Primis Financial : Non-Reliance on Previously Issued Financial Report - Form 8-K

Item 4.02Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

Previously-Filed Quarterly Reports on Form 10-Q

On February 26, 2024, the Audit Committee of the Board of Directors of Primis Financial Corp. (the "Company") and the Company's management team concluded, following discussions with the Company's independent registered public accounting firm, FORVIS, LLP, that the Company's previously-issued unaudited interim consolidated financial statements as of and for the three months ended March 31, 2023, the three and six months ended June 30, 2023, and the three and nine months ended September 30, 2023 (the "Impacted Financial Statements") should no longer be relied upon.

The accounting matters underlying the Company's conclusion relate to transfers of loans by the Company's subsidiary, Primis Bank, of approximately $33.7 million (the "Transferred Loans") to other financial institutions over the first, second, and third quarters of 2023. As part of the Company's year-end reporting process in the first quarter of 2024, the Company determined that the transfer of the Transferred Loans from Primis Bank to other financial institutions did not qualify for sales treatment under U.S. GAAP and should have been accounted for as secured borrowings. The Company's management team then undertook extensive discussions with FORVIS, LLP regarding the effect of the mischaracterization of the transfers on the Company's reported financial results, and ultimately determined that the Impacted Financial Statements should be restated.

The Company intends to file amended Quarterly Reports on Form 10-Q as of and for the three months ended March 31, 2023, the three and six months ended June 30, 2023, and the three and nine months ended September 30, 2023 as soon as practicable.

The Company expects the restated condensed consolidated financial statements to disclose the following restated amounts for each period^1,3:

As of and for the Three Months Ended March 31, 2023 (In thousands, except per share data)		As Reported, As Revised2			As Restated
Total loans		$	3,041,533			$	3,056,674
Total assets			4,203,426				4,218,099
Other borrowings			99,728				114,708
Total funding sources			3,767,725				3,782,705
Total liabilities			3,804,921				3,819,954
Stockholders' equity			398,505				398,145
Interest income		$	47,114			$	47,395
Interest expense			18,749				18,857
Provision for credit losses			5,187				5,263
Noninterest income			11,532				11,105
Noninterest expense			27,404				27,411
Income tax expense			1,353				1,277
Net income		$	5,953			$	5,692
EPS - Basic		$	0.24			$	0.23
EPS - Diluted		$	0.24			$	0.23

¹ Total funding sources includes total deposits, which are the Company's primary source of funding, along with the secured borrowings, securities sold under agreements to repurchase - short term, FHLB advances, junior subordinated debt - long term, and senior subordinated notes - long-term.

² These balances were revised from the Company's original Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 to reflect adjustments related to the fraud losses, as described and restated in the Company's Current Report on Form 8-K filed on July 27, 2023.

³ Other borrowings includes secured borrowings, securities sold under agreements to repurchase - short term, FHLB advances, junior subordinated debt - long term, and senior subordinated notes - long-term.