Primis(FRST) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Presents Q1 2025 unaudited financial statements, management's discussion, market risk, and internal controls Item 1 - Financial Statements Presents Q1 2025 unaudited consolidated financial statements, including balance sheets, income, equity, cash flows, and notes Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows a slight asset increase, reclassification of loans, and higher stockholders' equity | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total assets | $3,697,310 | $3,690,115 | $7,195 | | Total loans held for sale | $74,439 | $247,108 | $(172,669) | | Net loans | $2,999,327 | $2,833,723 | $165,604 | | Investment in Panacea Financial Holdings, Inc. common stock | $21,227 | $— | $21,227 | | Total liabilities | $3,321,747 | $3,325,133 | $(3,386) | | Total stockholders' equity | $375,563 | $364,982 | $10,581 | Condensed Consolidated Statements of Income and Comprehensive Income Q1 2025 net income significantly increased due to Panacea deconsolidation gain, improved net interest income, and lower credit loss provision | Metric | For the Three Months Ended March 31, 2025 (in thousands) | For the Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Net income attributable to Primis' common stockholders | $22,636 | $2,466 | $20,170 | | Earnings per share, diluted | $0.92 | $0.10 | $0.82 | | Gain on deconsolidation of Panacea Financial Holdings, Inc. | $24,578 | $— | $24,578 | | Net interest income | $26,364 | $25,269 | $1,095 | | Provision for credit losses | $1,596 | $6,508 | $(4,912) | | Total noninterest income | $32,335 | $10,307 | $22,028 | | Total noninterest expenses | $32,516 | $27,538 | $4,978 | Condensed Consolidated Statements of Changes in Stockholders' Equity Total equity increased from net income and comprehensive income, partially offset by dividends and Panacea deconsolidation impact | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total stockholders' equity | $375,563 | $364,982 | $10,581 | | Net income | $22,636 | $19,034 (Q1 2025) | $3,602 | | Other comprehensive income | $3,612 | $(1,838) (Q1 2024) | $5,450 | | Panacea Financial Holdings, Inc. deconsolidation (Noncontrolling Interests) | $(9,624) | $13,226 (Dec 31, 2024) | $(22,850) | Condensed Consolidated Statements of Cash Flows Operating cash flow improved, investing activities used cash, and financing activities shifted to cash usage, leading to a net cash decrease | Metric | For the Three Months Ended March 31, 2025 (in thousands) | For the Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :-------------------- | | Net cash provided by (used in) operating activities | $34,393 | $(965) | $35,358 | | Net cash used in investing activities | $(27,307) | $(26,343) | $(964) | | Net cash provided (used in) by financing activities | $(14,547) | $38,472 | $(53,019) | | Net change in cash and cash equivalents | $(7,461) | $11,164 | $(18,625) | | Loans held for sale transferred to held for investment | $152,092 | $— | $152,092 | Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed accounting policies, significant events, and specific financial instrument information for the condensed consolidated statements 1. Accounting Policies Outlines Primis Financial Corp.'s business, subsidiaries, Panacea deconsolidation accounting, Life Premium Finance disposition, and key accounting practices - Primis Bank operates 24 full-service branches in Virginia and Maryland, offering a range of financial services[16] - Panacea Financial Holdings, Inc. (PFH) was deconsolidated on March 31, 2025, due to changes in the relationship and control, resulting in a $24.6 million gain for Primis[16][23][25] - The company now accounts for its 19% common stock investment in PFH at fair value under ASC 825, with a retained interest of $21.2 million at deconsolidation[24][25] - The disposition of the Life Premium Finance (LPF) division was completed by January 31, 2025, with approximately $64 million of additional loans sold to EverBank[29] - The company has two reportable operating segments: Primis Mortgage and Primis Bank[30] 2. Investment Securities Details available-for-sale and held-to-maturity investment securities, their fair values, and unrealized gains/losses, noting no credit impairment | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Total available-for-sale securities | $241,638 | $235,903 | | Total held-to-maturity securities | $9,153 | $9,448 | | Gross unrealized losses on available-for-sale securities | $(22,782) | $(26,966) | - No allowance for credit losses has been recorded for held-to-maturity securities, as they are backed by the U.S. government or deemed low risk[43] - As of March 31, 2025, 155 available-for-sale investment securities were in an unrealized loss position, primarily due to changes in interest rates, not credit-related impairment[44] 3. Loans and Allowance for Credit Losses Covers loan portfolio composition, reclassification of Consumer Program loans, nonaccrual loans, credit quality, and allowance for credit losses activity | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Total loans held for investment | $3,043,348 | $2,887,447 | | Total loans held for sale | $74,439 | $247,108 | | Total nonaccrual loans | $12,950 | $15,026 | | Allowance for credit losses | $44,021 | $53,724 | | Provision for credit losses (Q1) | $1,596 | $6,508 | - Approximately $101.6 million of Consumer Program loans were transferred from held for sale back to the consumer loans category within loans held for investment as of March 31, 2025[49] - During Q1 2025, 667 Consumer Program loans with an amortized cost of $5.7 million were modified, primarily through settlements or term extensions, to enhance collections and mitigate charge-offs[72] - Net charge-offs for the three months ended March 31, 2025, totaled $14.3 million, with $10.8 million attributed to the Consumer Program portfolio[80][177] 4. Derivatives Describes derivative instruments, including Consumer Program and mortgage banking derivatives, their fair values, and key valuation inputs | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Consumer Program derivative asset | $1,597 | $4,511 | | Mortgage banking derivative assets | $1,415 | $1,000 | | Input for IRLCs | March 31, 2025 | December 31, 2024 | | :---------------------- | :------------- | :---------------- | | Average pullthrough rates | 82.95 % | 89.19 % | | Average costs to originate | 1.35 % | 1.31 % | 5. Fair Value Presents assets and liabilities measured at fair value, categorized by hierarchy, highlighting significant unobservable inputs for specific assets | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Total assets measured at fair value (recurring) | $590,449 | $573,962 | | Investment in Panacea Financial Holdings, Inc. common stock (Level 3) | $21,227 | $— | | Consumer Program derivative (Level 3) | $1,597 | $4,511 | - The fair value of net loans, time deposits, junior subordinated debt, and senior subordinated notes are measured using the exit-price notion[103] 6. Leases Details operating leases, including right-of-use assets, lease liabilities, weighted-average term, discount rate, and maturity analysis | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Operating lease liabilities | $11,639 | $11,566 | | Operating lease right-of-use assets | $10,352 | $10,279 | | Metric | March 31, 2025 | | :--------------------------------------- | :------------- | | Weighted-average remaining lease term (years) | 5.9 | | Weighted-average discount rate | 4.0 % | 7. Debt and Other Borrowings Outlines various debt instruments, borrowing capacity from FHLB and Federal Reserve, and the nature of secured borrowings | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Securities sold under agreements to repurchase | $4,019 | $3,918 | | Junior subordinated debt | $9,892 | $9,880 | | Senior subordinated notes | $86,057 | $85,998 | | Secured borrowings | $16,729 | $17,195 | - Primis Bank had $541.3 million in lendable collateral value from the FHLB and $550.5 million in borrowing capacity from the Federal Reserve discount window as of March 31, 2025, with no current borrowings under these programs[108] 8. Stock-Based Compensation Summarizes stock-based compensation plans, including activity, recognized expense, and unrecognized expense for various award types | Metric | For the Three Months Ended March 31, 2025 (in thousands) | For the Three Months Ended March 31, 2024 (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Stock-based compensation expense (time vested restricted stock) | $31 | $200 | - Unrecognized compensation expense for time-vested restricted stock awards was $0.1 million, expected to be recognized over a weighted average period of 2.5 years[118] - Unrecognized compensation expense for performance-based restricted stock units was $4.2 million as of March 31, 2025, but no expense was recognized during the quarter due to the low probability of vesting[120][121] 9. Commitments and Contingencies Describes off-balance sheet risks, such as credit commitments and letters of credit, and the allowance for credit losses on these exposures | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Letters of credit outstanding | $17,700 | $9,900 | | Unfunded lines of credit and undisbursed construction loan funds | $403,500 | $459,200 | | Metric | March 31, 2025 (in thousands) | January 1, 2025 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Allowance for credit losses on off-balance-sheet credit exposures | $1,134 | $1,121 | 10. Earnings Per Share Reconciles denominators for basic and diluted earnings per share computations for the three months ended March 31, 2025 and 2024 | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Basic EPS | $0.92 | $0.10 | | Diluted EPS | $0.92 | $0.10 | 11. Segment Information Identifies Primis Bank and Primis Mortgage as reportable segments, providing a breakdown of their financial performance - The company's two reportable operating segments are Primis Bank and Primis Mortgage[131] | Segment | Net Income Attributable to Primis' Common Stockholders (Q1 2025, in thousands) | Net Income Attributable to Primis' Common Stockholders (Q1 2024, in thousands) | | :---------------- | :---------------------------------------------------------------- | :---------------------------------------------------------------- | | Primis Bank | $4,267 | $3,411 | | Primis Mortgage | $772 | $1,032 | Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion of financial condition and results for Q1 2025, covering business overview, highlights, and detailed financial analysis Forward-Looking Statements Cautionary statement on forward-looking statements, highlighting inherent risks and uncertainties that could affect actual results - Forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict and beyond the company's control[139] - Key risk factors include economic conditions, credit and financial market disruptions, geopolitical events, fraudulent acts, ability to implement strategic initiatives, litigation, changes in interest rates, and regulatory actions[141] Overview Introduces Primis Financial Corp. and Primis Bank operations, branch network, Panacea deconsolidation, and commercial lending focus - Primis Bank operates 24 full-service branches in Virginia and Maryland, providing financial services to individuals and small/medium-sized businesses[145] - Panacea Financial Holdings, Inc. (PFH) was deconsolidated on March 31, 2025, but will continue to partner with the Panacea Division of the Bank for loan origination[145] - Primis Bank's core business focuses on commercial real estate and other secured/unsecured commercial loans, funded primarily by deposits[146] Operational Highlights Q1 2025 operational successes across core banking, mortgage warehouse, Panacea, and Primis Mortgage, including loan growth and improved earnings - Core bank loan pipeline increased to $228 million as of March 31, 2025, from $119 million as of December 31, 2024[147] - Core bank's cost of deposits was 1.83% in Q1 2025, supported by almost 20% noninterest-bearing deposits[147] - Mortgage warehouse outstanding loan balances grew 80% to $115 million as of March 31, 2025, from $64 million as of December 31, 2024[147] - Panacea Financial Division's outstanding loan balances grew $40 million (9% unannualized) in Q1 2025, from $433.8 million as of December 31, 2024[150] - Primis Mortgage earned approximately $0.8 million pre-tax in Q1 2025, up from $0.4 million in Q4 2024, with locked loan volume increasing 27% QoQ to $257 million[150] Financial Highlights Q1 2025 financial performance, including increased net income from PFH deconsolidation, stable assets, improved net interest margin, and strengthened capital | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Net income available to common shareholders | $22,600 | $2,500 | $20,100 | | Total loans held for investment | $3,000,000 | $2,800,000 | $200,000 | | Net interest margin | 3.15% | 2.84% | 0.31% | | Allowance for credit losses to total loans | 1.45% | 1.86% | (0.41%) | | Common Equity Tier 1 capital ratio | 9.35% | 8.74% | 0.61% | - Net income was primarily driven by a $24.6 million gain on the deconsolidation of Panacea Financial Holdings, Inc[151] - Total loans held for investment increased by $0.2 billion (5.4%) due to growth in Panacea and mortgage warehouse lending, and the transfer of $0.1 billion of Consumer Program loans back from held for sale[151] - Noninterest expense increased by $5.0 million due to personnel costs, professional fees, and data processing costs, with expected annual savings of $6-8 million from core system consolidation by early to mid-2026[151] Results of Operations Detailed analysis of net income, net interest income, provision for credit losses, noninterest income, and expenses for Q1 2025 Net Income Significant increase in Q1 2025 net income, driven by Panacea deconsolidation gain, higher net interest income, and lower credit loss provision | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Net income available to common shareholders | $22,636 | $2,466 | $20,170 | - The increase in net income was driven by a $24.6 million gain on the deconsolidation of PFH, a $1.1 million increase in net interest income, and a $4.9 million decrease in provision for credit losses[152] Net Interest Income Net interest income increased in Q1 2025 due to improved net interest margin, lower liability costs, and despite reduced interest-earning assets | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Net interest income | $26,364 | $25,269 | $1,095 | | Net interest margin | 3.15% | 2.84% | 0.31% | - Average interest-bearing liabilities declined by $139 million, with rates paid on these liabilities decreasing by 34 basis points, largely due to a 100 basis point decline in the fed funds borrowing rate[154] - Average earning asset balances decreased by $184 million, primarily due to a $309 million decline in average loan balances from the sale of the Life Premium Finance portfolio, partially offset by growth in Panacea and Mortgage Warehouse loan portfolios[155] Provision for Credit Losses Significant decrease in Q1 2025 provision for credit losses, mainly due to lower provisioning for Consumer Program loans after prior charge-offs | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Provision for credit losses | $1,596 | $6,508 | $(4,912) | | Provision for Consumer Program loans | $1,900 | $4,900 | $(3,000) | - Excluding the Consumer Program, the company recorded a benefit for expected losses of $0.3 million in Q1 2025, compared to a provision of $1.6 million in Q1 2024[161] Noninterest Income Substantial increase in Q1 2025 noninterest income, primarily from the Panacea deconsolidation gain, partially offset by lower derivative income | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Total noninterest income | $32,335 | $10,307 | $22,028 | | Gain on deconsolidation of Panacea Financial Holdings, Inc. | $24,578 | $— | $24,578 | | Consumer Program derivative (loss) income | $(292) | $2,041 | $(2,333) | - The decline in Consumer Program derivative income was primarily due to fair value loss adjustments of $2.9 million in Q1 2025, as $21.1 million of loans exited their no-interest promotional period[163] Noninterest Expense Increased noninterest expenses in Q1 2025, driven by higher salaries, professional fees, and data processing costs, with future savings expected from system consolidation | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :--------------------- | :--------------------- | :-------------------- | | Total noninterest expenses | $32,516 | $27,538 | $4,978 | | Salaries and benefits | $17,941 | $15,735 | $2,206 | | Professional fees | $2,225 | $1,365 | $860 | | Data processing expense | $2,849 | $2,231 | $618 | - The increase in salaries and benefits was due to growth in the mortgage line of business and expenses from PFH prior to deconsolidation[166] - The company expects annual savings of approximately $6 million to $8 million from consolidating its core operational systems, with an anticipated impact beginning early to mid-2026[166] Financial Condition Details changes in loans, asset quality, allowance for credit losses, investment securities, deposits, and borrowings, highlighting portfolio trends Loans Held for Sale Significant decline in Q1 2025 loans held for sale due to LPF loan sales and reclassification of Consumer Program loans | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total loans held for sale | $74,439 | $247,108 | $(172,669) | - The decline was driven by the sale of $50.7 million of LPF loans and the transfer of $101.7 million of Consumer Program loans back to held for investment[168] Loans Gross loans held for investment increased in Q1 2025 due to Consumer Program loan transfers and growth in mortgage warehouse and Panacea divisions | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Gross loans held for investment | $3,043,348 | $2,887,447 | | Loan Type (March 31, 2025) | Amount (in thousands) | Percent of Total Loans | | :--------------------------------------- | :-------------------- | :--------------------- | | Total real estate loans | $1,980,749 | 65.1% | | Commercial loans | $698,097 | 22.9% | | Consumer loans | $357,652 | 11.7% | Asset Quality; Past Due Loans and Nonperforming Assets Asset quality remained stable in Q1 2025, with a decrease in nonperforming assets driven by lower nonaccrual loans | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Total nonperforming assets | $14,663 | $16,739 | | Nonaccrual loans | $12,950 | $15,026 | | Nonperforming assets excluding SBA guaranteed loans to total assets | 0.28% | 0.29% | - The decrease in nonaccrual loans was primarily due to $2.5 million of paydowns on one relationship, partially offset by new nonaccrual placements[173] Allowance for Credit Losses Allowance for credit losses decreased in Q1 2025 due to net charge-offs, primarily from Consumer Program, and improved credit quality | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Allowance for credit losses | $44,000 | $53,700 | | Net charge-offs (Q1 2025) | $11,300 | N/A | | Allowance for credit losses to total loans | 1.45% | 1.86% | - Net charge-offs of $11.3 million in Q1 2025 were primarily related to $10.8 million in the Consumer Program portfolio[177] - The allowance for the Consumer Program loan portfolio was $7.5 million as of March 31, 2025, representing 17% of the total allowance, with 128% coverage of non-current principal balances[178] Investment Securities Total investment securities slightly increased in Q1 2025, with unrealized losses on available-for-sale securities due to interest rates, not credit impairment | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Total investment securities | $250,800 | $245,400 | - Available-for-sale securities are carried at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss)[180] - No credit impairment charges were recognized related to credit losses on held-to-maturity investment securities during Q1 2025[181] Deposits and Other Borrowings Details funding sources, including stable deposits with a shift to lower-cost accounts, and utilization of FHLB and Federal Reserve borrowing capacities Deposits Total deposits remained stable in Q1 2025, with a favorable shift towards lower-cost demand and NOW deposit balances | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Total deposits | $3,200,000 | $3,200,000 | - Lower-cost demand and NOW deposit balances increased by $9.2 million, offsetting a decline in money market deposit accounts[186] - Uninsured deposits totaled $623.5 million, representing 20% of total deposits as of March 31, 2025[187] Other Borrowings Utilizes various borrowed funds for liquidity, maintaining significant unused borrowing capacity with FHLB and Federal Reserve | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | Securities sold under agreements to repurchase | $4,000 | $3,900 | | Secured borrowings | $16,700 | $17,200 | - The company had $366.3 million of unused FHLB lines of credit and $550.5 million of available credit with the Federal Reserve Bank as of March 31, 2025, with no FHLB borrowings outstanding[188] Junior Subordinated Debt and Senior Subordinated Notes Refers to Note 7 for detailed information on the company's junior subordinated debt and senior subordinated notes Liquidity and Funds Management Manages liquidity to meet obligations through diverse funding sources and regular cash flow forecasts - Funding sources include customer deposits, payments on loans and investments, FHLB borrowings, and federal funds lines of credit[193] - Cash flow forecasts are prepared on a 30, 60, and 90-day basis, as well as one and two-year bases, incorporating expected cash flows on loans, investment securities, and deposits[193] Capital Resources Company and Primis Bank maintain capital levels well above regulatory minimums, with Primis Bank categorized as 'well capitalized' - Primis Financial Corp. and Primis Bank are subject to various regulatory capital requirements and maintain capital amounts and ratios above minimums[194][195] - Primis Bank was categorized as 'well capitalized' under the regulatory framework for Prompt Corrective Action as of March 31, 2025[194] | Capital Ratio | Primis Financial Corp. (Mar 31, 2025) | Primis Bank (Mar 31, 2025) | | :--------------------------------------- | :------------------------------------ | :------------------------- | | Leverage ratio | 8.71% | 9.72% | | Common equity tier 1 capital ratio | 9.35% | 10.96% | | Tier 1 risk-based capital ratio | 9.66% | 10.96% | | Total risk-based capital ratio | 12.96% | 12.22% | - Primis Bank's capital conservation buffer was 4.22% as of March 31, 2025, exceeding the 2.50% minimum requirement[200] Item 3 – Quantitative and Qualitative Disclosures about Market Risk Addresses interest rate risk management through ALCO and simulation modeling, presenting sensitivity of EVE and NII to rate shifts - The company manages interest rate risk through its Asset-Liability Committee (ALCO) and quarterly interest sensitivity reviews using simulation modeling[202][203] | Interest Rate Shock (Basis Points) | EVE $ Change from Base (Mar 31, 2025, in thousands) | EVE % Change From Base (Mar 31, 2025) | | :--------------------------------- | :------------------------------------------ | :------------------------------------ | | Up 400 | $(143,548) | (26.93)% | | Up 300 | $(106,831) | (20.04)% | | Up 200 | $(72,051) | (13.52)% | | Up 100 | $(24,884) | (4.67)% | | Down 100 | $9,269 | 1.74% | | Down 200 | $(4,928) | (0.92)% | | Down 300 | $(33,826) | (6.35)% | | Down 400 | $(89,118) | (16.72)% | | Interest Rate Shock (Basis Points) | Adjusted NII $ Change From Base (Mar 31, 2025, in thousands) | | :--------------------------------- | :----------------------------------------------------------- | | Up 400 | $(2,166) | | Up 300 | $(1,880) | | Up 200 | $(1,604) | | Up 100 | $85 | | Down 100 | $(223) | | Down 200 | $(1,807) | | Down 300 | $(3,578) | | Down 400 | $(5,047) | Item 4 – Controls and Procedures Disclosure controls were ineffective due to ongoing material weakness remediation, yet financial statements fairly present Q1 2025 results - Disclosure controls and procedures were not effective as of March 31, 2025, due to continued remediation of previously identified material weaknesses in internal controls over financial reporting[210] - Despite the material weaknesses, management concluded that the condensed consolidated financial statements for Q1 2025 fairly present the company's financial condition, results of operations, and cash flows[211] - There were no material changes in internal controls over financial reporting during the three months ended March 31, 2025[212] PART II - OTHER INFORMATION Provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and exhibits Item 1 – Legal Proceedings Company is involved in ordinary course legal claims, but management expects no material adverse effect on financial condition or operations - No proceedings are pending or, to management's knowledge, threatened that represent a significant risk against Primis or Primis Bank as of March 31, 2025[213] Item 1A – Risk Factors Refers to previously disclosed risk factors in the 2024 Form 10-K, confirming no material changes during the current reporting period - There are no material changes during the period covered by this Report to the risk factors previously disclosed in the 2024 Form 10-K[215] Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the reporting period Item 3 – Defaults Upon Senior Securities This item is not applicable for the reporting period Item 4 – Mine Safety Disclosures This item is not applicable for the reporting period Item 5 – Other Information Confirms no directors or executive officers adopted, terminated, or modified trading arrangements during Q1 2025 - No directors or executive officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[220] Item 6 - Exhibits Lists all exhibits filed with the Form 10-Q, including certifications and financial statements in Inline XBRL format - Exhibits include Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[223] - The financial statements for the quarter ended March 31, 2025, are filed in Inline XBRL format[224]