Primis Financial Corp. Restates Financials Due to Fraud Losses

TL;DR

Primis Financial Corp. restates Q1 2023 financials due to fraud losses discovered in June 2023.

AI Summary

Primis Financial Corp. is filing an amendment (10-Q/A) to its quarterly report for the period ending March 31, 2023. This amendment restates the financial statements for the quarters ended March 31, 2023, and 2022, to reflect the recognition of fraud losses discovered in June 2023, impacting opening equity in the earliest period presented.

Why It Matters

This restatement indicates a significant internal control issue and potential financial impact from fraud, requiring investors to re-evaluate the company's financial health.

Risk Assessment

Risk Level: high — The restatement of financial statements due to fraud losses suggests material weaknesses in internal controls and potential financial instability.

Key Numbers

• Q1 2023 — Restated Quarter (Financial statements for this period are being restated due to fraud losses.)
• 2022 — Restated Year (Financial statements for this period are also being restated.)

Key Players & Entities

• Primis Financial Corp. (company) — Filer of the 10-Q/A
• March 31, 2023 (date) — Quarter end date for restated financials
• June 2023 (date) — Date employee loan fraud was discovered
• May 10, 2023 (date) — Original filing date of the Form 10-Q

FAQ

Key Financial Figures

• $0.01 — ch registered: Common Stock, par value $0.01 per share FRST NASDAQ Global Market

Filing Documents

• frst-20230331x10qa.htm (10-Q/A) — 7013KB
• frst-20230331xex31d1.htm (EX-31.1) — 14KB
• frst-20230331xex31d2.htm (EX-31.2) — 12KB
• frst-20230331xex32d1.htm (EX-32.1) — 12KB
• 0001558370-24-013692.txt ( ) — 32003KB
• frst-20230331.xsd (EX-101.SCH) — 73KB
• frst-20230331_cal.xml (EX-101.CAL) — 95KB
• frst-20230331_def.xml (EX-101.DEF) — 481KB
• frst-20230331_lab.xml (EX-101.LAB) — 690KB
• frst-20230331_pre.xml (EX-101.PRE) — 681KB
• frst-20230331x10qa_htm.xml (XML) — 10347KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

- Financial Statements (Revised and Restated)

Item 1 - Financial Statements (Revised and Restated) Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (Revised and Restated) 2 Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the three months ended March 31, 2023 and 2022 (Revised and Restated) 3 Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2023 and 2022 (Revised and Restated) 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (Revised and Restated) 5 Notes to Condensed Unaudited Consolidated Financial Statements (Revised and Restated) 6

- Management's Discussion and Analysis of Financial Condition and Results of Operations (Revised and Restated)

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (Revised and Restated) 38

– Quantitative and Qualitative Disclosures about Market Risk

Item 3 – Quantitative and Qualitative Disclosures about Market Risk 54

– Controls and Procedures (Restated)

Item 4 – Controls and Procedures (Restated) 56

- OTHER INFORMATION

PART II - OTHER INFORMATION

– Legal Proceedings

Item 1 – Legal Proceedings 57

– Risk Factors (Restated)

Item 1A – Risk Factors (Restated) 57

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 59

– Defaults Upon Senior Securities

Item 3 – Defaults Upon Senior Securities 59

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 59

– Other Information

Item 5 – Other Information 59

- Exhibits ( Restated )

Item 6 - Exhibits ( Restated ) 60 Signatures (Restated) 61 Table of Contents PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED BALANCE SHEETS ( dollars in thousands, except per share amounts) March 31, December 31, 2023 2022 ASSETS (unaudited) (Revised and Cash and cash equivalents: Restated) Cash and due from financial institutions $ 7,078 $ 6,868 Interest-bearing deposits in other financial institutions 600,047 70,991 Total cash and cash equivalents 607,125 77,859 Securities available-for-sale, at fair value 231,468 236,315 Securities held-to-maturity, at amortized cost (fair value of $ 12,230 and $ 12,449 , respectively) 13,115 13,520 Loans held for sale, at fair value 42,011 27,626 Loans held for investment, collateralizing secured borrowings 15,141 — Loans held for investment 3,040,664 2,946,637 Less: allowance for credit losses ( 35,803 ) ( 34,544 ) Net loans 3,020,002 2,912,093 Stock in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) 12,083 25,815 Bank premises and equipment, net 25,136 25,257 Assets held for sale 3,115 3,115 Operating lease right-of-use assets 9,352 5,335 Goodwill 104,609 104,609 Intangible assets, net 2,930 3,254 Bank-owned life insurance 67,591 67,201 Deferred tax assets, net 21,015 19,874 Consumer Program derivative asset 10,041 — Other assets 49,389 44,791 Total assets $ 4,218,982 $ 3,566,664 LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing demand deposits $ 497,555 $ 582,572 Interest-bearing deposits: NOW accounts 835,348 617,687 Money market accounts 865,115 811,365 Savings accounts 971,512 245,786 Time deposits 498,564 465,057 Total interest-bearing deposits 3,170,539 2,139,895 Total deposits 3,668,094 2,722,467 Securities sold under agreements to repurchase - short term 4,346 6,445 Secured borrowings 15,038 — FHLB advances —

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View this 10-Q/A filing on SEC EDGAR