Primis Financial Corp.

1.ACCOUNTING POLICIES

Primis Financial Corp. (“Primis,” “we,” “us,” “our” or the “Company”) is the bank holding company for Primis Bank (“Primis Bank” or the “Bank”), a Virginia state-chartered bank which commenced operations on April 14, 2005. Primis Bank provides a range of financial services to individuals and small and medium-sized businesses.

As of March 31, 2025, Primis Bank hadtwenty-four full-service branches in Virginia and Maryland and also provided services to customers through certain online and mobile applications. 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 (“PMC”), a residential mortgage lender headquartered in Wilmington, North Carolina, is a consolidated subsidiary of Primis Bank. Panacea Financial Holdings, Inc. (“PFH”), headquartered in Little Rock, Arkansas, 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 was de-consolidated from the Company on March 31, 2025 as further discussed below in “PFH Deconsolidation”. The operating results of PFH are included in the Company’s consolidated operating results during the three months ended March 31, 2025.

The accounting policies and practices of Primis and its subsidiaries conform to U.S. generally accepted accounting principles (“U.S. GAAP”) and to general practice within the banking industry. A discussion of the Company’s material accounting policies are located in our 2024 Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

Principles of Consolidation

The consolidated financial statements include the accounts of Primis and its subsidiaries Primis Bank and PMC. PFH results of operations is included until its deconsolidation as of March 31, 2025 as further described below. Significant inter-company accounts and transactions have been eliminated in consolidation. Primis consolidates subsidiaries in which it holds, directly or indirectly, more than 50 percent of the voting rights or where it exercises control. Entities where Primis holds 20 to 50 percent of the voting rights, or has the ability to exercise significant influence, or both, are accounted for under the equity method. Primis owns EVB Statutory Trust I (the “Trust”) which is an unconsolidated subsidiary and the junior subordinated debt owed to the Trust is reported as a liability of Primis. Primis consolidated PFH through March 31, 2025 as further described below.

We determine whether we have a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”) under U.S. GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have all, or at least a majority of, the voting interest. As defined in U.S. GAAP, VIEs are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when an enterprise has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The enterprise with a controlling financial interest, known as the primary beneficiary, consolidates the VIE. The Company has investments in VIE’s for which we are not the primary beneficiary and, as such, are not included in our consolidated financial statements.

PFH Deconsolidation

On December 21, 2023, PFH completed a $24.5 million Series B financing round led by a global venture capital firm. As part of the financing round, Primis acquired approximately 19% of PFH’s common stock for an immaterial purchase price due to previous operating losses in the Bank’s Panacea Financial Division. The Company performed an analysis and

determined that PFH is a VIE because it lacks one or more of the characteristics of a voting interest entity. The Company’s analysis further determined that it has a controlling financial interest in PFH due to the substantial historical activities between PFH and the Bank’s Panacea Financial Division coupled with the limited activities of PFH outside of its relationship with Primis. Further, there are employees of Primis that have historically carried out substantially all of the activities of PFH. Accordingly, the Company determined it is the primary beneficiary of PFH and consolidated it as of December 31, 2023 and no circumstances resulted in a change in that determination as of December 31, 2024.

As of March 31, 2025, the three primary executives of PFH resigned from their positions as management-level employees of Primis’ Panacea Financial Division of the Bank. Additionally, Primis and PFH modified their partnership agreement as of March 31, 2025 to allow PFH more control over the type and amount of lending it can perform through the Bank. As a result of these changes in the relationship between the Company and PFH a re-assessment of PFH under the VIE accounting guidance was performed. The Company determined that PFH continues to be a VIE because it lacks one or more of the characteristics of a voting interest entity. However, as of March 31, 2025, the Company has determined based on the relationship changes described above that it was no longer the primary beneficiary of the VIE because it no longer has the power to direct the activities that most significantly impact the VIE’s economic performance. Accordingly, the Company deconsolidated PFH as of March 31, 2025.

Upon deconsolidation, the Company performed an analysis of its 1.7 million common share investment in PFH. The Company determined that a combination of its level of voting share ownership (19% of total outstanding voting shares) along with meaningful continued involvement in PFH’s lending and operating activities that the investment met the requirements to be accounted for in accordance with ASC 323,Investments - Equity Method and Joint Ventures. As of the time of deconsolidation and initial application of ASC 323, the Company decided to elect the fair value option (“FVO”) allowed under ASC 323 and will account for its investment in PFH common stock as of March 31, 2025 at fair value under ASC 825,Financial Instruments. The FVO is irrevocable and must be used in all future periods following election.

For the three months ended March 31, 2025, the Company recognized a gain from deconsolidation of PFH of $24.6 million which is recorded in the income statement in “Gain on deconsolidation of Panacea Financial Holdings, Inc.” within noninterest income. The gain resulted from recognition as of March 31, 2025 of the Company’s retained interest in PFH common stock of $21.2 million, at fair value, and the deconsolidation as of the same date of noncontrolling interest in PFH of $9.6 million and PFH’s net assets of $6.2 million. The Company engaged a third-party valuation specialist to perform a valuation of the Company’s PFH common shares as of March 31, 2025. The valuation included an assessment of the value of PFH primarily using an income approach leveraging a discounted cash flow technique. Key inputs and assumptions in the valuation included projected financial growth of PFH driven by future loan growth assumptions, growth in new services offerings of PFH, and cost savings from fundings provided by customer growth. Following deconsolidation, the Company will continue to originate loans for PFH through its Panacea Division of the Bank, retaining some of the originated loans and selling the remaining. Any loans retained by the Company will be included within Net Loans in the balance sheet and will be included in the Company’s determination of future expected credit losses, which is the Company’s primary exposure to losses as a result of its continued involvement with PFH. For any originated loans that are intended to be sold, the Company will also include these on its balance sheet until the time of sale but through an agreement with PFH any exposure to a decline in value prior to sale will be reimbursed to the Company by PFH. The Company will also continue, through the Division, to provide loan origination support to PFH and servicing of loans retained by the Division.

Following deconsolidation, the Company determined that any transactions between the Company and PFH would be related party transactions under relevant accounting guidance. The primary transactions between the Company and PFH relate to quarterly payments between the parties driven by financial performance of loans PFH originates in the Division of the Bank. As of March 31, 2025, the Company had a receivable of $3.4 million included within other assets in the balance sheet related to this quarterly payment due from PFH. As of March 31, 2025, the Company did not hold any assets on its balance sheet related to PFH which could be used by PFH to settle their obligations. The Company does not have an obligation to provide any future monetary support to PFH. The maximum exposure to loss as of March 31, 2025 as a result

of continued involvement with PFH is the common stock investment of $21.2 million, the receivable of $3.4 million, and any potential credit losses on loans originated in the division of the Bank as discussed above.

Disposition of the Life Premium Finance Division

On October 24, 2024, the Company entered into a purchase and assumption agreement with EverBank, N.A. (“EverBank”) for sale of the Company’s Life Premium Finance division (“LPF”). EverBank acquired LPF from the Company, except for a subset of mostly fixed rate and rate-capped loans that were retained by the Bank. All of the LPF operations, including its employees, were assumed by EverBank following the close of the transaction, which took place in two parts. EverBank acquired approximately$370 million of loans from the division at a$6.0 million premium at the first close on October 31, 2024. Between the first and second closing, which happened on January 31, 2025, EverBank purchased loans generated by the division in ordinary course at par. The Bank provided interim servicing from the first closing until the transition of the business at the final closing when EverBank began servicing the purchased loans and serviced the Bank’s retained portfolio for the duration of the portfolio. From the first closing through December 31, 2024, the Bank sold approximately$400 million of loans and related accrued interest and recorded a pre-tax gain of$4.7 million, net of advisory and legal fees. As of December 31, 2024, the Bank had an additional$50.7 million of loans to be sold to EverBank which were recorded in loans held for sale at lower of cost or market. The Bank subsequently sold approximately$64 million of additional loans at par to EverBank (inclusive of the loans in held for sale at year end) from January 1, 2025 through the second close on January 31, 2025.

Operating Segments

The Company, through its Bank subsidiary, provides a broad range of financial services. While the Company’s chief operating decision maker monitors the revenue streams of the various financial products and services, operations are managed and financial performance is evaluated on an organization-wide basis. Management has determined that the Company hastwo reportable operating segments: Primis Mortgage and Primis Bank, as discussed in Note 11 – Segment Information.

Basis of Presentation

The unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with U.S. GAAP for interim financial information and instructions for Form 10-Q and follow general practice within the banking industry. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the 2024 Form 10-K.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Estimates that are particularly susceptible to change in the near term include: the determination of the allowance for credit losses, the fair value of investment securities, the credit impairment of investment securities, the mortgage banking derivatives, interest rate swap derivatives, Consumer Program derivative, the valuation of goodwill, and deferred tax assets. Management monitors and continually reassess these at each reporting period.

Interest Rate Swaps

The Company is subject to interest rate risk exposure in the normal course of business through its core lending operations. Primarily to help mitigate interest rate risk associated with its loan portfolio, the Company entered into interest

rate swaps in May and August 2023 with a large U.S. financial institution as the counterparty. Interest rate swaps are contractual agreements whereby one party pays a floating interest rate on a notional principal amount and receives a fixed-rate payment on the same notional principal, or vice versa, for a fixed period of time. Interest rate swaps change in value with movements in benchmark interest rates, such as Prime or the Secured Overnight Financing Rate (“SOFR”). Interest rate swaps subject the Company to market risk associated with changes in interest rates, changes in interest rate volatility, as well as the credit risk that the counterparty will fail to perform. The Company’s interest rate swaps are pay-fixed and receive-floating whereby the Company receives a variable rate of interest based on SOFR.

As of March 31, 2025, the gross amounts of interest rate swap derivative assets and liabilities were $0.6 million and $0.4 million, respectively, and are recorded net in other assets in the consolidated balance sheets. As of December 31, 2024 the gross amounts of interest rate swap derivative assets and liabilities were $1.1 million and $0.3 million, respectively, and are recorded net in other assets in the consolidated balance sheets.

The following table represents the carrying value of the portfolio layer method hedged assets and the cumulative fair value hedging adjustments included in the carrying value of the hedged assets as of March 31, 2025 and December 31, 2024:

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. The ASU also eliminates certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures. This ASU is effective for the Company’s annual disclosures beginning for the year ended December 31, 2025. The Company is currently evaluating the impact of this ASU to the annual financial statement disclosures in its Form 10-K for the year ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires more disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses, but does not change the requirements for the presentation of expenses on the face of the income statement. The amendments in this standard will be effective for the Company on January 1, 2027, and is required to be applied prospectively, with early adoption permitted. The Company does not believe this standard will have a material impact on its consolidated financial statements.

2.INVESTMENT SECURITIES

The amortized cost and fair value of available-for-sale investment securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows (in thousands):

The amortized cost, gross unrecognized gains and losses, allowance for credit losses and fair value of investment securities held-to-maturity were as follows (in thousands):

Available-for-sale investment securities of $8.6 million were purchased during the three months ended March 31, 2025 and $8.8 million were purchased during the three months ended March 31, 2024, respectively. No held-to-maturity investments were purchased during the three months ended March 31, 2025 and 2024. No investment securities were sold during the three months ended March 31, 2025 and 2024.

The amortized cost and fair value of available-for-sale and held-to-maturity investment securities as of March 31, 2025, by contractual maturity, were as follows (in thousands). Investment securities not due at a single maturity date are shown separately.

Investment securities with a carrying amount of approximately $138.8 million and $141.1 million at March 31, 2025 and December 31, 2024, respectively, were pledged to secure public deposits, certain other deposits, a line of credit for advances from the FHLB of Atlanta, and repurchase agreements.

Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Treasury and residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities and (iv) internal forecasts. As of March 31, 2025, Primis did not have a material allowance for credit losses on held-to-maturity securities.

As of both March 31, 2025 and December 31, 2024, there were 155 investment securities available-for-sale that were in an unrealized loss position. The unrealized losses related to investment securities available-for-sale as of March 31, 2025 and December 31, 2024, relate to changes in interest rates relative to when the investment securities were purchased, and do not indicate credit-related impairment. Primis performs quantitative analysis and if needed, a qualitative analysis in this determination. As a result of the Company’s analysis, none of the securities were deemed to require an allowance

for credit losses. Primis has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses.

The following tables present information regarding investment securities available-for-sale and held-to-maturity in a continuous unrealized loss position as of March 31, 2025 and December 31, 2024 by duration of time in a loss position (in thousands):

**3.**LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table summarizes the composition of our loan portfolio as of March 31, 2025 and December 31, 2024 (in thousands):

Loans held for sale, at the lower of cost or market

As of December 31, 2024, $113.3 million of Consumer Program loans and $50.5 million of life premium finance loans were included in loans held for sale, at the lower of cost or market, based on the Company’s decision to sell the loans. The life premium finance loans were sold during the three months ended March 31, 2025. At March 31, 2025, the Company determined it would no longer sell the Consumer Program loans and has the intent and ability to hold these loans for the foreseeable future as it intends to run-off the portfolio and therefore transferred the loans back to the consumer loans category within loans held for investment at their amortized cost of $101.6 million as of that date.

Consumer Program Loans

The Company has $131.5 million and $152.1 million of principal balance of loans outstanding in the Consumer Program as of March 31, 2025 and December 31, 2024, respectively, or 4% and 5%, respectively of our total gross loan portfolio as of each date. Loans in the Consumer Program are included within the consumer loans category disclosures in this footnote as of March 31, 2025 and $113.3 million is included in loans held for sale, at the lower of cost or market, and $39.0 million in the consumer loans category in loans held for investment as of December 31, 2024. As of March 31, 2025,12% of the loans were in a promotional period requiring no payment of interest on their loans with 91% of these promotional loan periods ending in the second quarter of 2025 through the first quarter of 2026.

Accrued Interest Receivable

Accrued interest receivable on loans totaled $18.8 million and $16.5 million as of March 31, 2025 and December 31, 2024, respectively, and is included in other assets in the consolidated balance sheets.

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, we consider the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to our collateral position. Regulatory provisions would typically require the placement of a loan on nonaccrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.

The following tables present the aging of the recorded investment in past due loans by class of loans held for investment as of March 31, 2025 and December 31, 2024 (in thousands):

The amortized cost, by class, of loans and leases on nonaccrual status as of March 31, 2025 and December 31, 2024, were as follows (in thousands):

There were $1.7 million of Paycheck Protection Program (“PPP”) loans greater than 90 days past due and still accruing as of both March 31, 2025 and December 31, 2024, respectively.

The following table presents nonaccrual loans as of March 31, 2025 by class and year of origination (in thousands):

Interest received on nonaccrual loans was immaterial for both the three months ended March 31, 2025 and 2024.

Modifications Provided to Borrowers Experiencing Financial Difficulty

The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future. Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures. Concessions may include the reduction of an interest rate at a rate lower than current market rates for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers.

The assessments of whether a borrower is experiencing financial difficulty at the time a concession has been granted is subjective in nature and management’s judgment is required when determining whether the concession results in a modification that is accounted for as a new loan or a continuation of the existing loan under U.S. GAAP.

Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, loans modified as a result of borrowers experiencing financial difficulty are typically modified through reductions in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies certain loans by providing principal forgiveness. When principal forgiveness is provided, the amortized cost basis of the

loan is written off against the allowance. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

If it is determined that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. At that time, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

The following provides a summary of loans modified to borrowers experiencing financial difficulty as of March 31, 2025, excluding Consumer Program loans ($ in thousands):

All financial difficulty modifications originated prior to the three months ended March 31, 2025, have been paid as agreed in accordance with the modified terms, with the exception oftwo loans still in modification andone loan returned to contractual payments.

Two loans with a total$55 thousand in amortized cost were modified to borrowers experiencing financial difficulty, representing 0.02% of the other consumer loans segment. One of these two, with$25 thousand in amortized cost was modified to defer payments forthree months, followed bysix months of reduced payments, resuming original contractual payments July 2, 2025. Total contractual payments, prior to this modification, for three months ended March 31, 2025, would have been$1,632. The other modification, totaling$30 thousand, was granted four months of deferred payments, followed bynine months of reduced payments reamortizing the loan from afive toseven-year term. Total contractual payments, prior to this modification, for three months ended March 31, 2025, would have been$1,173.

Two loans, totaling$126 thousand, representing 0.09% of total revolving 1-4 family and 0.01% of total secured by first lien loans were modified to one borrower experiencing financial difficulty. Payments for both loans were deferred, first of thetwo with$57 thousand, in amortized cost (and$987 in originally scheduled payments for the first quarter 2025) for three months and the second with$68 thousand in amortized cost (and$2,112 in originally scheduled payments for the first quarter 2025) forsix months, with accrued principal and interest added to the back of each note extending their maturity dates accordingly. One loan modification, secured by first liens, with a total$108 thousand in amortized cost and representing 0.02% of this segment, has hadthree 30–59 day payment delinquencies in the last three months. No payment modifications were made to this first lien loan which retained its original$1,262 monthly payment and 6.68% interest rate for aone-year period. If the interest rate for this loan had been adjusted as scheduled to 7.98%, total contractual payments for the three months ended March 31, 2025, would have totaled$4,572 versus the$3,442 paid. The other modification of$31 thousand in amortized cost resides in revolving 1-4 family and represents 0.01% of the loan pool. This loan was modified from its original 8.5% rate to a fixed 6% for a 5-year term and total contractual payments, prior to modification, for three months ended March 31, 2025, would have been$714.

Two existing financial difficulty modifications with$1.21 million in amortized cost represent 0.23% of the commercial and industrial category. One of thesetwo, with$38 thousand in amortized cost, was modified to$627 in principal payments repaid over 83 months compared to its original$845 payments over 60 months term. The other modification, totaling$12 million was modified under a forbearance agreement, to monthly payments of$8,000 through its June 2026 maturity. Total

contractual payments, prior to this modification, for the three months ended March 31, 2025, would have been$57 thousand.

During the three months ended March 31, 2025, two loans totaling$28.7 million in amortized cost, in the non-owner-occupied category and representing 4.8% of total non-owner occupied loans, remain modified to borrowers experiencing financial difficulty. The first of thetwo with$393 thousand in amortized cost was extended at interest only for 18 months This loan was to have been paid in full at its original March 2024 maturity. The second loan modified with$28.4 million in amortized cost was restructured to allow for the extension of its interest only period for an additional 24 months. Prior to this restructure total principal and interest payments, for the three months ended March 31,2025, would have been$16 million compared to the total$263 thousand in interest only payments received.

The following table depicts the amortized cost basis as of March 31, 2025, of the performance of loans that have been modified to borrowers experiencing financial difficulty in the last 12 months and returned to contractual payments ($ in thousands):

Consumer Program modifications

During the three months ended March 31, 2025, the Company began offering modifications to Consumer Program borrowers in an attempt to enhance collections of delinquent loans and mitigate charge-offs. The primary type of modifications were settlements of amounts owed for less than the current outstanding principal balance and term modifications to extend maturity dates. In certain cases, a partial loan settlement occurred with the original maturity extended for the remaining balance that was not settled.

Consumer Program modifications are within the consumer loans category and included 667 loans modified with an amortized cost of $5.7 million during the three months ended March 31, 2025. During the three months ended March 31, 2025,145 loans with an amortized cost of $1.8 million were provided only a term extension. During the three months ended March 31, 2025,50 loans with an amortized cost of $0.5 million were provided a modification that allowed partial settlement of principal owed of $0.1 million with the remaining principal maturity date extended. The average term modification provided on the aggregate population of loans that received a term extension was 3.3 years and if these terms modifications had not been provided the balance of principal and interest due during the three months ended March 31, 2025 would have been $0.3 million, instead of $0.1 million actually collected during the period on these modified loans. During the three months ended March 31, 2025,472 loans with an amortized cost of $3.4 million were provided a modification that allowed for partial or full settlement of their principal balance outstanding. All loans that were provided modifications during the three months ended March 31, 2025 were performing under their modified terms as of March 31, 2025.

Credit Quality Indicators

Through its system of internal controls, Primis evaluates and segments loan portfolio credit quality using regulatory definitions for Special Mention, Substandard and Doubtful. Special Mention loans are considered to be criticized. Substandard and Doubtful loans are considered to be classified.

Special Mention loans are loans that have a potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position.

Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable or improbable. Primis hadno loans classified as Doubtful as of March 31, 2025 or December 31, 2024.

In monitoring credit quality trends in the context of assessing the appropriate level of the allowance for credit losses on loans, we monitor portfolio credit quality by the weighted-average risk grade of each class of loan.

The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of March 31, 2025 (in thousands):

The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of December 31, 2024 (in thousands):