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Primis Financial Corp. Provides Update on Delayed Filing Process
PrimisPrimis(US:FRST) Prnewswireยท2024-08-12 20:30

Core Viewpoint - Primis Financial Corp. has received non-objection from the SEC regarding its accounting conclusions for a consumer loan portfolio, allowing the company to proceed with delayed financial filings and restatements for previous periods [1][10]. Group 1: Accounting Methodology - The SEC's non-objection pertains to the accounting for loans and third-party agreements as separate units of account, following a "multi-unit" approach under U.S. GAAP [1][4]. - Primis initially accounted for the loan program as a single unit, aligning with the intended economics, but later attempted to adjust to a multi-unit approach, which introduced complexity and confusion in financial reporting [3][4]. - The company is pursuing a consultation with the SEC to revert to a single-unit accounting method, but the success and timing of this process remain uncertain [1][11]. Group 2: Financial Impact - The accounting changes are expected to result in a cumulative reduction of approximately $30 million in net income for prior periods and through the second quarter of 2024 [8][9]. - As of June 30, 2024, about 42% of the loan portfolio was in a promotional period, with approximately $15 million of customer interest deferred [9]. - The changes will affect various items on the income statement and balance sheet, including the deferral of interest income and the reversal of credit enhancement income previously recorded [6][7]. Group 3: Next Steps - The company is working with its independent auditor and external accounting advisors to implement the necessary accounting changes and complete its delayed filings, with expectations to make initial filings by the end of August 2024 [10][11]. - The company believes that the current accounting methodology does not provide the most useful picture of the loan program and is advocating for a single-unit accounting style with substantial disclosures [11]. Group 4: Company Overview - As of June 30, 2024, Primis Financial Corp. reported total assets of $4.0 billion, total loans of $3.3 billion, and total deposits of $3.3 billion [13]. - Primis Bank offers a range of financial services to individuals and small- to medium-sized businesses through 24 branches in Virginia and Maryland, as well as online and mobile services [13].