Primis Financial Corp.

Previous wording

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 condensed consolidated financial statements, the footnotes thereto, and the other financial data included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three months ended March 31, 2025 are not necessarily indicative of results that may be attained for any other period. The emphasis of this discussion will be on the three months ended March 31, 2025 compared to the three months ended March 31, 2024 for the consolidated income statements. For the consolidated balance sheets, the emphasis of this discussion will be the balances as of March 31, 2025 compared to December 31, 2024. This discussion and analysis contains statements that may be considered “forward-looking statements” as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See the following section for additional information regarding forward-looking statements.

Current wording

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 in conjunction with the condensed consolidated financial statements, the footnotes thereto, and the other financial data included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of results that may be achieved for any other period. The emphasis of this discussion will be on the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 for the consolidated income statements. For the consolidated balance sheets, the emphasis of this discussion will be the balances as of June 30, 2025 compared to December 31, 2024. This discussion and analysis contains statements that may be considered “forward-looking statements” as defined in, and subject to the protections of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See the following section for additional information regarding forward-looking statements.

Previous wording

Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks,

Current wording

Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and are instead based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are inherently subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. The words “believe,” “may,” “forecast,” “should,” “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “predict,” “intend,” “continue,” “would,” “could,” “hope,” “might,” “assume,” “objective,” “seek,” “plan,” “strive” or similar words, or the negatives of these words, identify forward-looking statements.

Previous wording

and the differences between assumptions or bases and actual results can be material. When considering forward-looking statements, you should refer to the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our periodic and current reports filed with the SEC for specific factors that could cause our actual results to be different from those expressed or implied by our forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q (or an earlier date to the extent applicable). Except as required by applicable law, we undertake no obligation to update publicly these statements in light of new information or future events.

Current wording

Forward-looking statements are not guarantees of performance or results and should not be relied upon as representing management’s views as of any subsequent date. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe we have chosen these assumptions or bases in good faith and that they are reasonable. We caution you, however, that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material. When considering forward-looking statements, you should refer to the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our periodic and current reports filed with the SEC for specific factors that could cause our actual results to be different from those expressed or implied by our forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q (or an earlier date to the extent applicable). Except as required by applicable law, we undertake no obligation to publicly updated or revise these forward-looking statements in light of new information or future events.

Previous wording

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 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 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. PFH 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. PFH was a consolidated subsidiary of Primis until March 31, 2025, when it was deconsolidated in accordance with applicable accounting guidance.

Current wording

Primis Financial Corp. (NASDAQ: FRST) is the bank holding company for Primis 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 June 30, 2025, Primis Bank had 24 full-service branches in Virginia and Maryland and also provided 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 is headquartered in McLean, Virginia and has an administrative office in Glen Allen, Virginia and an operations center in Atlee, Virginia. PMC, a residential mortgage lender headquartered in Wilmington, North Carolina, is a consolidated subsidiary of Primis Bank. PFH 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 through the Panacea Financial Division of the Bank. PFH was a consolidated subsidiary of Primis until March 31, 2025, when it was deconsolidated in accordance with applicable accounting guidance.

Previous wording

While Primis Bank offers a wide range of commercial banking services, it focuses on making loans secured primarily by commercial real estate and other types of secured and unsecured commercial loans to small and medium-sized businesses in a number of industries, as well as loans to individuals for a variety of purposes. Primis Bank invests in real estate-related securities, including collateralized mortgage obligations and agency mortgage backed securities. Primis Bank’s principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings. Primis Bank offers a broad range of deposit products, including checking, savings, money market accounts and certificates of deposit. 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.

Current wording

While Primis Bank offers a wide range of commercial banking services, it focuses on making loans secured primarily by commercial real estate and other types of secured and unsecured commercial loans to small and medium-sized businesses in number of industries, as well as loans to individuals for a variety of purposes. Primis Bank invests in real estate-related securities, including collateralized mortgage obligations and agency mortgage-backed securities. Primis Bank’s principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings. Primis Bank offers a broad range of deposit products, including checking, savings, money market accounts and certificates of deposit. 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.

Previous wording

Our strategy centers on growing earning assets back to previous levels after the sale of our Life Premium Finance division and achieving higher production and profitability in our retail mortgage business. We continued to execute successfully during the first quarter of 2025 these strategies including the following:

Current wording

In 2024, we focused on organizing the core bank and lines of business that drive premium operating results. The second quarter of 2025 demonstrated progress in key areas that are expected to continue and build through the rest of the year and into 2026. Our strategy centers on growing earning assets back to previous levels after the sale of our Life Premium Finance division and achieving higher production and profitability in our retail mortgage business. We continued to execute successfully during the first half of 2025 on these strategies including the following:

Previous wording

Changes in the relationship between PFH and Primis during the first quarter of 2025 resulted in a determination to deconsolidate PFH from Primis as of March 31, 2025. The deconsolidation resulted in recognition of a $24.6 million gain for Primis during the three months ended March 31, 2025, as a result of recording the fair value of our retained interest in common stock of PFH. We will continue to assess the fair value of our common stock investment each reporting period and record the changes in fair value in our financial results for the respective period. The deconsolidation results in us no longer including PFH’s financial results in our financial results after March 31, 2025. PFH will continue to work with the Panacea Division of the Bank to originate loans, some of which the Bank will retain and others will be sold to investors and other financial institutions.

Current wording

Changes in the relationship between PFH and Primis during the first quarter of 2025 resulted in a determination to deconsolidate PFH from Primis as of March 31, 2025. The deconsolidation resulted in recognition of a $24.6 million gain for Primis during the six months ended June 30, 2025, as a result of recording the fair value of our retained interest in common stock of PFH. The deconsolidation resulted in us no longer including PFH’s financial results in our financial results after March 31, 2025. PFH continues to work with the Panacea Division of the Bank to originate loans, some of which the Bank will retain, and others will be sold to investors and other financial institutions.

Previous wording

Net income available to common shareholders for the three months ended March 31, 2025 totaled $22.6 million, or $0.92 basic and diluted earnings per share, compared to $2.5 million, or $0.10 basic and diluted earnings per share for the three months ended March 31, 2024. The results reflect an increase in noninterest income of $22.0 million, primarily due to the gain on deconsolidation of PFH, an increase in net interest income of $1.1 million, a decrease in provision for credit losses of $4.9 million, and an increase in noncontrolling interest of $1.9 million, partially offset by an increase in noninterest expense of $5.0 million. The increase in noncontrolling interests were related to losses attributable to other stockholders of PFH prior to de-consolidation as of March 31, 2025. Additional details of the remaining changes in net income will be discussed in the remaining sections of thisResults of Operations section.

Current wording

Three-Month Comparison. Net income available to common shareholders for the three months ended June 30, 2025 totaled $2.4 million, or $0.10 basic and diluted earnings per share, compared to $3.4 million, or $0.14 basic and diluted earnings per share for the three months ended June 30, 2024. The results reflect an increase in noninterest income of $7.2 million, primarily due to $7.5 million gain on sale of a portion of the Company’s ownership in PFH in the second quarter of 2025 and an increase in fair value of the remaining PFH common share investment, a $0.3 million increase in net interest income, and a $0.7 million decrease in our income tax provision. These are offset by an increase in provision for credit losses of $5.2 million, an increase in noninterest expense of $2.1 million driven by personnel expenses and data processing costs, and a decrease in noncontrolling interest income of $1.9 million. Additional details of the changes in net income will be discussed in the remaining sections of thisResults of Operations section.

Previous wording

Our operating results depend primarily on our net interest income, which is the difference between interest and dividend income on interest-earning assets such as loans and investments, and interest expense on interest-bearing liabilities such as deposits and borrowings. Net interest income was $26.4 million for the three months ended March 31, 2025, compared to $25.3 million for the three months ended March 31, 2024. Net interest income increased as a result of interest-bearing liability cost declines offsetting lower interest-earning asset income. Our net interest margin for the three months ended March 31, 2025 was 3.15%, compared to 2.84% for the three months ended March 31, 2024. Margin increased by 31 basis points primarily as a result of lower average interest-bearing liabilities coupled with a decline of 34 basis points paid on these liabilities, while yields on interest-earning assets increased by 4 basis points on $184 million of lower average interest-earning asset balances.

Current wording

Net interest income was $25.2 million for the three months ended June 30, 2025, compared to $24.9 million for the three months ended June 30, 2024. Net interest income increased as a result of interest-bearing liability costs declining more than the declines in interest-earning asset income. Our net interest margin for the three months ended June 30, 2025 was 2.86%, compared to 2.72% for the three months ended June 30, 2024. Margin increased by 14 basis points primarily as a result of lower average interest-earning asset balances and slightly higher net interest income when comparing the three months ended June 30, 2025 to the three months ended June 30, 2024.

Previous wording

Loans held for sale declined $172.7 million from December 31, 2024 primarily due to the sale of $50.7 million of LPF loans during the first quarter and the transfer back to Net loans (held for investment) of $101.7 million of Consumer Program loans as of March 31, 2025 after the decision to retain these for the foreseeable future or until maturity. The remaining declines were due to paydowns on the Consumer Program loans prior to transfer back to held for investment and sales of Primis Mortgage loans held at fair value, net of new originations.

Current wording

Loans held for sale declined $120.2 million from December 31, 2024 primarily due to the sale of $50.7 million of LPF loans, paydowns of Consumer Program loans HFS, and the transfer back to Net loans (HFI) of $101.7 million of Consumer Program loans in 2025 after the decision to retain these for the foreseeable future or until maturity. These declines were partially offset by increased originations of PMC loans held for sale at fair value.

Previous wording

Gross loans held for investment were $3.0 billion and $2.9 billion as of March 31, 2025 and December 31, 2024, respectively. The increase in loans was driven by the transfer back into the held for investment portfolio of Consumer Program loans along with growth of the mortgage warehouse and Panacea division loans, partially offset by loan paydowns concentrated in loans secured by real estate. As of March 31, 2025 and December 31, 2024, a majority of our loans were to customers located in Virginia and Maryland. We are not dependent on any single customer or group of customers whose insolvency would have a material adverse effect on our operations.

Current wording

Gross loans HFI were $3.1 billion and $2.9 billion as of June 30, 2025 and December 31, 2024, respectively. The increase in loans was driven by the transfer back from HFS into the consumer loans category in the HFI portfolio of Consumer Program loans along with growth of mortgage warehouse loans and Panacea Division commercial loans, both of which were the primary driver of the $202.9 million increase in commercial loans seen below. The growth was partially offset by loan paydowns during the six months ended June 30, 2025 of loans secured by real estate. As of June 30, 2025 and December 31, 2024, a majority of our loans were to customers located in Virginia and Maryland. We are not dependent on any single customer or group of customers whose insolvency would have a material adverse effect on our operations.

Previous wording

The composition of our loans held for investment portfolio consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Current wording

The composition of our loans HFI portfolio consisted of the following as of June 30, 2025 and December 31, 2024 ($ in thousands):

Previous wording

The following table sets forth the contractual maturity ranges of our loans held for investment portfolio and the amount of those loans with fixed and floating interest rates in each maturity range as of March 31, 2025 (in thousands):

Current wording

The following table sets forth the contractual maturity ranges of our loans HFI portfolio and the amount of those loans with fixed and floating interest rates in each maturity range as of June 30, 2025 ($ in thousands):

Previous wording

The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio as of March 31, 2025, which is only originated at fixed rates. The amounts do not include the $16.3 million of remaining fair market value adjustments related to the original $20.0 million write-down of portfolio when transferred to HFS as of December 31, 2024 (in thousands):

Current wording

The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio as of June 30, 2025, which is only originated at fixed rates. The amounts do not include the $11.0 million of remaining fair market value adjustments related to the original $20.0 million write-down of the portfolio when transferred to HFS as of December 31, 2024 ($ in thousands):

Previous wording

(1) Does not include $16.3 million of remaining fair market value adjustments related to the original $20.0 million write-down of portfolio when transferred to HFS as of December 31, 2024.

Current wording

(1) Does not include $11.0 million of remaining fair market value adjustments related to the original $20.0 million write-down of the portfolio when transferred to HFS as of December 31, 2024.

Previous wording

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. All of these promotional loans amortize over four years from the date they exit the promotional period if not prepaid before the end of the promotional period (in thousands):

Current wording

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. All these promotional loans generally amortize over four years from the date they exit the promotional period if not prepaid before the end of the promotional period ($ in thousands):

Previous wording

During the three months ended March 31, 2025, $21.1 million of loans either paid off during the no interest promo period or converted to amortizing at the end of the promo period.

Current wording

During the three and six months ended June 30, 2025, $5.2 million and $26.3 million, respectively, of Consumer Program loans either paid off during the no interest promotional period or converted to amortizing at the end of the promotional period.

Previous wording

Nonperforming assets declined during the first quarter of 2025, driven by a decrease in nonaccrual loans of $2.1 million. The decrease in nonaccrual loans was driven primarily by $2.5 million of paydowns during the quarter on one relationship that included two commercial loans in nonaccrual and was partially offset by several loans placed on nonaccrual during the quarter. We will generally place a loan on nonaccrual status when it becomes 90 days past due, with the exception of most consumer loans which are charged off at 120 days past due and Consumer Program loans which are charged off once they reach 90 days past due. Loans will also be placed on nonaccrual status in cases where we are

Current wording

We will generally place a loan on nonaccrual status when it becomes 90 days past due, with the exception of most consumer loans, which are charged off at 120 days past due and Consumer Program loans which are charged off once they reach 90 days past due. 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.

Previous wording

We originate Consumer Program loans using a third party that sources and subsequently manages the portfolio of loans. As of March 31, 2025, the principal balance outstanding was $147.8 million excluding a $16.3 million discount as a result of our prior decision to market a majority of the portfolio for sale, which has since been moved back to held for investment and will be run-off over time. 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 $7.5 million as of March 31, 2025 and represented 17% of our total allowance for credit losses. The allowance on this portfolio plus the discount results in a reduction of the outstanding principal balance of $23.8 million or 16%. As of March 31, 2025, 87% of the outstanding principal balance was current, resulting in 128% coverage by the aggregate allowance and discount of the non-current principal balances.

Current wording

As of June 30, 2025, the principal balance outstanding of Consumer Program loans was $124.1 million, excluding a $11.0 million discount as a result of our prior decision to market a majority of the portfolio for sale, which has since been moved back to HFI and will be run-off over time. These loans are accounted for like 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 plus the discount results in a reduction of the outstanding principal balance of $13.3 million or 10.7%. As of June 30, 2025, 93% of the outstanding principal balance was current, resulting in 150% coverage by the aggregate allowance and discount of the non-current principal balances.

Previous wording

Investment securities, available-for-sale and held-to-maturity, totaled $250.8 million as of March 31, 2025, an increase of 2.2% from $245.4 million as of December 31, 2024, primarily due to purchases of available-for-sale securities, partially offset by paydowns, maturities, and calls of the investments over the past three months. We recognized no credit impairment charges related to credit losses on our held-to-maturity investment securities during the three months ended March 31, 2025.

Current wording

Available-for-sale and held-to-maturity investment securities totaled $250.9 million as of June 30, 2025, an increase of 2.3% from $245.4 million as of December 31, 2024, primarily due to changes in unrealized gains or losses on available-for-sale securities and purchases of available-for-sale securities, partially offset by paydowns, maturities, and calls of the investments over the past six months. We recognized no credit impairment charges related to credit losses on our held-to-maturity investment securities during the three and six months ended June 30, 2025.

Previous wording

Debt investment securities that we have 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. 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. We intend to hold these securities until maturity or recovery of the value and do not anticipate realizing any losses on the investments.

Current wording

Debt investment securities that we have the positive intent and ability to hold to maturity are classified as held-to-maturity and are 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. 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. We intend to hold these securities until maturity or recovery of the value and do not anticipate realizing any losses on the investments.

Previous wording

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. We compete for deposits through our banking branches with competitive pricing, as well as nationally through advertising and online banking. We use deposits as a principal source of funding for our lending, purchasing of investment securities and for other business purposes.

Current wording

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. We compete for deposits through our banking branches with competitive pricing, as well as nationally through advertising and online banking. We use deposits as a principal source of funding for our lending, purchasing of investment securities and for other business purposes. We seek to fund increased loan volumes by growing core deposits, but, subject to internal policy limits on the amount of funding we may maintain, we may use funding sources to fund shortfalls, if any, or to provide additional liquidity. We use purchased brokered deposits as part of our overall liquidity management strategy on an as needed basis, and we purchase such brokered deposits through nationally recognized networks.

Previous wording

investment vehicles such as government and corporate securities). Our ability to attract and maintain deposits, and the effect of such retention on our cost of funds, has been, and will continue to be, significantly affected by the general economy and market rates of interest.

Current wording

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). Our ability to attract and maintain deposits, and the effect of such retention on our cost of funds, has been, and will continue to be, significantly affected by the general economy and market rates of interest.

Previous wording

Total deposits were $3.2 billion as of both March 31, 2025 and December 31, 2024. The mix of deposits changed during the three months, including an increase in lower-cost demand and NOW deposit balances of $9.2 million, offset by a decline in money market deposit account balances. 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. Deposits are net of excess amounts we sweep off balance sheet to manage liquidity. Deposits swept off balance sheet were $157 million as of March 31, 2025, compared to $137 million as of December 31, 2024.

Current wording

Total deposits increased by $0.1 billion to $3.3 billion as of June 30, 2025 from $3.2 billion at December 31, 2024. The mix of deposits changed during the six months ended June 30, 2025, including an increase in lower-cost demand, NOW deposit balances and savings balances of $159.8 million, offset by a decline in money market and time deposit account balances. Our deposits are diversified in type and by underlying customers and lack significant concentrations to any type of customer (i.e. commercial, consumer, government) or industry. Deposits are net of excess amounts we sweep off balance sheet to manage liquidity. Deposits swept off balance sheet were $36.9 million as of June 30, 2025, compared to $137 million as of December 31, 2024. The decline since year end was driven by the growth in our loan portfolio, which required us to retain more deposits on balance sheet. The Company has no wholesale funding and is 100% funded with customer deposits at June 30, 2025.

Previous wording

Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured deposits as calculated per regulatory guidance were $623.5 million, or 20% of total deposits, as of March 31, 2025.

Current wording

Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured deposits as calculated per regulatory guidance were $793.7 million, or 24% of total deposits at the Bank, as of June 30, 2025.

Previous wording

We use other borrowed funds to support our liquidity needs and to temporarily satisfy our funding needs from increased loan demand and for other shorter term purposes. We are a member of the FHLB and are authorized to obtain advances from the FHLB from time to time as needed. The FHLB has a credit program for members with different maturities and interest rates, which may be fixed or variable. We are required to collateralize our borrowings from the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. As of March 31, 2025 and December 31, 2024, we had no FHLB borrowings. As of March 31, 2025, we had $366.3 million of unused and available FHLB lines of credit as well as $550.5 million of available credit with the Federal Reserve Bank (FRB), secured by excess collateral pledged to the FHLB and FRB in the form of loans and investment securities.

Current wording

We use other borrowed funds to support our liquidity needs and to temporarily satisfy our funding needs from increased loan demand and for other shorter-term purposes. We are a member of the FHLB and are authorized to obtain advances from the FHLB from time to time, as needed. The FHLB has a credit program for members with different maturities and interest rates, which may be fixed or variable. We are required to collateralize our borrowings from the FHLB with purchases of FHLB stock and other collateral acceptable to the FHLB. As of June 30, 2025 and December 31, 2024, we had no FHLB borrowings. As of June 30, 2025, we had $354.7 million of unused and available FHLB lines of credit as well as $583.6 million of available credit with the FRB, secured by excess collateral pledged to the FHLB and FRB in the form of loans and investment securities.

Previous wording

Other borrowings can consist of federal funds purchased, secured borrowings due to failed loan sales, and securities sold under agreements to repurchase (“repo”) that mature within one year, which are secured transactions with customers. The balance in repo accounts at both March 31, 2025 and December 31, 2024 was $4.0 million and $3.9 million, respectively.

Current wording

Other borrowings can consist of federal funds purchased, secured borrowings due to failed loan sales, and repo transactions that mature within one year, which are secured transactions with customers. The balance in repo accounts at June 30, 2025 and December 31, 2024 was $4.4 million and $3.9 million, respectively.

Previous wording

We had secured borrowings of $16.7 million and $17.2 million as of March 31, 2025 and December 31, 2024, respectively, related to loan transfers to other financial institutions during 2023 and 2024 that did not meet the criteria to be treated as a sale under relevant accounting guidance. These borrowings reflect the cash received for transferring the loans to the other financial institution and any unamortized sale premium and are secured by approximately the same amount of loans held for investment that are recorded in our balance sheet. We retained the servicing of the loans that were transferred and accordingly receive principal and interest from the borrower as contractually required and transfer the interest to the other financial institution net of our contractually agreed upon servicing fee. 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. For additional information on secured borrowings refer to “Note 7 –Debt and Other Borrowings” in this Form 10-Q.

Current wording

We had secured borrowings of $16.4 million and $17.2 million as of June 30, 2025 and December 31, 2024, respectively, related to loan transfers to other financial institutions during 2023 and 2024 that did not meet the criteria to be treated as a sale under applicable accounting guidance. These borrowings reflect the cash received for transferring the loans to the other financial institution and any unamortized sale premium and are secured by approximately the same amount of loans held for investment that are recorded in our balance sheet. We retained the servicing of the loans that were transferred and accordingly receive principal and interest from the borrower as contractually required and transfer the interest to the other financial institution net of our contractually agreed upon servicing fee. 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. For additional information on secured borrowings refer to “Note 7 –Debt and Other Borrowings” in this Form 10-Q.

Previous wording

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. 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 “Note 7 –Debt and Other Borrowings”, and “Note 9 – Commitments and Contingencies.”

Current wording

The objective of our liquidity management is to ensure the ability to meet our financial obligations. These obligations include the payment of deposits on demand or at maturity, the repayment of borrowings at maturity and the ability to fund commitments and other new business opportunities. We obtain funding from a variety of sources, including customer deposit accounts, customer certificates of deposit and payments on our loans and investments. If our level of core deposits is 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 and institutional certificates of deposits. 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 “Note 7 –Debt and Other Borrowings”, and “Note 9 –Commitments and Contingencies.”

Previous wording

We prepare a cash flow forecast on a 30, 60 and 90 day basis along with a one and two year basis. 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 March 31, 2025, 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 March 31, 2025, Primis has no material commitments or long-term debt for capital expenditures.

Current wording

We prepare a cash flow forecast on a 30, 60 and 90 day basis along with a one and two year basis. 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 June 30, 2025, we were 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 June 30, 2025, we had no material commitments or long-term debt for capital expenditures.

Previous wording

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 March 31, 2025, that Primis meets all capital adequacy requirements to which it is subject.

Current wording

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 in the regulations). Management believes, as of June 30, 2025, that we meet all capital adequacy requirements to which we are subject.

Previous wording

2.5% “capital conservation buffer”, (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer, (iii) a minimum ratio of Total capital to risk-weighted assets of at least 8.0%, plus the capital conservation buffer and (iv) a minimum leverage ratio of 4.0%. Failure to meet minimum capital requirements may result in certain actions by regulators which could have a direct material effect on the consolidated financial statements.

Current wording

Bank regulatory agencies have approved regulatory capital guidelines (“Basel III”) aimed at strengthening existing capital requirements for banking organizations. The Basel III Capital Rules require Primis Financial Corp. and Primis Bank to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer”, (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer, (iii) a minimum ratio of Total capital to risk-weighted assets of at least 8.0%, plus the capital conservation buffer and (iv) a minimum leverage ratio of 4.0%. Failure to meet minimum capital requirements may result in certain actions by regulators which could have a direct material effect on the consolidated financial statements.

Previous wording

Primis Financial Corp. and Primis Bank remain well-capitalized under Basel III capital requirements. Primis Bank had a capital conservation buffer of 4.22% as of March 31, 2025, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions.

Current wording

Primis Financial Corp. and Primis Bank remain well-capitalized under Basel III capital requirements. Primis Bank had a capital conservation buffer of 3.62% and 4.04% as of June 30, 2025 and December 31, 2024, respectively, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions.

Previous wording

The critical accounting policies are discussed in MD&A in our Annual Report on Form 10-K for the year ended December 31, 2024. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1 - Organization and Significant Accounting Policies” in the Form 10-K for the year ended December 31, 2024. Disclosures regarding changes in our significant accounting policies since year end and the effects of new accounting pronouncements are included in “Note 1 - Accounting Policies” in this Form 10-Q. There have been no changes to the significant accounting policies during the first three months of 2025.

Current wording

The critical accounting policies are discussed in the MD&A in our Annual Report on Form 10-K for the year ended December 31, 2024. Significant accounting policies and changes in accounting principles and effects of new accounting pronouncements are discussed in “Note 1 -Organization and Significant Accounting Policies” in the Form 10-K for the year ended December 31, 2024. Disclosures regarding changes in our significant accounting policies since year end and the effects of new accounting pronouncements are included in “Note 1 -Accounting Policies” in this Form 10-Q. There have been no changes to the significant accounting policies during the first six months of 2025.