395 ​ 3,254 ​ 141 FDIC insurance assessment ​ ​ 2,929 ​ ​ 890 ​ ​ 2,039 Data processing expense ​ 9,545 ​ 6,013 ​ 3,532 Marketing expense ​ ​ 1,819 ​ ​ 3,067 ​ ​ (1,248) Telephone and communication expense ​ 1,507 ​ 1,433 ​ 74 Loss on bank premises and equipment and assets held for sale ​ ​ 476 ​ ​ 684 ​ ​ (208) Professional fees ​ 4,641 ​ 4,787 ​ (146) Miscellaneous lending expenses ​ ​ 3,006 ​ ​ 1,710 ​ ​ 1,296 Goodwill impairment ​ ​ 11,150 ​ ​ — ​ ​ 11,150 Fraud losses ​ ​ 3,311 ​ ​ 108 ​ ​ 3,203 Other operating expenses ​ 8,167 ​ 8,313 ​ (146) Total noninterest expenses ​ $ 122,600 ​ $ 91,448 ​ $ 31,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expenses were $122.6 million during the year ended December 31, 2023, compared to $91.4 million during the year ended December 31, 2022.
Noninterest Expense The following table present the major categories of noninterest expense for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, (dollars in thousands) 2024 2023 Change Salaries and benefits ​ $ 66,615 ​ $ 58,765 ​ $ 7,850 Occupancy expenses ​ 5,415 ​ 6,239 ​ (824) Furniture and equipment expenses ​ 7,327 ​ 6,381 ​ 946 Amortization of core deposit intangible ​ 1,265 ​ 1,269 ​ (4) Virginia franchise tax expense ​ 2,525 ​ 3,395 ​ (870) FDIC insurance assessment ​ ​ 2,549 ​ ​ 2,929 ​ ​ (380) Data processing expense ​ 10,564 ​ 9,545 ​ 1,019 Marketing expense ​ ​ 1,906 ​ ​ 1,819 ​ ​ 87 Telephone and communication expense ​ 1,312 ​ 1,507 ​ (195) (Gain) loss on bank premises and equipment and assets held for sale ​ ​ (463) ​ ​ 476 ​ ​ (939) Professional fees ​ 10,384 ​ 4,641 ​ 5,743 Goodwill impairment ​ ​ — ​ ​ 11,150 ​ ​ (11,150) Fraud losses ​ ​ 2,039 ​ ​ 3,311 ​ ​ (1,272) Miscellaneous lending expenses ​ ​ 3,280 ​ 3,006 ​ 274 Other operating expenses ​ 10,926 ​ 8,167 ​ 2,759 Total noninterest expenses ​ $ 125,644 ​ $ 122,600 ​ $ 3,044 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expenses were $125.6 million during the year ended December 31, 2024, compared to $122.6 million during the year ended December 31, 2023.
Primis Bank actively pursues business relationships by utilizing the business contacts of its senior management, other bank officers and its directors, thereby capitalizing on its knowledge of its local market areas. ​ FINANCIAL HIGHLIGHTS ● Net loss attributable to common shareholders for the year ended December 31, 2023 totaled $7.8 million, or $0.32 per basic and per diluted share, compared to net income of $14.1 million, or $0.57 per basic and diluted share for the year ended December 31, 2022 . ● Total assets as of December 31, 2023 were $3.9 billion, an increase of 8.1% compared to December 31, 2022. ● Total loans, excluding Paycheck Protection Program ( PPP) balances as of December 31, 2023, were $3.2 billion, an increase of $269.7 million, or 9.2%, from December 31, 2022. ● Total deposits were $3.3 billion at December 31, 2023, an increase of 20.1% compared to December 31, 2022 . ● Non-time deposits increased to $2.8 billion at December 31, 2023, an increase of $566.9 million compared to December 31, 2022 . ● Non-interest bearing demand deposits decreased to $472.9 million, or 14.5% of total deposits, at December 31, 2023.
Primis Bank actively pursues business relationships by utilizing the business contacts of its senior management, other bank officers and its directors, thereby capitalizing on its knowledge of its local market areas. ​ ​ 47 Table of Contents FINANCIAL HIGHLIGHTS Income Statement ● Net loss attributable to common shareholders for the year ended December 31, 2024 totaled $16.2 million, or $0.66 loss per basic and per diluted share, compared to net loss of $7.8 million, or $0.32 loss per basic and diluted share for the year ended December 31, 2023 . ● Net interest income increased $5.5 million, or 5.6% to $104.2 million for the year ended December 31, 2024, compared to $98.7 million for the year ended December 31, 2023. ● Net interest margin increased to 2.86% for the year ended December 31, 2024, compared to 2.68% for the year ended December 31, 2023. ● Yield on loans held for investment increased to 6.02% during the year ended December 31, 2024 compared to 5.44% during the year ended December 31, 2023.

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