Primis Financial Corp. 10-Q/A

Table of Contents ​ ​ ​ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ​ FORM 10-Q/A (Amendment No.1) ​ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ For the Quarterly Period Ended June 30, 202 3 ​ Commission File No. 001-33037 ​ PRIMIS FINANCIAL CORP. (Exact name of registrant as specified in its charter) ​ Virginia 20-1417448 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) ​ ​ 1676 International Drive, Suite 900 McLean , Virginia 22102 (Address of principal executive offices) (zip code) ​ ( 703 ) 893-7400 (Registrant’s telephone number, including area code) ​ Securities registered pursuant to Section 12(b) of the Act: ​ Title of each class: Trading symbol Name of each exchange on which registered: Common Stock, par value $0.01 per share FRST NASDAQ Global Market ​ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ​ Yes ☐ No ☒ Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ​ Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b–2 of the Exchange Act: ​ ​ ​ ​ Large accelerated filer ☐ Accelerated filer ☒ Smaller reporting company ☐ ​ ​ ​ Non-accelerated filer ☐ Emerging growth company ☐ ​ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ ​ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ ​ As of October 25, 2024, there were 24,722,734 shares of common stock, $0.01 par value, outstanding. ​ ​ Table of Contents EXPLANATORY NOTE Primis Financial Corp (“we”, “us”, “our”, the “Company” or “Primis”), is filing this Amendment No. 1 to Form 10-Q (this “Amendment” or “Form 10-Q/A ”) to amend and restate certain items in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 originally filed with the Securities and Exchange Commission (the “SEC”) on August 9, 2023 (the “Original 10-Q”, and, as amended by this Amendment, the “Quarterly Report”) to reflect the restatement of the Company’s financial statements as of and for the quarter ended June 30, 2023 and 2022 contained in the Original 10-Q (the “Restatement”). This Form 10-Q/A is also being updated to reflect the recognition of fraud losses in the appropriate periods, including opening equity in the earliest period presented, for the employee loan fraud discovered by the Company in June of 2023 as initially described in the Company’s Form 8-K filed with the SEC on July 27, 2023. Background of the Restatement As previously reported in the Company’s Form 8-K filed on March 1, 2024, as part of the Company’s year-end reporting process in the first quarter of 2024, the Company determined that the transfer of certain loans from Primis Bank to other financial institutions in the first and second quarter of 2023 did not qualify for sales treatment under Generally Accepted Accounting Principles (“ U.S. GAAP”) and should have been accounted for as secured borrowings. Also, as previously reported in the Company’s Form 8-K filed on August 12, 2024, the Company completed its initial consultation process with the Office of the Chief Accountant of the SEC related to the accounting for its Consumer Program loan portfolio. The Company received a non-objection from the SEC to the Company’s accounting conclusions required to correct the prior accounting for the Consumer Program. As a result, in consultation with the Company’s Audit Committee to its Board of Directors and its independent registered public accounting firm, Forvis Mazars, LLP, management determined that the corrections to the Consumer Program accounting was material to the financial statements as of and for the three and six months ended June 30, 2023, which are also being restated in this Form 10-Q/A. The correction to the Consumer Program accounting in the financial statements as of and for the three and six months ended June 30, 2022 was not deemed to be material, but for comparison purposes to the current period in this Form 10-Q/A the Company has revised the prior period amounts as applicable. For a more detailed description of the financial impact of the Restatement, see the “ Restatement of Previously Issued Condensed Consolidated Financial Statements” section of Note 1- Accounting Policies, to the unaudited condensed consolidated financial statements contained in this Amendment and “Restatement of Previously Issued Financial Statements” under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in this Amendment. Items Amended in the Form 10-Q/A The following items are amended and restated in their entirety in this Amendment: (i) Part I, Item 1, “Financial Statements”; Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and Item 4, “Controls and Procedures”; and (ii) Part II, Item 6, “Exhibits”. Pursuant to Rule 12b-15 promulgated under the Securities Act of 1934, as amended (the “Exchange Act”), this Amendment also contains new currently dated certifications by the Company's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002. Except as described above, this Amendment does not amend, update or change any other disclosures in the Original 10-Q. In addition, the information contained in this Amendment does not reflect events occurring after the filing of the Original 10-Q and does not modify or update the disclosures therein. Among other things, forward-looking statements made in the Original 10-Q have not been revised to reflect events, results or developments that occurred or facts that became known to the Company after the date of the Original 10-Q, other than with respect to the Restatement, and such forward-looking statements should be read in conjunction with the Company's filings with the SEC, including those subsequent to the filing of the Original 10-Q. Unless otherwise stated or unless the context otherwise requires, defined terms used throughout this Amendment have the meanings ascribed to them in the Original 10-Q. ​ Table of Contents ​ PRIMIS FINANCIAL CORP . FORM 10-Q/A June 30, 2023 TABLE OF CONTENTS PAGE PART I - FINANCIAL INFORMATION ​ ​ ​ ​ ​ Item 1 - Financial Statements (Revised and Restated) ​ ​ ​ ​ ​ Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (R evised and Restated) ​ 2 Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022 (R evised and Restated) ​ 3 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 (R evised and Restated) ​ 4 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (R evised and Restated) ​ 6 Notes to Unaudited Condensed Consolidated Financial Statements (R evised and Restated) ​ 7 ​ ​ ​ Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations (R evised and Restated) ​ 42 ​ ​ ​ Item 3 – Quantitative and Qualitative Disclosures about Market Risk (Revised and restated) ​ 60 ​ ​ ​ Item 4 – Controls and Procedures (Restated) ​ 61 ​ ​ ​ PART II - OTHER INFORMATION ​ ​ ​ ​ ​ Item 1 – Legal Proceedings ​ 63 ​ ​ ​ Item 1A – Risk Factors (Restated) ​ 63 ​ ​ ​ Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds ​ 64 ​ ​ ​ Item 3 – Defaults Upon Senior Securities ​ 64 ​ ​ ​ Item 4 – Mine Safety Disclosures ​ 64 ​ ​ ​ Item 5 – Other Information ​ 64 ​ ​ ​ Item 6 - Exhibits (Restated) ​ 64 ​ ​ ​ Signatures ​ 66 ​ ​ ​ ​ ​ ​ ​ Table of Contents PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED BALANCE SHEETS ( dollars in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2023 ​ 2022 ASSETS ​ (unaudited) ​ ​ Cash and cash equivalents: (Revised and Restated) ​ Cash and due from financial institutions ​ $ 6,720 $ 6,868 Interest-bearing deposits in other financial institutions ​ 94,148 70,991 Total cash and cash equivalents ​ 100,868 77,859 ​ ​ ​ ​ ​ ​ ​ Securities available-for-sale, at fair value (amortized cost of $ 256,101 and $ 269,036 , respectively) ​ 223,087 236,315 ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity, at amortized cost (fair value of $ 11,369 and $ 12,449 , respectively) ​ 12,378 13,520 ​ ​ ​ ​ ​ ​ ​ Loans held for sale, at fair value ​ ​ 57,704 ​ ​ 27,626 ​ ​ ​ ​ ​ ​ ​ Loans held for investment, collateralizing secured borrowings ​ ​ 20,714 ​ ​ — Loans held for investment ​ 3,172,254 2,946,637 Less: allowance for credit losses ​ ( 38,541 ) ( 34,544 ) Net loans ​ 3,154,427 2,912,093 ​ ​ ​ ​ ​ ​ ​ Stock in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) ​ 12,083 25,815 Bank premises and equipment, net ​ 25,298 25,257 Assets held for sale ​ ​ 3,115 ​ ​ 3,115 Operating lease right-of-use assets ​ ​ 10,707 ​ ​ 5,335 Goodwill ​ 104,609 104,609 Intangible assets, net ​ 2,606 3,254 Bank-owned life insurance ​ 67,985 67,201 Deferred tax assets, net ​ 22,639 19,874 Consumer Program derivative ​ ​ 10,627 ​ ​ — Other assets ​ 58,079 44,791 Total assets ​ $ 3,866,212 $ 3,566,664 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ Noninterest-bearing demand deposits ​ $ 480,832 $ 582,572 Interest-bearing deposits: ​ ​ ​ NOW accounts ​ 817,725 617,687 Money market accounts ​ 850,359 811,365 Savings accounts ​ 696,750 245,786 Time deposits ​ 471,330 465,057 Total interest-bearing deposits ​ 2,836,164 2,139,895 Total deposits ​ 3,316,996 2,722,467 ​ ​ ​ ​ ​ ​ ​ Securities sold under agreements to repurchase - short term ​ 3,921 6,445 FHLB advances ​ — 325,000 Secured borrowings ​ ​ 20,595 ​ ​ — Junior subordinated debt - long term ​ 9,806 9,781 Senior subordinated notes - long term ​ 85,647 85,531 Operating lease liabilities ​ ​ 11,546 ​ ​ 5,767 Consumer Program derivative ​ ​ — ​ ​ 473 Other liabilities ​ 27,279 22,232 Total liabilities ​ 3,475,790 3,177,696 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (See Note 9) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: ​ Preferred stock, $ 0.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding ​ — — Common stock, $ 0.01 par value. Authorized 45,000,000 shares; 24,690,064 and 24,680,097 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively ​ 246 246 Additional paid in capital ​ 312,976 312,722 Retained earnings ​ 103,281 101,850 Accumulated other comprehensive loss ​ ( 26,081 ) ( 25,850 ) Total stockholders' equity ​ 390,422 388,968 Total liabilities and stockholders' equity ​ $ 3,866,212 $ 3,566,664 ​ See accompanying notes to unaudited condensed consolidated financial statements . 2 Table of Contents ​ PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, ​ For the Six Months Ended June 30, ​ ​ 2023 2022 2023 2022 Interest and dividend income: (Revised and Restated) (Revised) (Revised and Restated) (Revised) Interest and fees on loans ​ $ 41,491 ​ $ 26,277 ​ $ 79,941 ​ $ 50,978 ​ Interest and dividends on taxable securities ​ 1,449 ​ 1,340 ​ 2,932 ​ 2,665 ​ Interest and dividends on tax exempt securities ​ 102 ​ 105 ​ 203 ​ 210 ​ Interest and dividends on other earning assets ​ 7,158 ​ 448 ​ 11,382 ​ 854 ​ Total interest and dividend income ​ 50,200 ​ 28,170 ​ 94,458 ​ 54,707 ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ Interest on deposits ​ 24,783 ​ 2,311 ​ 39,827 ​ 4,684 ​ Interest on other borrowings ​ 2,083 ​ 1,353 ​ 5,975 ​ 2,724 ​ Total interest expense ​ 26,866 ​ 3,664 ​ 45,802 ​ 7,408 ​ Net interest income ​ 23,334 ​ 24,506 ​ 48,656 ​ 47,299 ​ Provision for credit losses ​ 4,352 ​ 422 ​ 9,615 ​ 521 ​ Net interest income after provision for credit losses ​ 18,982 ​ 24,084 ​ 39,041 ​ 46,778 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income: ​ ​ ​ ​ ​ ​ ​ Account maintenance and deposit service fees ​ 1,457 ​ 1,442 ​ 2,681 ​ 2,793 ​ Income from bank-owned life insurance ​ 394 ​ 378 ​ 814 ​ 753 ​ Mortgage banking income ​ 5,198 ​ 593 ​ 9,513 ​ 593 ​ Gain on sale of loans ​ ​ — ​ ​ — ​ ​ 51 ​ ​ — ​ Consumer Program derivative ​ ​ 1,758 ​ ​ ( 238 ) ​ ​ 13,201 ​ ​ ( 184 ) ​ Other noninterest income ​ 130 ​ 217 ​ 347 ​ 581 ​ Total noninterest income ​ 8,937 ​ 2,392 ​ 26,607 ​ 4,536 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expenses: ​ ​ ​ ​ ​ ​ ​ Salaries and benefits ​ 15,283 ​ 10,573 ​ 30,311 ​ 20,198 ​ Occupancy expenses ​ 1,593 ​ 1,418 ​ 3,038 ​ 2,875 ​ Furniture and equipment expenses ​ 1,852 ​ 1,128 ​ 3,429 ​ 2,228 ​ Amortization of intangible assets ​ 318 ​ 341 ​ 635 ​ 682 ​ Virginia franchise tax expense ​ 848 ​ 814 ​ ​ 1,697 ​ 1,627 ​ Data processing expense ​ 2,828 ​ 1,293 ​ 5,079 ​ 2,783 ​ Marketing expense ​ ​ 521 ​ ​ 731 ​ ​ 1,090 ​ ​ 1,196 ​ Telephone and communication expense ​ 416 ​ 366 ​ 793 ​ 748 ​ Net gain on other real estate owned ​ — ​ — ​ — ​ ( 59 ) ​ Loss on bank premises and equipment and assets held for sale ​ ​ — ​ ​ 620 ​ ​ — ​ ​ 620 ​ Professional fees ​ 1,075 ​ 827 ​ 1,937 ​ 1,921 ​ Miscellaneous lending expenses ​ ​ 568 ​ ​ 104 ​ ​ 1,453 ​ ​ 494 ​ Fraud losses ​ ​ 1,997 ​ ​ 57 ​ ​ 2,452 ​ ​ 110 ​ Other operating expenses ​ 3,140 ​ 2,251 ​ 5,479 ​ 4,152 ​ Total noninterest expenses ​ 30,439 ​ 20,523 ​ 57,393 ​ 39,575 ​ Income (loss) before income taxes ​ ( 2,520 ) ​ 5,953 ​ 8,255 ​ 11,739 ​ Income tax expense (benefit) ​ ( 526 ) ​ 1,335 ​ 1,887 ​ 2,602 ​ Net income (loss) ​ $ ( 1,994 ) ​ $ 4,618 ​ $ 6,368 ​ $ 9,137 ​ Other comprehensive loss: ​ ​ ​ ​ ​ ​ ​ Unrealized loss on available-for-sale securities ​ $ ( 3,299 ) ​ $ ( 10,723 ) ​ ( 293 ) ​ ​ ( 24,099 ) ​ Tax benefit ​ ( 693 ) ​ ​ ( 2,252 ) ​ ( 62 ) ​ ​ ( 5,061 ) ​ Other comprehensive loss ​ ( 2,606 ) ​ ​ ( 8,471 ) ​ ( 231 ) ​ ( 19,038 ) ​ Comprehensive income (loss) ​ $ ( 4,600 ) ​ $ ( 3,853 ) ​ $ 6,137 ​ $ ( 9,901 ) ​ Earnings (loss) per share, basic ​ $ ( 0.08 ) ​ $ 0.19 ​ $ 0.26 ​ $ 0.37 ​ Earnings (loss) per share, diluted ​ $ ( 0.08 ) ​ $ 0.19 ​ $ 0.26 ​ $ 0.37 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 3 Table of Contents PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Revised and Restated) FOR THE THREE MONTHS ENDED JUNE 30, 2023 AND 2022 (dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Other ​ ​ ​ ​ Common Stock ​ Paid in ​ Retained ​ Comprehensive ​ ​ ​ Shares Amount Capital Earnings Loss Total Balance March 31, 2023 ​ ​ 24,685,064 ​ $ 246 ​ $ 312,903 ​ $ 107,744 ​ $ ( 23,475 ) ​ $ 397,418 Net loss ​ — ​ — ​ — ​ ( 1,994 ) ​ — ​ ( 1,994 ) Changes in other comprehensive loss on investment securities (net of tax benefit, $ 693 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,606 ) ​ ​ ( 2,606 ) Dividends on common stock ($ 0.10 per share) ​ — ​ — ​ — ​ ( 2,469 ) ​ — ​ ( 2,469 ) Restricted stock granted ​ ​ 5,000 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense ​ — ​ — ​ 73 ​ — ​ — ​ 73 Balance - June 30, 2023 ​ ​ 24,690,064 ​ $ 246 ​ $ 312,976 ​ $ 103,281 ​ $ ( 26,081 ) ​ $ 390,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Other ​ ​ ​ ​ Common Stock ​ Paid in ​ Retained ​ Comprehensive ​ ​ ​ Shares Amount Capital Earnings Loss Total Balance March 31, 2022 ​ ​ 24,622,739 ​ $ 245 ​ $ 311,872 ​ $ 99,617 ​ $ ( 9,455 ) ​ $ 402,279 Net income ​ — ​ — ​ — ​ 4,618 ​ — ​ 4,618 Changes in other comprehensive loss on investment securities (net of tax benefit, $ 2,252 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,471 ) ​ ​ ( 8,471 ) Dividends on common stock ($ 0.10 per share) ​ — ​ — ​ — ​ ( 2,465 ) ​ — ​ ( 2,465 ) Stock option exercises ​ 27,500 ​ ​ 1 ​ ​ 278 ​ ​ — ​ ​ — ​ ​ 279 Repurchase of restricted stock ​ ​ — ​ ​ — ​ ​ ( 2 ) ​ ​ — ​ ​ — ​ ​ ( 2 ) Stock-based compensation expense ​ ​ — ​ — ​ 92 ​ — ​ — ​ 92 Balance - June 30, 2022 ​ ​ 24,650,239 ​ $ 246 ​ $ 312,240 ​ $ 101,770 ​ $ ( 17,926 ) ​ $ 396,330 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements . ​ ​ ​ 4 Table of Contents PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Revised and Restated) FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Other ​ ​ ​ ​ Common Stock ​ Paid in ​ Retained ​ Comprehensive ​ ​ ​ Shares Amount Capital Earnings Loss Total Balance - December 31, 2022 ​ ​ 24,680,097 ​ $ 246 ​ $ 312,722 ​ $ 101,850 ​ $ ( 25,850 ) ​ $ 388,968 Net income ​ ​ — ​ — ​ — ​ 6,368 ​ — ​ 6,368 Changes in other comprehensive loss on investment securities (net of tax benefit, $ 62 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 231 ) ​ ​ ( 231 ) Dividends on common stock ($ 0.20 per share) ​ ​ — ​ — ​ — ​ ( 4,937 ) ​ — ​ ( 4,937 ) Shares retired to unallocated ​ ​ ( 1,033 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock option exercises ​ ​ 8,000 ​ — ​ 85 ​ — ​ — ​ 85 Restricted stock granted ​ ​ 5,000 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Restricted stock forfeited ​ ​ ( 2,000 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Repurchase of restricted stock ​ ​ — ​ ​ — ​ ​ ( 12 ) ​ ​ — ​ ​ — ​ ​ ( 12 ) Stock-based compensation expense ​ ​ — ​ — ​ 181 ​ — ​ — ​ 181 Balance - June 30, 2023 ​ ​ 24,690,064 ​ $ 246 ​ $ 312,976 ​ $ 103,281 ​ $ ( 26,081 ) ​ $ 390,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Other ​ ​ ​ ​ Common Stock ​ Paid in ​ Retained ​ Comprehensive ​ ​ ​ Shares Amount Capital Earnings Income (Loss) Total Balance - December 31, 2021 ​ ​ 24,574,619 ​ $ 245 ​ $ 311,127 ​ $ 97,555 ​ $ 1,112 ​ $ 410,039 Net income ​ — ​ — ​ — ​ 9,137 ​ — ​ 9,137 Changes in other comprehensive loss on investment securities (net of tax benefit, $ 5,061 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 19,038 ) ​ ​ ( 19,038 ) Dividends on common stock ($ 0.20 per share) ​ — ​ — ​ — ​ ( 4,922 ) ​ — ​ ( 4,922 ) Shares retired to unallocated ​ ​ ( 538 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock option exercises ​ 27,500 ​ ​ 1 ​ ​ 278 ​ ​ — ​ ​ — ​ ​ 279 Restricted stock granted ​ ​ 1,500 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Repurchase of restricted stock ​ ​ — ​ ​ — ​ ​ ( 8 ) ​ ​ — ​ ​ — ​ ​ ( 8 ) Stock-based compensation expense ​ ​ — ​ — ​ 843 ​ — ​ — ​ 843 Shares issued in lieu of bonus ​ ​ 47,158 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Balance - June 30, 2022 ​ ​ 24,650,239 ​ $ 246 ​ $ 312,240 ​ $ 101,770 ​ $ ( 17,926 ) ​ $ 396,330 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements . ​ ​ 5 Table of Contents PRIMIS FINANCIAL CORP . CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended June 30, ​ 2023 2022 Operating activities: ​ (Revised and Restated) ​ (Revised) Net income ​ $ 6,368 ​ $ 9,137 Adjustments to reconcile net income to net cash and cash equivalents (used in) provided by operating activities: ​ ​ Depreciation and amortization ​ 4,547 ​ 3,515 Net amortization (accretion) of premiums and discounts ​ ( 635 ) ​ 312 Provision for credit losses ​ 9,615 ​ 521 Origination of loans held for sale ​ ​ ( 301,161 ) ​ ​ ( 26,998 ) Proceeds from sale of loans held for sale ​ ​ 270,852 ​ ​ 31,273 Net gains on mortgage banking ​ ​ ( 9,513 ) ​ ​ ( 593 ) Net gains on sale of loans ​ ​ ( 51 ) ​ ​ — Loss on bank premises and equipment and assets held for sale ​ ​ — ​ ​ 620 Earnings on bank-owned life insurance ​ ( 784 ) ​ ( 753 ) Gain on bank-owned life insurance death benefit ​ ​ ( 30 ) ​ ​ — Stock-based compensation expense ​ 181 ​ 843 Gain on other real estate owned ​ — ​ ( 59 ) Benefit for deferred income taxes ​ ( 2,704 ) ​ — Net change in fair value of Consumer Program derivative ​ ​ ( 11,100 ) ​ ​ 273 Net increase in other assets ​ ( 5,539 ) ​ ( 2,510 ) Net increase (decrease) in other liabilities ​ 4,266 ​ ( 3,147 ) Net cash and cash equivalents (used in) provided by operating activities ​ ​ ( 35,688 ) ​ 12,434 Investing activities: ​ ​ Purchases of securities available-for-sale ​ ( 5,000 ) ​ ( 27,573 ) Proceeds from paydowns, maturities and calls of securities available-for-sale ​ 17,373 ​ 16,896 Proceeds from paydowns, maturities and calls of securities held-to-maturity ​ 1,124 ​ 7,907 Net decrease of FRB and FHLB stock ​ ​ 13,732 ​ ​ 2,581 Net increase in loans ​ ( 250,736 ) ​ ( 287,662 ) Proceeds from bank-owned life insurance death benefit ​ ​ 873 ​ ​ 138 Proceeds from sales of other real estate owned, net of improvements ​ ​ — ​ ​ 181 Purchases of bank premises and equipment ​ ( 1,405 ) ​ ( 536 ) Business acquisition, net of cash acquired ​ — ​ ( 4,554 ) Net cash and cash equivalents used in investing activities ​ ( 224,039 ) ​ ( 292,622 ) Financing activities: ​ ​ ​ Net (decrease) increase in deposits ​ 594,529 ​ ( 80,411 ) Cash dividends paid on common stock ​ ( 4,937 ) ​ ( 4,922 ) Proceeds from exercised stock options ​ 85 ​ 279 Repurchase of restricted stock ​ ​ ( 12 ) ​ ​ ( 8 ) Proceeds from secured borrowings, net of repayments ​ ​ 20,595 ​ ​ — Repayment of short-term FHLB advances, net of proceeds ​ ​ — ​ ​ ( 75,000 ) Repayment of short-term borrowings ​ ​ ( 325,000 ) ​ ​ ( 19,254 ) Increase (decrease) in securities sold under agreements to repurchase ​ ( 2,524 ) ​ 58 Net cash and cash equivalents provided by (used in) financing activities ​ 282,736 ​ ( 179,258 ) Net change in cash and cash equivalents ​ 23,009 ​ ( 459,446 ) Cash and cash equivalents at beginning of period ​ 77,859 ​ 530,167 Cash and cash equivalents at end of period ​ $ 100,868 ​ $ 70,721 Supplemental disclosure of cash flow information ​ ​ ​ Cash payments for: ​ ​ ​ Interest ​ $ 41,605 ​ $ 7,698 Income taxes ​ $ 3,908 ​ $ 1,556 Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Initial recognition of operating lease right-of-use assets ​ $ 5,372 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements . 6 Table of Contents PRIMIS FINANCIAL CORP . Notes to Unaudited Condensed Consolidated Financial Statements ​ 1. ACCOUNTING POLICIES (Revised and Restated) 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 June 30, 2023, Primis Bank had thirty-two full-service branches in Virginia and Maryland and also provided services to customers through certain online and mobile applications. Thirty 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 also a consolidated subsidiary of Primis Bank. 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. Major policies and practices are described below and have not changed significantly from the policies and practices disclosed in the Company’s restated Annual Report on Form 10-K/A for the year ended December 31, 2022, except where specifically indicated below. Principles of Consolidation The consolidated financial statements include the accounts of Primis and its subsidiaries Primis Bank, Primis Mortgage Company and EVB Statutory Trust I (the “Trust”). 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 the Trust which is an unconsolidated subsidiary and the junior subordinated debt owed to the Trust is reported as a liability of Primis. 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 applicable accounting standards, 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. Operating Segments The Company, through its Bank subsidiary, provides a broad range of financial services. While the Company’s chief operating decision makers monitor 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 has two reportable operating segments: Primis Mortgage and Primis Bank, as discussed in Note 11 – Segment Information. 7 Table of Contents Basis of Presentation The unaudited 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 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 Primis’ restated Annual Report on Form 10-K/A for the year ended December 31, 2022. Reclassifications In certain instances, amounts reported in the prior year annual audited consolidated financial statements or the interim condensed consolidated financial statements have been reclassified to conform to the current financial statement presentation. ​ 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, credit impairment of investment securities, 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 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 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. The Company’s interest rate swaps meets the definition of a derivative instrument under ASC 815, Derivatives and Hedging, and is accounted for both initially and subsequently at its fair value. The Company assessed the derivative instrument at inception and determined it met the requirements under ASC 815 to be accounted for as a fair value hedge. Fair value hedge relationships mitigate exposure to the change in fair value of the hedged risk in an asset, liability or firm commitment. The Company’s interest rate swaps are a fair value hedge that is accounted for using the portfolio layer method, which allows the Company to hedge the interest rate risk of prepayable loans by designating as the hedged item a stated amount of a closed portfolio of consumer loans that is expected to be outstanding for the designated hedge periods. Under the fair value hedging model, gains or losses attributable to the change in fair value of the derivative instrument, as well as the gains and losses attributable to the change in fair value of the hedged item, are recognized in interest income in the same income statement line item with the hedged item in the period in which the change in fair value occurs. The corresponding adjustment to the hedged asset or liability is included in the basis of the hedged item, while the corresponding change in the fair value of the derivative instrument is recorded as an adjustment to other assets or other liabilities, as applicable. ​ 8 Table of Contents 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 June 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 (dollars in thousands) ​ ​ Amortized Cost Basis ​ ​ Hedged Asset ​ ​ Basis Adjustment ​ ​ Amortized Cost Basis ​ ​ Hedged Asset ​ ​ Basis Adjustment Fixed rate assets ​ $ 440,935 ​ $ 195,739 ​ $ ( 4,261 ) ​ $ — ​ $ — ​ $ — ​ Transfers of Financial Assets The Company follows the guidance in ASC 860, Transfers and Servicing , when accounting for loan participations and other partial loan sales. Transfers of an entire financial asset (i.e. loan sales), a group of entire financial assets, or a participating interest in an entire financial asset (i.e. loan participations sold) are accounted for as sales when control over the assets have been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Participations or other partial loan sales that do not meet the definition of a participating interest would remain on the balance sheet and the proceeds are recorded as a secured borrowing. Secured borrowings are initially recorded at fair value which corresponds to the proceeds received for the transfer of the assets, and any failed sale discount is amortized into income over the life of the related asset. The Company retains servicing rights on loans transferred under secured borrowings, but in accordance with U.S. GAAP does not record a servicing asset. The Company transferred $ 5.7 million and $ 20.8 million in principal balance of loans to another financial institution during the three and six months ended June 30, 2023, respectively, that were accounted for as secured borrowings. As of June 30, 2023 the amortized cost of those loans recorded in loans held for investment in our balance sheet was $ 20.7 million. None of the loans were past due or on nonaccrual as of June 30, 2023 and we had no charge-offs of these loans during the three or six months ended June 30, 2023. See Note 7 – Debt and Other Borrowings – for additional information on transfers accounted for as secured borrowings. Retained Earnings Revisions During the second quarter of 2023, the Company discovered an employee loan fraud with total exposure of approximately $ 2.5 million. The fraud dated back to the origination of several loans to a customer in 2010. Management believes, on the advice of its counsel, its insurance broker and a third party forensic auditor, that the losses are recoverable under the Company’s insurance policies and is working through the claims process. The Company has evaluated the effect of the error, both qualitatively and quantitatively, and believes the impact to prior years is immaterial to each respective period assessed. However, the Company’s quantitative and qualitative assessments of the fraud losses on its projected 2023 annual earnings was expected to be material at the time the evaluation was performed as of June 30, 2023. Accordingly, the Company made the decision to report the losses in the respective periods in which they were incurred in its future Form 10-Q and Form 10-K filings by revising impacted periods beginning with the Quarterly Report on Form 10-Q as of June 30, 2023. For all of its filings on and after June 30, 2023, the Company revised opening retained earnings of the earliest period presented for losses incurred in earlier periods and revised all prior periods presented in the filing for losses incurred related to the period. Accordingly, the Company has revised prior periods presented in this Form 10-Q/A to reflect the fraud losses in the respective period incurred, with any losses incurred prior to January 1, 2022 adjusted in the January 1, 2022 opening retained earnings balance as previously reported in the Company’s restated Annual Report on Form 10-K/A for the year ended December 31, 2022. ​ 9 Table of Contents The table below discloses the net change (increase or (decrease)) included in each condensed consolidated statements of income and comprehensive income (loss) line items in this Form 10-Q/A, as a result of the revisions discussed above. The revisions to the six months ended June 30, 2022 resulted in a decline in common and basic EPS from continuing operations of $ 0.01 . There was no change to previously reported basic and diluted EPS from continuing operations in any other period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended June 30, ​ For the Six Months Ended June 30, (dollars in thousands) 2023 2022 2023 2022 Income Statement: ​ ​ ​ ​ ​ ​ ​ ​ Decrease in interest income ​ $ ( 26 ) ​ $ ( 29 ) ​ $ ( 71 ) ​ ​ ( 54 ) Increase in noninterest expenses ​ ​ - ​ ​ 47 ​ ​ 9 ​ ​ 92 Decrease in income tax expense ​ ​ ( 5 ) ​ ​ ( 16 ) ​ ​ ( 16 ) ​ ​ ( 30 ) Net decrease in net income from continuing operations ​ $ ( 21 ) ​ $ ( 60 ) ​ $ ( 64 ) ​ $ ( 116 ) ​ Restatement and Revision of Previously Issued Condensed Consolidated Financial Statements On February 26, 2024, the Audit Committee of the Board of Directors of the Company and the Company’s management team concluded, following discussions with the Company’s independent registered public accounting firm, Forvis Mazars, LLP (“Forvis”), that the Company’s previously issued unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 should no longer be relied upon. The accounting matters underlying the Company’s conclusion related to transfers of loans by the Company’s subsidiary, Primis Bank, of approximately $ 20.8 million (the “Transferred Loans”) to another financial institution during the three and six months ended June 30, 2023. As part of the Company’s 2023 year-end reporting process in the first quarter of 2024, the Company determined that the transfer of the Transferred Loans from Primis Bank to the other financial institution 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 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. Additionally, during the 2023 annual independent audit of the Company by Forvis, the Company pursued a pre-clearance process with the Office of the Chief Accountant of the SEC related accounting for the Consumer Program loan portfolio as more fully described in its Annual Report on Form 10-K for the year ended December 31, 2023. The Company received a non-objection from the SEC to the Company’s accounting conclusions required to correct the prior accounting for the Consumer Program. As a result, in consultation with the Company’s Audit Committee to its Board of Directors and its independent registered public accounting firm, Forvis, management determined that the corrections to the Consumer Program accounting was material to the financial statements as of and for the three and six months ended June 30, 2023, which are also being restated in this Form 10-Q/A. The correction to the Consumer Program accounting in the financial statements as of and for the three and six months ended June 30, 2022 was not deemed to be material, but for comparison purposes to the current period in this Form 10-Q/A the Company has revised the prior period amounts as applicable. ​ 10 Table of Contents The primary effects of the restatements for the failed loan sale and Consumer Program as of June 30, 2023, and for the three and six month periods then ended are shown below. ​ ​ ​ ​ ​ ​ ​ ​ As of and for the three and six months ended June 30, 2023 ​ ​ (In thousands, expect per share data) ​ ​ ​ ​ As Revised 1 , ​ As Reported As Restated Condensed Consolidated Balance Sheet ​ ​ ​ ​ Loans held for investment ​ $ 3,173,638 ​ $ 3,172,254 Loans held for investment, collateralizing secured borrowings ​ ​ — ​ ​ 20,714 Allowance for credit losses ​ ​ ( 38,414 ) ​ ​ ( 38,541 ) Net Loans ​ ​ 3,135,224 ​ ​ 3,154,427 Deferred tax assets, net ​ ​ 20,391 ​ ​ 22,639 Consumer Program derivative ​ ​ - ​ ​ 10,627 Other assets ​ ​ 72,438 ​ ​ 58,079 Total assets ​ ​ 3,848,493 ​ ​ 3,866,212 Secured borrowings ​ ​ — ​ ​ 20,595 Other liabilities ​ ​ 27,361 ​ ​ 27,279 Total liabilities ​ ​ 3,455,277 ​ ​ 3,475,790 Retained earnings ​ ​ 106,075 ​ ​ 103,281 Stockholders’ equity ​ ​ 393,216 ​ ​ 390,422 Total liabilities and stockholders' equity ​ $ 3,848,493 ​ $ 3,866,212 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Income and Comprehensive Income (Loss) ​ ​ ​ ​ Three months ended June 30, 2023 ​ ​ ​ ​ Interest and fees on loans ​ $ 43,970 ​ $ 41,491 Total interest and dividend income ​ ​ 52,679 ​ ​ 50,200 Interest on other borrowings ​ ​ 1,739 ​ ​ 2,083 Total interest expense ​ ​ 26,522 ​ ​ 26,866 Net interest income ​ ​ 26,157 ​ ​ 23,334 Provision for credit losses ​ ​ 4,301 ​ ​ 4,352 Net interest income after provision for credit losses ​ ​ 21,856 ​ ​ 18,982 Gain on sale of loans ​ ​ 182 ​ ​ — Consumer Program derivative ​ ​ - ​ ​ 1,758 Credit enhancement income ​ ​ 1,152 ​ ​ - Total noninterest income ​ ​ 8,486 ​ ​ 8,937 Miscellaneous lending expenses ​ ​ - ​ ​ 568 Other operating expenses ​ ​ 5,303 ​ ​ 3,140 Total noninterest expenses ​ ​ 30,552 ​ ​ 30,439 Income (loss) before income taxes ​ ​ ( 210 ) ​ ​ ( 2,520 ) Income tax expense (benefit) ​ ​ ( 22 ) ​ ​ ( 526 ) Net income (loss) ​ $ ( 188 ) ​ $ ( 1,994 ) Comprehensive income (loss) ​ $ ( 2,794 ) ​ $ ( 4,600 ) EPS – Basic ​ $ ( 0.01 ) ​ $ ( 0.08 ) EPS – Diluted ​ $ ( 0.01 ) ​ $ ( 0.08 ) ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, 2023 ​ ​ ​ ​ Interest and fees on loans ​ $ 85,276 ​ $ 79,941 Total interest and dividend income ​ ​ 99,793 ​ ​ 94,458 Interest on other borrowings ​ ​ 5,444 ​ ​ 5,975 Total interest expense ​ ​ 45,271 ​ ​ 45,802 Net interest income ​ ​ 54,522 ​ ​ 48,656 Provision for credit losses ​ ​ 9,488 ​ ​ 9,615 Net interest income after provision for credit losses ​ ​ 45,034 ​ ​ 39,041 Gain on sale of loans ​ ​ 660 ​ ​ 51 Consumer Program derivative ​ ​ - ​ ​ 13,201 Credit enhancement income ​ ​ 6,038 ​ ​ - Total noninterest income ​ ​ 20,018 ​ ​ 26,607 Miscellaneous lending expenses ​ ​ - ​ ​ 1,453 Other operating expenses ​ ​ 8,559 ​ ​ 5,479 Total noninterest expenses ​ ​ 57,956 ​ ​ 57,393 Income (loss) before income taxes ​ ​ 7,096 ​ ​ 8,255 11 Table of Contents Income tax benefit ​ ​ 1,331 ​ ​ 1,887 Net income (loss) ​ $ 5,765 ​ $ 6,368 Comprehensive income (loss) ​ $ 5,534 ​ $ 6,137 EPS – Basic ​ $ 0.23 ​ $ 0.26 EPS – Diluted ​ $ 0.23 ​ $ 0.26 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended ​ ​ ​ ​ Total shareholders' equity, March 31, 2023 ​ $ 398,406 ​ $ 397,418 Retained Earnings, March 31, 2023 ​ ​ 108,732 ​ ​ 107,744 Net loss, three months ended June 30, 2023 ​ ​ ( 188 ) ​ ​ ( 1,994 ) Retained Earnings, June 30, 2023 ​ ​ 106,075 ​ ​ 103,281 Total shareholders' equity, June 30, 2023 ​ $ 393,216 ​ $ 390,422 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended ​ ​ ​ ​ Total shareholders' equity, December 31, 2022 ​ $ 392,365 ​ $ 388,968 Retained Earnings, December 31, 2022 ​ ​ 105,247 ​ ​ 101,850 Net income, six months ended June 30, 2023 ​ ​ 5,765 ​ ​ 6,368 Retained Earnings, June 30, 2023 ​ ​ 106,075 ​ ​ 103,281 Total shareholders' equity, June 30, 2023 ​ $ 393,216 ​ $ 390,422 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Cash Flows ​ ​ ​ ​ Operating activities ​ ​ ​ ​ Net income ​ $ 5,765 ​ $ 6,368 Credit enhancement income ​ ​ ( 6,038 ) ​ ​ - Provision for credit losses ​ ​ 9,488 ​ ​ 9,615 Net gains on sales of loans ​ ​ ( 660 ) ​ ​ ( 51 ) Benefit for deferred income taxes ​ ​ ( 2,040 ) ​ ​ ( 2,704 ) Net change in fair value of Consumer Program derivative ​ ​ - ​ ​ ( 11,100 ) Net increase in other assets ​ ​ ( 8,830 ) ​ ​ ( 5,539 ) Net increase (decrease) in other liabilities ​ ​ 4,345 ​ ​ 4,266 Net cash and cash equivalents (used in) provided by operating activities ​ ​ ( 34,513 ) ​ ​ ( 35,688 ) Investing activities ​ ​ ​ ​ Net increase in loans ​ ​ ( 231,405 ) ​ ​ ( 250,736 ) Net cash and cash equivalents used in investing activities ​ ​ ( 204,708 ) ​ ​ ( 224,039 ) Financing activities ​ ​ ​ ​ Net (decrease) increase in deposits ​ ​ 594,618 ​ ​ 594,529 Change in secured borrowings ​ ​ — ​ ​ 20,595 Net cash and cash equivalents provided by financing activities ​ $ 262,230 ​ $ 282,736 Cash payments for interest ​ $ 41,182 ​ $ 41,605 1 These balances include revisions from the Company’s original Quarterly Report on Form 10-Q for the three and six month periods ended June 30, 2023 to reflect adjustments related to the fraud losses, as described in the Company’s restated Annual Report on Form 10-K/A as of and for the year ended December 31, 2022. ​ ​ 12 Table of Contents The primary effects of the revisions related to the Consumer Program as of June 30, 2022, and for the three- and six-month period then ended are shown below. ​ ​ ​ ​ ​ ​ ​ ​ As of and for the three and six months ended June 30, 2022 ​ ​ (In thousands, expect per share data) ​ ​ ​ ​ ​ ​ As Revised 1 , ​ ​ As Reported ​ As Restated Condensed Consolidated Statement of Income and Comprehensive Income (Loss) ​ ​ ​ ​ ​ Three months ended June 30, 2022 ​ ​ ​ ​ Interest and fees on loans ​ $ 26,337 ​ $ 26,277 Total interest and dividend income ​ ​ 28,230 ​ ​ 28,170 Total interest expense ​ ​ 3,652 ​ ​ 3,664 Net interest income ​ ​ 24,578 ​ ​ 24,506 Net interest income after provision for credit losses ​ ​ 24,156 ​ ​ 24,084 Consumer program derivative ​ ​ — ​ ​ ( 238 ) Total noninterest income ​ ​ 2,630 ​ ​ 2,392 Miscellaneous lending expenses ​ ​ — ​ ​ 104 Other operating expenses ​ ​ 2,366 ​ ​ 2,251 Total noninterest expenses ​ ​ 20,477 ​ ​ 20,523 Income before income taxes ​ ​ 6,309 ​ ​ 5,953 Income tax expense ​ ​ 1,361 ​ ​ 1,335 Net income ​ $ 4,948 ​ $ 4,618 Comprehensive income (loss) ​ $ ( 3,462 ) ​ $ ( 3,853 ) EPS – Basic ​ $ 0.20 ​ $ 0.19 EPS – Diluted ​ $ 0.20 ​ $ 0.19 ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, 2022 ​ ​ ​ ​ Interest and fees on loans ​ $ 51,060 ​ $ 50,978 Total interest and dividend income ​ ​ 54,789 ​ ​ 54,707 Total interest expense ​ ​ 7,383 ​ ​ 7,408 Net interest income ​ ​ 47,406 ​ ​ 47,299 Net interest income after provision for credit losses ​ ​ 46,885 ​ ​ 46,778 Consumer Program derivative ​ ​ - ​ ​ ( 184 ) Total noninterest income ​ ​ 4,720 ​ ​ 4,536 Miscellaneous lending expenses ​ ​ - ​ ​ 494 Other operating expenses ​ ​ 4,690 ​ ​ 4,152 Total noninterest expenses ​ ​ 39,509 ​ ​ 39,575 Income (loss) before income taxes ​ ​ 12,096 ​ ​ 11,739 Income tax benefit ​ ​ 2,612 ​ ​ 2,602 Net income (loss) ​ $ 9,484 ​ $ 9,137 Comprehensive income (loss) ​ $ ( 9,436 ) ​ $ ( 9,901 ) EPS – Basic ​ $ 0.39 ​ $ 0.37 EPS – Diluted ​ $ 0.38 ​ $ 0.37 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Changes in Stockholders’ Equity ​ ​ ​ ​ ​ Total stockholders' equity, March 31, 2022 ​ $ 402,372 ​ $ 402,279 Retained earnings, March 31, 2022 ​ ​ 99,710 ​ ​ 99,617 Net income, three months ended June 30, 2022 ​ ​ 4,948 ​ ​ 4,618 Retained earnings, June 30, 2022 ​ ​ 102,193 ​ ​ 101,770 Total stockholders' equity, June 30, 2022 ​ $ 396,753 ​ $ 396,330 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended ​ ​ ​ ​ Total stockholders' equity, December 31, 2021 ​ $ 410,115 ​ $ 410,039 Retained earnings, December 31, 2021 ​ ​ 97,631 ​ ​ 97,555 Net income, six months ended June 30, 2022 ​ ​ 9,484 ​ ​ 9,137 Retained Earnings, June 30, 2022 ​ ​ 102,193 ​ ​ 101,770 Total shareholders' equity, June 30, 2022 ​ $ 396,753 ​ $ 396,330 ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Statement of Cash Flows ​ ​ ​ ​ ​ Operating activities ​ ​ ​ ​ ​ 13 Table of Contents Net income ​ $ 9,484 ​ $ 9,137 Net change in fair value of Consumer program derivative ​ ​ — ​ ​ 273 Net increase in other assets ​ ​ ( 3,008 ) ​ ​ ( 2,510 ) Net increase (decrease) in other liabilities ​ ​ ( 2,631 ) ​ ​ ( 3,147 ) Net cash and cash equivalents (used in) provided by operating activities ​ ​ 12,526 ​ ​ 12,434 Investing activities ​ ​ ​ ​ ​ Net increase in loans ​ $ ( 287,754 ) ​ $ ( 287,662 ) Net cash and cash equivalents used in investing activities ​ ​ ( 292,714 ) ​ ​ ( 292,622 ) 1 These balances include revisions from the Company’s original Quarterly Report on Form 10-Q for the three and six month periods ended June 30, 2022 to reflect adjustments related to the fraud losses, as described in the Company’s restated Annual Report on Form 10-K/A as of and for the year ended December 31, 2022. ​ Recent Accounting Pronouncements In March 2022, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 2022-02, Troubled Debt Restructurings and Vintage Disclosures . This ASU eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under FASB ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancing and restructurings for borrowers experiencing financial difficulty. The Company adopted the guidance in the first quarter of 2023, which did not have a material impact on the Company’s consolidated financial statements and disclosures. In March 2022, FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method , to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method. To reflect that expansion, the last-of-layer method was renamed the portfolio layer method. The amendments in this update were effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company adopted the update as it became applicable to us on May 11, 2023. The adoption of this standard did not have a material impact on the consolidated financial statements or disclosures. ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Gross Unrealized ​ Fair ​ Cost Gains Losses Value June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 113,816 ​ $ — ​ $ ( 15,802 ) ​ $ 98,014 Obligations of states and political subdivisions ​ 33,951 ​ 2 ​ ( 4,280 ) ​ 29,673 Corporate securities ​ 16,000 ​ — ​ ( 3,044 ) ​ 12,956 Collateralized loan obligations ​ 5,020 ​ — ​ ( 119 ) ​ 4,901 Residential government-sponsored collateralized mortgage obligations ​ 30,813 ​ — ​ ( 2,245 ) ​ 28,568 Government-sponsored agency securities ​ 16,243 ​ — ​ ( 2,883 ) ​ 13,360 Agency commercial mortgage-backed securities ​ 35,374 ​ ​ — ​ ​ ( 4,580 ) ​ 30,794 SBA pool securities ​ 4,884 ​ 10 ​ ( 73 ) ​ 4,821 Total ​ $ 256,101 ​ $ 12 ​ $ ( 33,026 ) ​ $ 223,087 ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Gross Unrealized ​ Fair ​ Cost Gains Losses Value December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 119,371 ​ $ 1 ​ $ ( 16,491 ) ​ $ 102,881 Obligations of states and political subdivisions ​ 34,103 ​ 2 ​ ( 4,927 ) ​ 29,178 Corporate securities ​ 16,000 ​ — ​ ( 1,172 ) ​ 14,828 Collateralized loan obligations ​ 5,022 ​ — ​ ( 146 ) ​ 4,876 Residential government-sponsored collateralized mortgage obligations ​ 28,643 ​ — ​ ( 2,048 ) ​ 26,595 Government-sponsored agency securities ​ 17,719 ​ — ​ ( 3,103 ) ​ 14,616 Agency commercial mortgage-backed securities ​ 42,180 ​ ​ — ​ ​ ( 4,763 ) ​ 37,417 SBA pool securities ​ 5,998 ​ 13 ​ ( 87 ) ​ 5,924 Total ​ $ 269,036 ​ $ 16 ​ $ ( 32,737 ) ​ $ 236,315 ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Gross Unrecognized ​ Allowance for ​ Fair ​ Cost Gains Losses Credit Losses Value June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 9,753 ​ $ — ​ $ ( 927 ) ​ $ — ​ $ 8,826 Obligations of states and political subdivisions ​ 2,388 ​ 1 ​ ( 63 ) ​ — ​ 2,326 Residential government-sponsored collateralized mortgage obligations ​ 237 ​ — ​ ( 20 ) ​ — ​ 217 Total ​ $ 12,378 ​ $ 1 ​ $ ( 1,010 ) ​ $ — ​ $ 11,369 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Gross Unrecognized ​ Allowance for ​ Fair ​ Cost Gains Losses Credit Losses Value December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 10,522 ​ $ — ​ $ ( 1,007 ) ​ $ — ​ $ 9,515 Obligations of states and political subdivisions 2,721 ​ 3 ​ ( 46 ) ​ — ​ 2,678 Residential government-sponsored collateralized mortgage obligations 277 ​ — ​ ( 21 ) ​ — ​ 256 Total ​ $ 13,520 ​ $ 3 ​ $ ( 1,074 ) ​ $ — ​ $ 12,449 ​ 15 Table of Contents Available-for-sale investment securities of $ 5.0 million were purchased during the three and six months ended June 30, 2023. During the three and six months ended June 30, 2022, $ 5.0 million and $ 27.6 million, respectively of available-for-sale investment securities were purchased. No held-to-maturity investments were purchased during the three and six months ended June 30, 2023 and 2022. No investment securities were sold during the three and six months ended June 30, 2023 and 2022. The amortized cost and fair value of available-for-sale and held-to-maturity investment securities as of June 30, 2023, by contractual maturity were as follows (in thousands). Investment securities not due at a single maturity date are shown separately. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-Sale ​ Held-to-Maturity ​ Amortized ​ ​ Amortized ​ ​ ​ ​ Cost ​ Fair Value ​ Cost ​ Fair Value Due within one year ​ $ — ​ $ — ​ $ 325 ​ $ 324 Due in one to five years ​ ​ 10,024 ​ ​ 9,121 ​ ​ 1,124 ​ ​ 1,121 Due in five to ten years ​ 34,261 ​ 28,718 ​ 939 ​ 881 Due after ten years ​ 26,929 ​ 23,051 ​ — ​ — Residential government-sponsored mortgage-backed securities ​ 113,816 ​ 98,014 ​ 9,753 ​ 8,826 Residential government-sponsored collateralized mortgage obligations ​ 30,813 ​ 28,568 ​ 237 ​ 217 Agency commercial mortgage-backed securities ​ 35,374 ​ 30,794 ​ — ​ — SBA pool securities ​ 4,884 ​ 4,821 ​ — ​ — Total ​ $ 256,101 ​ $ 223,087 ​ $ 12,378 ​ $ 11,369 ​ Investment securities with a carrying amount of approximately $ 193.3 million and $ 99.4 million at June 30, 2023 and December 31, 2022, respectively, were pledged to secure public deposits, certain other deposits, a line of credit for advances from the Federal Home Loan Bank (“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 June 30, 2023, Primis had an immaterial allowance for credit losses on held-to-maturity securities. The unrealized losses related to investment securities available-for-sale identified as of June 30, 2023 and December 31, 2022, relate to changes in interest rates relative to when the investment securities were purchased, and do not indicate credit-related impairment. Primis performs quantitative and 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 at June 30, 2023 and 16 Table of Contents December 31, 2022. 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 June 30, 2023 and December 31, 2022 by duration of time in a loss position (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 Months or More ​ Total June 30, 2023 Fair Unrealized Fair Unrealized Fair Unrealized Available-for-Sale ​ value ​ Losses ​ value ​ Losses ​ value ​ Losses Residential government-sponsored mortgage-backed securities ​ $ 4,796 ​ $ ( 281 ) ​ $ 93,218 ​ $ ( 15,521 ) ​ $ 98,014 ​ $ ( 15,802 ) Obligations of states and political subdivisions ​ ​ 6,850 ​ ​ ( 84 ) ​ ​ 21,821 ​ ​ ( 4,196 ) ​ ​ 28,671 ​ ​ ( 4,280 ) Corporate securities ​ ​ 5,591 ​ ​ ( 409 ) ​ ​ 7,365 ​ ​ ( 2,635 ) ​ ​ 12,956 ​ ​ ( 3,044 ) Collateralized loan obligations ​ ​ — ​ ​ — ​ ​ 4,901 ​ ​ ( 119 ) ​ ​ 4,901 ​ ​ ( 119 ) Residential government-sponsored collateralized mortgage obligations ​ ​ 13,910 ​ ​ ( 338 ) ​ ​ 14,658 ​ ​ ( 1,907 ) ​ ​ 28,568 ​ ​ ( 2,245 ) Government-sponsored agency securities ​ — ​ — ​ 13,360 ​ ( 2,883 ) ​ 13,360 ​ ( 2,883 ) Agency commercial mortgage-backed securities ​ — ​ — ​ 30,794 ​ ( 4,580 ) ​ 30,794 ​ ( 4,580 ) SBA pool securities ​ — ​ — ​ 3,009 ​ ( 73 ) ​ 3,009 ​ ( 73 ) Total ​ $ 31,147 ​ $ ( 1,112 ) ​ $ 189,126 ​ $ ( 31,914 ) ​ $ 220,273 ​ $ ( 33,026 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 Months or More ​ Total June 30, 2023 Fair Unrecognized Fair Unrecognized Fair Unrecognized Held-to-Maturity ​ value ​ Losses ​ value ​ Losses ​ value ​ Losses Residential government-sponsored mortgage-backed securities ​ $ 586 ​ $ ( 35 ) ​ $ 8,240 ​ $ ( 892 ) ​ $ 8,826 ​ $ ( 927 ) Obligations of states and political subdivisions ​ 1,357 ​ ( 17 ) ​ 388 ​ ( 46 ) ​ 1,745 ​ ( 63 ) Residential government-sponsored collateralized mortgage obligations ​ 58 ​ ( 4 ) ​ 159 ​ ( 16 ) ​ 217 ​ ( 20 ) Total ​ $ 2,001 ​ $ ( 56 ) ​ $ 8,787 ​ $ ( 954 ) ​ $ 10,788 ​ $ ( 1,010 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 Months or More ​ Total December 31, 2022 Fair Unrealized Fair Unrealized Fair Unrealized Available-for-Sale ​ value ​ Losses ​ value ​ Losses ​ value ​ Losses Residential government-sponsored mortgage-backed securities ​ $ 23,484 ​ $ ( 2,268 ) ​ $ 79,283 ​ $ ( 14,223 ) ​ $ 102,767 ​ $ ( 16,491 ) Obligations of states and political subdivisions ​ ​ 10,026 ​ ​ ( 388 ) ​ ​ 17,609 ​ ​ ( 4,539 ) ​ ​ 27,635 ​ ​ ( 4,927 ) Corporate securities ​ ​ 14,828 ​ ​ ( 1,172 ) ​ ​ — ​ ​ — ​ ​ 14,828 ​ ​ ( 1,172 ) Collateralized loan obligations ​ ​ — ​ ​ — ​ ​ 4,876 ​ ​ ( 146 ) ​ ​ 4,876 ​ ​ ( 146 ) Residential government-sponsored collateralized mortgage obligations ​ ​ 22,343 ​ ​ ( 1,375 ) ​ ​ 4,252 ​ ​ ( 673 ) ​ ​ 26,595 ​ ​ ( 2,048 ) Government-sponsored agency securities ​ 1,484 ​ ( 16 ) ​ 13,132 ​ ( 3,087 ) ​ 14,616 ​ ( 3,103 ) Agency commercial mortgage-backed securities ​ 13,031 ​ ( 371 ) ​ 24,386 ​ ( 4,392 ) ​ 37,417 ​ ( 4,763 ) SBA pool securities ​ 529 ​ ( 38 ) ​ 3,243 ​ ( 49 ) ​ 3,772 ​ ( 87 ) Total ​ $ 85,725 ​ $ ( 5,628 ) ​ $ 146,781 ​ $ ( 27,109 ) ​ $ 232,506 ​ $ ( 32,737 ) ​ 17 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 Months or More ​ Total December 31, 2022 Fair Unrecognized Fair Unrecognized Fair Unrecognized Held-to-Maturity ​ value ​ Losses ​ value ​ Losses ​ value ​ Losses Residential government-sponsored mortgage-backed securities ​ $ 9,457 ​ $ ( 1,002 ) ​ $ 58 ​ $ ( 5 ) ​ $ 9,515 ​ $ ( 1,007 ) Obligations of states and political subdivisions ​ 1,255 ​ ( 46 ) ​ — ​ — ​ 1,255 ​ ( 46 ) Residential government-sponsored collateralized mortgage obligations ​ 75 ​ ( 4 ) ​ 181 ​ ( 17 ) ​ 256 ​ ( 21 ) Total ​ $ 10,787 ​ $ ( 1,052 ) ​ $ 239 ​ $ ( 22 ) ​ $ 11,026 ​ $ ( 1,074 ) ​ Changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2023 and 2022 are shown in the tables below. All amounts are net of tax (in thousands). ​ ​ ​ ​ ​ ​ Unrealized Holding ​ ​ Gains (Losses) on For the three months ended June 30, 2023 Available-for-Sale Beginning balance ​ $ ( 23,475 ) Current period other comprehensive income (loss) ​ ( 2,606 ) Ending balance ​ $ ( 26,081 ) ​ ​ ​ ​ ​ ​ ​ Unrealized Holding ​ ​ Gains (Losses) on For the three months ended June 30, 2022 ​ Available-for-Sale Beginning balance ​ $ ( 9,455 ) Current period other comprehensive income (loss) ​ ( 8,471 ) Ending balance ​ $ ( 17,926 ) ​ ​ ​ ​ ​ ​ ​ Unrealized Holding ​ ​ Gains (Losses) on For the six months ended June 30, 2023 ​ Available-for-Sale Beginning balance ​ $ ( 25,850 ) Current period other comprehensive income (loss) ​ ( 231 ) Ending balance ​ $ ( 26,081 ) ​ ​ ​ ​ ​ ​ ​ Unrealized Holding ​ ​ Gains (Losses) on For the six months ended June 30, 2022 ​ Available-for-Sale Beginning balance ​ $ 1,112 Current period other comprehensive income (loss) ​ ( 19,038 ) Ending balance ​ $ ( 17,926 ) ​ ​ 18 Table of Contents 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (Revised and Restated) The following table summarizes the composition of our loan portfolio as of June 30, 2023 and December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 December 31, 2022 Loans held for sale ​ $ 57,704 ​ $ 27,626 Loans held for investment ​ ​ ​ ​ ​ ​ Loans secured by real estate: ​ ​ ​ ​ ​ Commercial real estate - owner occupied (1) ​ $ 454,067 ​ $ 459,866 Commercial real estate - non-owner occupied ​ 595,805 ​ 579,733 Secured by farmland ​ 5,271 ​ 5,970 Construction and land development ​ 175,073 ​ 148,690 Residential 1-4 family ​ 591,938 ​ 609,694 Multi-family residential ​ 133,754 ​ 140,321 Home equity lines of credit ​ 62,808 ​ 65,152 Total real estate loans ​ 2,018,716 ​ 2,009,426 ​ ​ ​ ​ ​ ​ ​ Commercial loans (2) ​ 598,305 ​ 520,741 Paycheck Protection Program loans ​ ​ 2,143 ​ ​ 4,564 Consumer loans ​ 567,755 ​ 405,278 Total Non-PCD loans ​ 3,186,919 ​ 2,940,009 PCD loans ​ ​ 6,049 ​ ​ 6,628 Total loans held for investment ​ $ 3,192,968 ​ $ 2,946,637 ​ ​ ​ ​ ​ ​ ​ 1 Includes $ 6.7 million related to loans collateralizing secured borrowings. 2 Includes $ 14.0 million related to loans collateralizing secured borrowings. ​ Accrued Interest Receivable Accrued interest receivable on loans totaled $ 13.5 million and $ 10.8 million at June 30, 2023 and December 31, 2022, 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. ​ 19 Table of Contents The following tables present the aging of the recorded investment in past due loans by class of loans held for investment as of June 30, 2023 and December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30 - 59 60 - 89 90 ​ ​ ​ ​ ​ ​ ​ ​ Days ​ Days ​ Days ​ Total ​ Loans Not ​ Total June 30, 2023 ​ Past Due ​ Past Due ​ or More ​ Past Due ​ Past Due ​ Loans Commercial real estate - owner occupied ​ $ 83 ​ $ 53 ​ $ — ​ $ 136 ​ $ 453,931 ​ $ 454,067 Commercial real estate - non-owner occupied ​ — ​ — ​ ​ 19,187 ​ 19,187 ​ 576,618 ​ 595,805 Secured by farmland ​ ​ 2 ​ ​ — ​ ​ 503 ​ ​ 505 ​ ​ 4,766 ​ ​ 5,271 Construction and land development ​ 41 ​ ​ — ​ ​ — ​ ​ 41 ​ ​ 175,032 ​ 175,073 Residential 1-4 family ​ 2,277 ​ ​ 904 ​ ​ 715 ​ ​ 3,896 ​ ​ 588,042 ​ 591,938 Multi- family residential ​ ​ 101 ​ ​ — ​ ​ — ​ ​ 101 ​ ​ 133,653 ​ ​ 133,754 Home equity lines of credit ​ 670 ​ ​ 294 ​ 254 ​ ​ 1,218 ​ ​ 61,590 ​ 62,808 Commercial loans ​ ​ 10,437 ​ ​ 184 ​ ​ 1,371 ​ ​ 11,992 ​ ​ 586,313 ​ ​ 598,305 Paycheck Protection Program loans ​ ​ 7 ​ ​ — ​ ​ 1,775 ​ ​ 1,782 ​ ​ 361 ​ ​ 2,143 Consumer loans ​ 2,628 ​ ​ 1,872 ​ ​ 129 ​ 4,629 ​ 563,126 ​ 567,755 Total Non-PCD loans ​ ​ 16,246 ​ ​ 3,307 ​ ​ 23,934 ​ ​ 43,487 ​ ​ 3,143,432 ​ ​ 3,186,919 PCD loans ​ ​ 443 ​ ​ — ​ ​ 1,242 ​ ​ 1,685 ​ ​ 4,364 ​ ​ 6,049 Total ​ $ 16,689 ​ $ 3,307 ​ $ 25,176 ​ $ 45,172 ​ $ 3,147,796 ​ $ 3,192,968 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30 - 59 60 - 89 90 ​ ​ ​ ​ ​ ​ ​ ​ Days ​ Days ​ Days ​ Total ​ Loans Not ​ Total ​ December 31, 2022 ​ Past Due ​ Past Due ​ or More ​ Past Due ​ Past Due ​ Loans ​ Commercial real estate - owner occupied ​ $ 55 ​ $ — ​ $ — ​ $ 55 ​ $ 459,811 ​ $ 459,866 ​ Commercial real estate - non-owner occupied ​ 290 ​ 169 ​ ​ 19,641 ​ 20,100 ​ 559,633 ​ 579,733 ​ Secured by farmland ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,970 ​ ​ 5,970 ​ Construction and land development ​ 46 ​ ​ — ​ ​ — ​ ​ 46 ​ ​ 148,644 ​ 148,690 ​ Residential 1-4 family ​ 2,180 ​ ​ 410 ​ ​ 304 ​ ​ 2,894 ​ ​ 606,800 ​ 609,694 ​ Multi- family residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 140,321 ​ ​ 140,321 ​ Home equity lines of credit ​ 431 ​ ​ 96 ​ 249 ​ ​ 776 ​ ​ 64,376 ​ 65,152 ​ Commercial loans ​ ​ 39 ​ ​ — ​ ​ 2,956 ​ ​ 2,995 ​ ​ 517,746 ​ ​ 520,741 ​ Paycheck Protection Program loans ​ ​ 16 ​ ​ 15 ​ ​ 3,360 ​ ​ 3,391 ​ ​ 1,173 ​ ​ 4,564 ​ Consumer loans ​ 2,079 ​ ​ 1,421 ​ ​ 200 ​ 3,700 ​ 401,578 ​ 405,278 ​ Total Non-PCD loans ​ ​ 5,136 ​ ​ 2,111 ​ ​ 26,710 ​ ​ 33,957 ​ ​ 2,906,052 ​ ​ 2,940,009 ​ PCD loans ​ ​ — ​ ​ — ​ ​ 1,328 ​ ​ 1,328 ​ ​ 5,300 ​ ​ 6,628 ​ Total ​ $ 5,136 ​ $ 2,111 ​ $ 28,038 ​ $ 35,285 ​ $ 2,911,352 ​ $ 2,946,637 ​ ​ ​ 20 Table of Contents The amortized cost, by class, of loans and leases on nonaccrual status at June 30, 2023 and December 31, 2022, were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 ​ Less Than Total Nonaccrual With ​ ​ Days ​ ​ 90 Days ​ Nonaccrual ​ No Credit June 30, 2023 ​ or More ​ ​ Past Due ​ Loans ​ Loss Allowance Commercial real estate - owner occupied ​ $ — ​ $ 491 ​ $ 491 ​ $ 491 Commercial real estate - non-owner occupied ​ 19,187 ​ — ​ 19,187 ​ 1,323 Secured by farmland ​ ​ 503 ​ ​ 2 ​ ​ 505 ​ ​ 505 Construction and land development ​ — ​ 26 ​ 26 ​ 26 Residential 1-4 family ​ 715 ​ 529 ​ 1,244 ​ 1,244 Home equity lines of credit ​ ​ 254 ​ ​ 276 ​ ​ 530 ​ ​ 530 Commercial loans ​ 1,371 ​ 60 ​ 1,431 ​ 61 Paycheck Protection Program loans ​ ​ 61 ​ ​ — ​ ​ 61 ​ ​ 61 Consumer loans ​ 129 ​ 444 ​ 573 ​ 573 Total Non-PCD loans ​ ​ 22,220 ​ ​ 1,828 ​ ​ 24,048 ​ ​ 4,814 PCD loans ​ ​ 1,242 ​ ​ — ​ ​ 1,242 ​ ​ 1,242 Total ​ $ 23,462 ​ $ 1,828 ​ $ 25,290 ​ $ 6,056 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 ​ Less Than Total Nonaccrual With ​ ​ Days ​ ​ 90 Days ​ Nonaccrual ​ No Credit December 31, 2022 ​ or More ​ ​ Past Due ​ Loans ​ Loss Allowance Commercial real estate - owner occupied ​ $ — ​ $ 509 ​ $ 509 ​ $ 509 Commercial real estate - non-owner occupied ​ 19,641 ​ — ​ 19,641 ​ 19,641 Secured by farmland ​ ​ — ​ ​ 713 ​ ​ 713 ​ ​ 713 Construction and land development ​ — ​ 29 ​ 29 ​ 29 Residential 1-4 family ​ 304 ​ 8,995 ​ 9,299 ​ 9,299 Home equity lines of credit ​ ​ 249 ​ ​ 301 ​ ​ 550 ​ ​ 550 Commercial loans ​ 2,956 ​ 121 ​ 3,077 ​ 121 Paycheck Protection Program loans ​ ​ — ​ ​ 4 ​ ​ 4 ​ ​ 4 Consumer loans ​ 200 ​ 134 ​ 334 ​ 299 Total Non-PCD loans ​ ​ 23,350 ​ ​ 10,806 ​ ​ 34,156 ​ ​ 31,165 PCD loans ​ ​ 1,328 ​ ​ — ​ ​ 1,328 ​ ​ 1,328 Total ​ $ 24,678 ​ $ 10,806 ​ $ 35,484 ​ $ 32,493 ​ There were $ 1.7 million and $ 3.4 million of Paycheck Protection Program (“PPP”) loans greater than 90 days past due and still accruing at June 30, 2023 and December 31, 2022, respectively . ​ 21 Table of Contents The following table presents nonaccrual loans as of June 30, 2023 by class and year of origination (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Converted ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 2019 ​ Prior ​ Loans ​ To Term Total Commercial real estate - owner occupied ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 491 ​ $ — ​ $ — ​ $ 491 Commercial real estate - non-owner occupied ​ — ​ — ​ ​ ​ — ​ — ​ 19,187 ​ — ​ — ​ 19,187 Secured by farmland ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2 ​ ​ 503 ​ ​ — ​ ​ — ​ ​ 505 Construction and land development ​ — ​ — ​ — ​ — ​ — ​ 26 ​ — ​ — ​ 26 Residential 1-4 family ​ ​ — ​ ​ ​ ​ — ​ ​ — ​ ​ — ​ ​ 981 ​ ​ — ​ ​ 263 ​ ​ 1,244 Home equity lines of credit ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 54 ​ ​ 457 ​ ​ 19 ​ ​ 530 Commercial loans ​ — ​ — ​ — ​ 3 ​ — ​ 1,428 ​ — ​ — ​ 1,431 Paycheck Protection Program loans ​ — ​ — ​ — ​ 61 ​ — ​ — ​ — ​ — ​ 61 Consumer loans ​ ​ — ​ 379 ​ ​ 194 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 573 Total non-PCD nonaccruals ​ ​ — ​ ​ 379 ​ ​ 194 ​ ​ 64 ​ ​ 2 ​ ​ 22,670 ​ ​ 457 ​ ​ 282 ​ ​ 24,048 PCD loans ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,242 ​ ​ — ​ ​ — ​ ​ 1,242 Total nonaccrual loans ​ $ — ​ $ 379 ​ $ 194 ​ $ 64 ​ $ 2 ​ $ 23,912 ​ $ 457 ​ $ 282 ​ $ 25,290 ​ Interest received on nonaccrual loans was zero and $ 0.1 million for the three months ended June 30, 2023 and 2022, respectively and $ 0.01 million and $ 0.3 million for the six months ended June 30, 2023 and 2022, respectively. 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 reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity. 22 Table of Contents For the quarter ended June 30, 2023, two loans from our owner occupied commercial real estate loan portfolio with an amortized cost basis of $ 0.4 million, were modified for a borrower experiencing financial difficulty. This modification resulted in reamortization of the balance of the notes over a 25 year period, while maintaining the original maturity dates of February and July 2027, respectively. Contractual payments for both notes, prior to modification, for the three month period would have totaled $ 0.03 million. The modified loans had no payment delinquencies in the second quarter of 2023 and represents 0.09 % of our total owner occupied commercial real estate loans. An existing modification performed in the first quarter of 2023, and was comprised of one loan with a $ 0.9 million amortized cost, which will resume contractual payments in August 2023. This existing modification has had no payment delinquencies since its modification and accounts for only 0.15 % of our total 1-4 family residential loans. 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. 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 and improbable. Primis had no loans classified as Doubtful at June 30, 2023 or December 31, 2022. 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. ​ 23 Table of Contents The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of June 30, 2023 (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Converted ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 2019 ​ Prior ​ Loans ​ To Term Total Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 26,032 ​ $ 91,578 ​ $ 61,730 ​ $ 18,444 ​ $ 21,553 ​ $ 214,548 ​ $ 2,832 ​ $ 6,821 ​ $ 443,538 Special Mention ​ ​ — ​ ​ — ​ ​ 220 ​ ​ — ​ ​ — ​ ​ 5,081 ​ ​ — ​ ​ — ​ ​ 5,301 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 97 ​ ​ 5,131 ​ ​ — ​ ​ — ​ ​ 5,228 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 26,032 ​ $ 91,578 ​ $ 61,950 ​ $ 18,444 ​ $ 21,650 ​ $ 224,760 ​ $ 2,832 ​ $ 6,821 ​ $ 454,067 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ 3.49 ​ ​ 3.31 ​ ​ 3.44 ​ ​ 3.39 ​ ​ 3.28 ​ ​ 3.53 ​ ​ 3.66 ​ ​ 3.97 ​ ​ 3.46 Commercial real estate - nonowner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,472 ​ $ 59,088 ​ $ 120,978 ​ $ 43,528 ​ $ 41,039 ​ $ 281,105 ​ $ 1,884 ​ $ 5,085 ​ $ 554,179 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,548 ​ ​ — ​ ​ 20,291 ​ ​ — ​ ​ 601 ​ ​ 22,440 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 19,186 ​ ​ — ​ ​ — ​ ​ 19,186 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 1,472 ​ $ 59,088 ​ $ 120,978 ​ $ 45,076 ​ $ 41,039 ​ $ 320,582 ​ $ 1,884 ​ $ 5,686 ​ $ 595,805 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ 3.15 ​ ​ 3.27 ​ ​ 3.08 ​ ​ 3.83 ​ ​ 3.95 ​ ​ 3.84 ​ ​ 2.86 ​ ​ 3.21 ​ ​ 3.63 Secured by farmland ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 514 ​ $ — ​ $ 13 ​ $ 108 ​ $ — ​ $ 3,627 ​ $ 328 ​ $ 176 ​ $ 4,766 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2 ​ ​ 503 ​ ​ — ​ ​ — ​ ​ 505 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 514 ​ $ — ​ $ 13 ​ $ 108 ​ $ 2 ​ $ 4,130 ​ $ 328 ​ $ 176 ​ $ 5,271 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ N/A ​ ​ N/A ​ ​ 4.00 ​ ​ 4.00 ​ ​ 6.00 ​ ​ 4.02 ​ ​ 3.92 ​ ​ 3.12 ​ ​ 3.97 Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 15,392 ​ $ 61,912 ​ $ 71,105 ​ $ 544 ​ $ 2,522 ​ $ 21,805 ​ $ 807 ​ $ 9 ​ $ 174,096 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 951 ​ ​ — ​ ​ — ​ ​ 951 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 26 ​ ​ — ​ ​ — ​ ​ 26 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 15,392 ​ $ 61,912 ​ $ 71,105 ​ $ 544 ​ $ 2,522 ​ $ 22,782 ​ $ 807 ​ $ 9 ​ $ 175,073 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ 3.55 ​ ​ 3.21 ​ ​ 3.39 ​ ​ 3.39 ​ ​ 3.29 ​ ​ 3.57 ​ ​ 3.37 ​ ​ 4.00 ​ ​ 3.36 Residential 1-4 family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 12,664 ​ $ 153,892 ​ $ 154,811 ​ $ 42,560 ​ $ 57,486 ​ $ 162,489 ​ $ 1,908 ​ $ 2,736 ​ $ 588,546 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 179 ​ ​ — ​ ​ — ​ ​ 179 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 118 ​ ​ 2,363 ​ ​ — ​ ​ 732 ​ ​ 3,213 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 12,664 ​ $ 153,892 ​ $ 154,811 ​ $ 42,560 ​ $ 57,604 ​ $ 165,031 ​ $ 1,908 ​ $ 3,468 ​ $ 591,938 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 94 ​ $ — ​ $ — ​ $ — ​ $ 94 Weighted average risk grade ​ ​ 3.16 ​ ​ 3.08 ​ ​ 3.04 ​ ​ 3.07 ​ ​ 3.07 ​ ​ 3.22 ​ ​ 3.92 ​ ​ 3.64 ​ ​ 3.12 Multi- family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ 8,257 ​ $ 21,678 ​ $ 18,045 ​ $ 6,997 ​ $ 76,520 ​ $ 649 ​ $ 648 ​ $ 132,794 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 669 ​ ​ — ​ ​ 291 ​ ​ 960 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ 8,257 ​ $ 21,678 ​ $ 18,045 ​ $ 6,997 ​ $ 77,189 ​ $ 649 ​ $ 939 ​ $ 133,754 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ N/A ​ ​ 3.69 ​ ​ 3.00 ​ ​ 3.90 ​ ​ 3.00 ​ ​ 3.41 ​ ​ 4.00 ​ ​ 4.62 ​ ​ 3.42 Home equity lines of credit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 75 ​ $ 492 ​ $ 423 ​ $ 50 ​ $ 52 ​ $ 3,201 ​ $ 57,009 ​ $ 880 ​ $ 62,182 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 54 ​ ​ 553 ​ ​ 19 ​ ​ 626 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 75 ​ $ 492 ​ $ 423 ​ $ 50 ​ $ 52 ​ $ 3,255 ​ $ 57,562 ​ $ 899 ​ $ 62,808 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.89 ​ ​ 3.05 ​ ​ 3.93 ​ ​ 3.11 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 123,570 ​ $ 290,981 ​ $ 54,530 ​ $ 6,648 ​ $ 2,888 ​ $ 28,008 ​ $ 81,285 ​ $ 6,947 ​ $ 594,857 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 12 ​ ​ 144 ​ ​ — ​ ​ 1,311 ​ ​ 360 ​ ​ 1,827 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 3 ​ ​ 66 ​ ​ 1,552 ​ ​ — ​ ​ — ​ ​ 1,621 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 123,570 ​ $ 290,981 ​ $ 54,530 ​ $ 6,663 ​ $ 3,098 ​ $ 29,560 ​ $ 82,596 ​ $ 7,307 ​ $ 598,305 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 1,590 ​ $ — ​ $ — ​ $ 1,590 Weighted average risk grade ​ ​ 2.74 ​ ​ 3.01 ​ ​ 3.36 ​ ​ 3.36 ​ ​ 3.98 ​ ​ 3.47 ​ ​ 3.20 ​ ​ 3.82 ​ ​ 3.06 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Converted ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 2019 ​ Prior ​ Loans ​ To Term Total Paycheck Protection Program loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ — ​ $ 1,115 ​ $ 967 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 2,082 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 61 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 61 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ — ​ $ 1,115 ​ $ 1,028 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 2,143 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ ​ ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ N/A ​ ​ N/A ​ ​ 2.00 ​ ​ 2.24 ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ 2.11 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 279,034 ​ $ 249,363 ​ $ 26,879 ​ $ 1,209 ​ $ 200 ​ $ 4,176 ​ $ 5,872 ​ $ 186 ​ $ 566,919 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 67 ​ ​ — ​ ​ — ​ ​ 67 Substandard ​ ​ — ​ ​ 382 ​ ​ 387 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 769 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 279,034 ​ $ 249,745 ​ $ 27,266 ​ $ 1,209 ​ $ 200 ​ $ 4,243 ​ $ 5,872 ​ $ 186 ​ $ 567,755 Current period gross charge offs ​ $ — ​ $ 3,729 ​ $ 751 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 4,480 Weighted average risk grade ​ ​ 3.50 ​ ​ 2.70 ​ ​ 3.67 ​ ​ 3.99 ​ ​ 3.97 ​ ​ 4.02 ​ ​ 2.93 ​ ​ 4.00 ​ ​ 3.16 PCD ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 2,908 ​ $ — ​ $ — ​ $ 2,908 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,618 ​ ​ — ​ ​ — ​ ​ 1,618 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,523 ​ ​ — ​ ​ — ​ ​ 1,523 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 6,049 ​ $ — ​ $ — ​ $ 6,049 Current period gross charge offs ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Weighted average risk grade ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ 4.67 ​ ​ N/A ​ ​ N/A ​ ​ 4.67 Total ​ $ 458,753 ​ $ 915,945 ​ $ 513,869 ​ $ 133,727 ​ $ 133,164 ​ $ 857,581 ​ $ 154,438 ​ $ 25,491 ​ $ 3,192,968 Current period gross charge offs ​ $ — ​ $ 3,729 ​ $ 751 ​ $ — ​ $ 94 ​ $ 1,590 ​ $ — ​ $ — ​ $ 6,164 Weighted average risk grade ​ ​ 3.29 ​ ​ 3.00 ​ ​ 3.21 ​ ​ 3.50 ​ ​ 3.40 ​ ​ 3.59 ​ ​ 3.16 ​ ​ 3.73 ​ ​ 3.29 ​ ​ 25 Table of Contents The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Converted ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ 2019 2018 ​ Prior ​ Loans ​ To Term Total Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 116,545 ​ $ 58,202 ​ $ 19,178 ​ $ 21,985 ​ $ 27,397 ​ $ 202,484 ​ $ 3,389 ​ $ 6,740 ​ $ 455,920 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 988 ​ ​ — ​ ​ — ​ ​ 988 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,958 ​ ​ — ​ ​ — ​ ​ 2,958 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 116,545 ​ $ 58,202 ​ $ 19,178 ​ $ 21,985 ​ $ 27,397 ​ $ 206,430 ​ $ 3,389 ​ $ 6,740 ​ $ 459,866 Weighted average risk grade ​ ​ 3.25 ​ ​ 3.45 ​ ​ 3.38 ​ ​ 3.27 ​ ​ 3.43 ​ ​ 3.50 ​ ​ 3.52 ​ ​ 3.96 ​ ​ 3.42 Commercial real estate - nonowner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 28,128 ​ $ 126,291 ​ $ 44,696 ​ $ 41,631 ​ $ 55,702 ​ $ 228,735 ​ $ 4,173 ​ $ 3,065 ​ $ 532,421 Special Mention ​ ​ — ​ ​ — ​ ​ 1,566 ​ ​ — ​ ​ 926 ​ ​ 24,580 ​ ​ — ​ ​ 601 ​ ​ 27,673 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 13,066 ​ ​ 6,573 ​ ​ — ​ ​ — ​ ​ 19,639 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 28,128 ​ $ 126,291 ​ $ 46,262 ​ $ 41,631 ​ $ 69,694 ​ $ 259,888 ​ $ 4,173 ​ $ 3,666 ​ $ 579,733 Weighted average risk grade ​ ​ 3.36 ​ ​ 3.16 ​ ​ 3.82 ​ ​ 3.95 ​ ​ 4.01 ​ ​ 3.82 ​ ​ 2.87 ​ ​ 3.33 ​ ​ 3.68 Secured by farmland ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 141 ​ $ 16 ​ $ 110 ​ $ — ​ $ — ​ $ 3,425 ​ $ 551 ​ $ 85 ​ $ 4,328 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 649 ​ ​ — ​ ​ 112 ​ ​ 761 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ 6 ​ ​ — ​ ​ 875 ​ ​ — ​ ​ — ​ ​ 881 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 141 ​ $ 16 ​ $ 110 ​ $ 6 ​ $ — ​ $ 4,949 ​ $ 551 ​ $ 197 ​ $ 5,970 Weighted average risk grade ​ ​ 4.00 ​ ​ 4.00 ​ ​ 4.00 ​ ​ 6.00 ​ ​ N/A ​ ​ 4.20 ​ ​ 3.98 ​ ​ 3.70 ​ ​ 4.13 Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 44,253 ​ $ 73,226 ​ $ 847 ​ $ 3,006 ​ $ 6,937 ​ $ 19,553 ​ $ 822 ​ $ 17 ​ $ 148,661 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 29 ​ ​ — ​ ​ — ​ ​ 29 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 44,253 ​ $ 73,226 ​ $ 847 ​ $ 3,006 ​ $ 6,937 ​ $ 19,582 ​ $ 822 ​ $ 17 ​ $ 148,690 Weighted average risk grade ​ ​ 3.21 ​ ​ 3.06 ​ ​ 3.60 ​ ​ 3.42 ​ ​ 3.17 ​ ​ 3.69 ​ ​ 3.36 ​ ​ 4.00 ​ ​ 3.20 Residential 1-4 family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 152,178 ​ $ 157,233 ​ $ 43,812 ​ $ 61,268 ​ $ 40,707 ​ $ 138,782 ​ $ 1,837 ​ $ 3,437 ​ $ 599,254 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 30 ​ ​ — ​ ​ — ​ ​ 30 Substandard ​ ​ 285 ​ ​ — ​ ​ — ​ ​ 8,099 ​ ​ — ​ ​ 1,310 ​ ​ — ​ ​ 716 ​ ​ 10,410 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 152,463 ​ $ 157,233 ​ $ 43,812 ​ $ 69,367 ​ $ 40,707 ​ $ 140,122 ​ $ 1,837 ​ $ 4,153 ​ $ 609,694 Weighted average risk grade ​ ​ 3.09 ​ ​ 3.04 ​ ​ 3.07 ​ ​ 3.41 ​ ​ 3.13 ​ ​ 3.23 ​ ​ 3.92 ​ ​ 3.54 ​ ​ 3.15 Multi- family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 9,953 ​ $ 21,927 ​ $ 18,338 ​ $ 7,064 ​ $ 1,804 ​ $ 75,370 ​ $ 4,192 ​ $ 676 ​ $ 139,324 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 702 ​ ​ — ​ ​ 295 ​ ​ 997 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 9,953 ​ $ 21,927 ​ $ 18,338 ​ $ 7,064 ​ $ 1,804 ​ $ 76,072 ​ $ 4,192 ​ $ 971 ​ $ 140,321 Weighted average risk grade ​ ​ 3.58 ​ ​ 3.00 ​ ​ 3.90 ​ ​ 3.00 ​ ​ 3.21 ​ ​ 3.31 ​ ​ 4.00 ​ ​ 4.61 ​ ​ 3.37 Home equity lines of credit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 463 ​ $ 431 ​ $ 52 ​ $ 63 ​ $ 230 ​ $ 4,093 ​ $ 58,312 ​ $ 957 ​ $ 64,601 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 54 ​ ​ 476 ​ ​ 21 ​ ​ 551 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 463 ​ $ 431 ​ $ 52 ​ $ 63 ​ $ 230 ​ $ 4,147 ​ $ 58,788 ​ $ 978 ​ $ 65,152 Weighted average risk grade ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.00 ​ ​ 3.94 ​ ​ 3.05 ​ ​ 3.89 ​ ​ 3.12 Commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 295,459 ​ $ 59,642 ​ $ 6,768 ​ $ 6,369 ​ $ 9,228 ​ $ 20,883 ​ $ 100,207 ​ $ 17,381 ​ $ 515,937 Special Mention ​ ​ — ​ ​ 396 ​ ​ 64 ​ ​ 74 ​ ​ — ​ ​ — ​ ​ 519 ​ ​ 388 ​ ​ 1,441 Substandard ​ ​ — ​ ​ — ​ ​ 5 ​ ​ 90 ​ ​ — ​ ​ 1,678 ​ ​ 1,590 ​ ​ — ​ ​ 3,363 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 295,459 ​ $ 60,038 ​ $ 6,837 ​ $ 6,533 ​ $ 9,228 ​ $ 22,561 ​ $ 102,316 ​ $ 17,769 ​ $ 520,741 Weighted average risk grade ​ ​ 3.14 ​ ​ 3.41 ​ ​ 3.38 ​ ​ 3.90 ​ ​ 3.42 ​ ​ 3.70 ​ ​ 3.47 ​ ​ 3.33 ​ ​ 3.29 Paycheck Protection Program loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ 2,119 ​ $ 2,435 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 4,554 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ 10 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 10 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ 2,129 ​ $ 2,435 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 4,564 Weighted average risk grade ​ ​ N/A ​ ​ 2.02 ​ ​ 2.00 ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ 2.01 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 26 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ Converted ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ 2019 2018 ​ Prior ​ Loans ​ To Term Total Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 365,842 ​ $ 29,184 ​ $ 1,493 ​ $ 340 ​ $ 534 ​ $ 4,319 ​ $ 2,918 ​ $ — ​ $ 404,630 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 65 ​ ​ — ​ ​ — ​ ​ 65 Substandard ​ ​ 70 ​ ​ 513 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 583 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 365,912 ​ $ 29,697 ​ $ 1,493 ​ $ 340 ​ $ 534 ​ $ 4,384 ​ $ 2,918 ​ $ — ​ $ 405,278 Weighted average risk grade ​ ​ 3.24 ​ ​ 3.74 ​ ​ 3.99 ​ ​ 3.98 ​ ​ 4.00 ​ ​ 4.02 ​ ​ 3.81 ​ ​ N/A ​ ​ 3.30 PCD ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 3,692 ​ $ — ​ $ — ​ $ 3,692 Special Mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,320 ​ ​ — ​ ​ — ​ ​ 1,320 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,616 ​ ​ — ​ ​ — ​ ​ 1,616 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 6,628 ​ $ — ​ $ — ​ $ 6,628 Weighted average risk grade ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ N/A ​ ​ 4.54 ​ ​ N/A ​ ​ N/A ​ ​ 4.54 Total ​ $ 1,013,317 ​ $ 529,190 ​ $ 139,364 ​ $ 149,995 ​ $ 156,531 ​ $ 744,763 ​ $ 178,986 ​ $ 34,491 ​ $ 2,946,637 Weighted average risk grade ​ ​ 3.20 ​ ​ 3.19 ​ ​ 3.48 ​ ​ 3.54 ​ ​ 3.60 ​ ​ 3.57 ​ ​ 3.35 ​ ​ 3.53 ​ ​ 3.36 ​ Revolving loans that converted to term during the reported periods were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended June 30, 2023 ​ ​ For the six months ended June 30, 2023 Commercial real estate - owner occupied ​ $ 214 ​ ​ $ 214 Commercial real estate - non-owner occupied ​ ​ — ​ ​ ​ 2,057 Secured by farmland ​ ​ — ​ ​ ​ — Construction and land development ​ — ​ ​ — Residential 1-4 family ​ ​ 142 ​ ​ ​ 142 Multi- family residential ​ ​ — ​ ​ ​ — Home equity lines of credit ​ ​ — ​ ​ ​ — Commercial loans ​ — ​ ​ 186 Paycheck Protection Program loans ​ ​ — ​ ​ ​ — Consumer loans ​ — ​ ​ — Total loans ​ $ 356 ​ ​ $ 2,599 ​ The recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure was $ 0.3 million and $ 0.1 million at June 30, 2023 and December 31, 2022, respectively. Allowance For Credit Losses – Loans The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance represents management's best estimate of current expected credit losses on loans considering available information, from internal and external sources, relevant to assessing collectability over the loans' contractual terms, adjusted for expected prepayments when appropriate. In calculating the allowance for credit losses, most loans are segmented into pools based upon similar characteristics and risk profiles. For allowance modeling purposes, our loan pools include but are not limited to (i) commercial real estate - owner occupied, (ii) commercial real estate - non-owner occupied, (iii) construction and land development, (iv) commercial, (v) agricultural loans, (vi) residential 1-4 family and (vii) consumer loans. We periodically reassess each pool to ensure the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary. For each loan pool, we measure expected credit losses over the life of each loan utilizing a combination of inputs: (i) probability of default, (ii) probability of attrition, (iii) loss given default and (iv) exposure at default. Internal data is supplemented by, but not replaced by, peer data when required, primarily to determine the probability of default input. The various pool-specific inputs may be adjusted for current macroeconomic assumptions. 27 Table of Contents Significant macroeconomic variables utilized in our allowance models include, among other things, (i) VA Gross Domestic Product, (ii) VA House Price Index, and (iii) VA unemployment rates. Management qualitatively adjusts allowance model results for risk factors that are not considered within our quantitative modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. Qualitative factor (“Q-Factor”) adjustments are driven by key risk indicators that management tracks on a pool-by-pool basis. In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. The following tables present details of the allowance for credit losses on loans segregated by loan portfolio segment as of June 30, 2023 and December 31, 2022, calculated in accordance with the current expected credit losses (“CECL”) methodology (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Commercial ​ ​ ​ ​ ​ ​ ​ ​ Home ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner ​ Non-owner ​ Secured by ​ and Land ​ 1-4 Family ​ Multi-Family ​ Lines Of ​ Commercial ​ Consumer ​ PCD ​ ​ June 30, 2023 ​ Occupied ​ Occupied ​ Farmland ​ Development ​ Residential ​ Residential ​ Credit ​ Loans ​ Loans ​ Loans ​ Total Modeled expected credit losses ​ $ 4,799 ​ $ 6,360 ​ $ 3 ​ $ 914 ​ $ 4,067 ​ $ 1,641 ​ $ 307 ​ $ 5,300 ​ $ 7,011 ​ $ — ​ $ 30,402 Q-factor and other qualitative adjustments ​ ​ 268 ​ ​ 625 ​ ​ 29 ​ ​ 372 ​ ​ 385 ​ ​ 352 ​ ​ 19 ​ ​ 855 ​ ​ 5 ​ ​ — ​ ​ 2,910 Specific allocations ​ — ​ ​ 2,454 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 843 ​ ​ — ​ ​ 1,932 ​ 5,229 Total ​ $ 5,067 ​ $ 9,439 ​ $ 32 ​ $ 1,286 ​ $ 4,452 ​ $ 1,993 ​ $ 326 ​ $ 6,998 ​ $ 7,016 ​ $ 1,932 ​ $ 38,541 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Commercial ​ ​ ​ ​ ​ ​ ​ ​ Home ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate ​ Real Estate ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner ​ Non-owner ​ Secured by ​ and Land ​ 1-4 Family ​ Multi-Family ​ Lines Of ​ Commercial ​ Consumer ​ PCD ​ ​ December 31, 2022 ​ Occupied ​ Occupied ​ Farmland ​ Development ​ Residential ​ Residential ​ Credit ​ Loans ​ Loans ​ Loans ​ Total Modeled expected credit losses ​ $ 5,297 $ 6,652 $ 4 $ 997 $ 3,579 $ 1,814 $ 310 $ 5,006 $ 3,851 $ — ​ $ 27,510 Q-factor and other qualitative adjustments ​ ​ 261 ​ ​ 495 ​ ​ 21 ​ ​ 376 ​ ​ 512 ​ ​ 387 ​ ​ 19 ​ ​ 654 ​ ​ 2 ​ ​ — ​ ​ 2,727 Specific allocations ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,193 ​ ​ 42 ​ ​ 2,072 ​ 4,307 Total ​ $ 5,558 ​ $ 7,147 ​ $ 25 ​ $ 1,373 ​ $ 4,091 ​ $ 2,201 ​ $ 329 ​ $ 7,853 ​ $ 3,895 ​ $ 2,072 ​ $ 34,544 ​ No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the SBA. ​ 28 Table of Contents Activity in the allowance for credit losses by class of loan for the three months ended June 30, 2023 and 2022 is summarized below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate ​ Construction ​ ​ ​ ​ Home Equity ​ ​ ​ ​ ​ ​ ​ Owner Non-owner Secured by and Land 1-4 Family Multi-Family Lines Of Commercial Consumer PCD ​ Three Months Ended June 30, 2023 Occupied Occupied Farmland Development Residential Residential Credit Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance $ 5,304 $ 7,161 $ 21 $ 1,280 $ 4,343 $ 2,087 $ 350 $ 6,510 $ 6,802 $ 1,945 $ 35,803 Provision (recovery) ​ ( 237 ) 2,278 11 6 203 ( 94 ) ( 19 ) 497 1,720 ( 13 ) ​ 4,352 Charge offs — — — — ( 94 ) — ( 7 ) ( 10 ) ( 1,629 ) — ( 1,740 ) Recoveries — — — — — — 2 1 123 — 126 Ending balance $ 5,067 $ 9,439 $ 32 $ 1,286 $ 4,452 $ 1,993 $ 326 $ 6,998 $ 7,016 $ 1,932 $ 38,541 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance $ 4,173 $ 8,913 $ 49 $ 1,029 $ 3,888 $ 2,289 $ 376 $ 5,466 $ 1,025 $ 2,171 $ 29,379 Provision (recovery) ​ 142 ( 1,498 ) — ( 5 ) 384 ( 129 ) ( 14 ) 962 625 ( 45 ) ​ 422 Charge offs ( 14 ) — — — — — — — ( 84 ) — ( 98 ) Recoveries — 502 — — — — 1 — 3 — 506 Ending balance $ 4,301 $ 7,917 $ 49 $ 1,024 $ 4,272 $ 2,160 $ 363 $ 6,428 $ 1,569 $ 2,126 $ 30,209 ​ Activity in the allowance for credit losses by class of loan for the six months ended June 30, 2023 (As Restated) and 2022 is summarized below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Real Estate ​ Construction ​ ​ ​ ​ Home Equity ​ ​ ​ ​ ​ ​ ​ Owner Non-owner Secured by and Land 1-4 Family Multi-Family Lines Of Commercial Consumer PCD ​ Six Months Ended June 30, 2023 Occupied Occupied Farmland Development Residential Residential Credit Loans Loans Loans Total Allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance $ 5,558 $ 7,147 $ 25 $ 1,373 $ 4,091 $ 2,201 $ 329 $ 7,853 $ 3,895 $ 2,072 $ 34,544 Provision (recovery) ​ ( 491 ) ​ 2,292 ​ 7 ​ ( 199 ) ​ 469 ​ ( 208 ) ​ 2 ​ 920 ​ 6,963 ​ ( 140 ) ​ 9,615 Charge offs — — — — ( 269 ) — ( 7 ) ( 1,776 ) ( 4,112 ) — ( 6,164 ) Recoveries — — — 112 161 — 2 1 270 ​ — 546 Ending balance $ 5,067 $ 9,439 $ 32 $ 1,286 $ 4,452 $ 1,993 $ 326 $ 6,998 $ 7,016 $ 1,932 $ 38,541 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses: Beginning balance $ 4,562 $ 9,028 $ 56 $ 998 $ 3,588 $ 3,280 $ 437 $ 4,088 $ 787 $ 2,281 $ 29,105 Provision (recovery) ​ ( 247 ) ​ ( 1,613 ) ​ ( 7 ) ​ 26 ​ 627 ​ ( 1,120 ) ​ ( 61 ) ​ 2,170 ​ 901 ​ ( 155 ) ​ 521 Charge offs ( 14 ) — — — — — ( 14 ) — ( 131 ) — ( 159 ) Recoveries — 502 — — 57 — 1 170 12 — 742 Ending balance $ 4,301 $ 7,917 $ 49 $ 1,024 $ 4,272 $ 2,160 $ 363 $ 6,428 $ 1,569 $ 2,126 $ 30,209 ​ Generally, a commercial loan, or a portion thereof, is charged-off when it is determined, through the analysis of any available current financial information with regards to the borrower, that the borrower is incapable of servicing unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance is pending or, in the case of secured debt, when it is determined, through analysis of current information with regards to our collateral position, that amounts due from the borrower are in excess of the calculated current fair value of the collateral. Losses on installment loans are recognized in accordance with regulatory guidelines. All other consumer loan losses are recognized when delinquency exceeds 120 cumulative days. ​ 29 Table of Contents The following table presents loans that were evaluated for expected credit losses on an individual basis and the related specific allocations, by loan portfolio segment as of June 30, 2023 and December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 December 31, 2022 ​ ​ Loan ​ Specific ​ Loan ​ Specific ​ ​ Balance ​ Allocations ​ Balance ​ Allocations Commercial real estate - owner occupied ​ $ 5,073 ​ $ — ​ $ 2,795 ​ $ — Commercial real estate - non-owner occupied ​ 19,187 ​ 2,454 ​ 19,641 ​ — Secured by farmland ​ ​ 503 ​ ​ — ​ ​ 525 ​ ​ — Construction and land development ​ — ​ — ​ — ​ — Residential 1-4 family ​ ​ 1,655 ​ ​ — ​ ​ 9,636 ​ ​ — Multi- family residential ​ ​ 960 ​ ​ — ​ ​ 996 ​ ​ — Home equity lines of credit ​ ​ — ​ ​ — ​ ​ 21 ​ ​ — Commercial loans ​ 1,369 ​ 843 ​ 2,979 ​ 2,193 Consumer loans ​ ​ — ​ ​ — ​ ​ 259 ​ ​ 42 Total non-PCD loans ​ ​ 28,747 ​ ​ 3,297 ​ ​ 36,852 ​ ​ 2,235 PCD loans ​ ​ 6,049 ​ ​ 1,932 ​ ​ 6,628 ​ ​ 2,072 Total loans ​ $ 34,796 ​ $ 5,229 ​ $ 43,480 ​ $ 4,307 ​ ​ ​ ​ ​ ​ ​ ​ ​ 30 Table of Contents 4. DERIVATIVES (Restated) Consumer Program Derivative The Company has a derivative instrument in connection with its agreement with a third-party that originates loans that are held on the Company’s balance sheet. The third-party provides credit support and reimbursement for lost interest under the agreement and the Company provides performance fees to the third-party on performing loans. Specifically, a portion of the originated loans are originated with a promotional period where interest accrues on the loans but is not owed to the Company unless and until the loan begins to amortize. If the borrower prepays the principal on the loan prior to the end of the promotional period the accrued interest is waived, but becomes due to the Company from the third-party under the agreement. This expected payment of waived interest to the Company along with performance fees due to the third-party comprise the value of the derivative. The fair value of the derivative instrument was an asset of $ 10.6 million recorded in the consolidated balance sheets in “Consumer Program derivative asset” as of June 30, 2023 and a liability of $ 0.5 million recorded in the consolidated balance sheets in “Consumer Program derivative liability” as of December 31, 2022. The underlying expected cash flows were $ 13.0 million and $ 0.6 million as of June 30, 2023 and December 31 2022, respectively. The Company calculates the fair value of this derivative using a discounted cash flow model using inputs that are inherently judgmental and reflect management’s best estimates of the assumptions a market participant would use to calculate the fair value. The most significant inputs and assumptions in determining the value of the derivative are noted below ($ in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ ​ ​ ​ ​ ​ Weighted ​ ​ Low ​ High ​ Average Remaining cumulative charge-offs ​ $ 2,960 ​ $ 16,243 ​ $ n/a Remaining cumulative promotional prepayments ​ $ 36,037 ​ $ 65,860 ​ $ 44,271 Average life (years) ​ n/a ​ n/a ​ 1.3 Discount rate ​ 5.07 % ​ 15.08 % ​ 15.08 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2022 ​ ​ ​ ​ ​ ​ Weighted ​ ​ Low ​ High ​ Average Remaining cumulative charge-offs ​ $ — ​ $ 1,170 ​ $ n/a Remaining cumulative promotional prepayments ​ $ 3,223 ​ $ 5,890 ​ $ 3,667 Average life (years) ​ n/a ​ n/a ​ 2.4 Discount rate ​ 2.87 % ​ 12.88 % ​ 6.00 % ​ Consumer Program derivative income (loss) was $ 1.8 million and ($ 0.2 ) million, respectively, during the three months ending June 30, 2023 and 2022, and was $ 13.2 million and ($ 0.2 ) million, respectively, during the six months ended June 30, 2023 and 2022, and was recorded in noninterest income in the Consolidated Statements of Income and Comprehensive Income (Loss). The income (loss) included $ 0.6 million and ($ 0.3 ) million during the three months ended June 30, 2023 and 2022, respectively, and $ 11.1 million and ($ 0.3 ) million during the six months ended June 30, 2023 and 2022, respectively, related to derivative fair value adjustments. Income related to the credit support and reimbursement of lost interest due from the third-party under the agreement was $ 1.2 million and $ 0.1 million during the three months ended June 30, 2023 and 2022, respectively, and $ 2.1 million and $ 0.1 million during the six months ended June 30, 2023 and 2022, respectively. Mortgage Banking Derivatives and Financial Instruments The Company enters into IRLCs (“interest rate lock commitments”) to originate residential mortgage loans held for sale, at specified interest rates and within a specified period of time (generally between 30 and 90 days), with borrowers who have applied for a loan and have met certain credit and underwriting criteria. The IRLCs are adjusted for estimated costs to originate the loan as well as the probability that the mortgage loan will fund within the terms of the IRLC (the 31 Table of Contents pullthrough rate). Estimated costs to originate include loan officer commissions and overrides. The pullthrough rate is estimated on changes in market conditions, loan stage, and actual borrower behavior using a historical analysis of IRLC closing rates. The Company obtains an analysis from a third party on a monthly basis to support the reasonableness of the pullthrough estimate. Best efforts and mandatory forward loan sale commitments are commitments to sell individual mortgage loans using both best efforts and mandatory delivery at a fixed price to an investor at a future date. Forward loan sale commitments that are mandatory delivery are accounted for as derivatives and carried at fair value, determined as the amount that would be necessary to settle the derivative financial instrument at the balance sheet date. Forward loan sale commitments that are best efforts are not derivatives but can be and have been accounted for at fair value, determined in a similar manner to those that are mandatory delivery. Forward loan sale commitments are recorded on the balance sheet as derivative assets and derivative liabilities with changes in their fair values recorded in mortgage banking income in the statement of operations. The key unobservable inputs used in determining the fair value of IRLCs as of June 30, 2023 and December 31, 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 Average pullthrough rates ​ 90.22 % ​ 80.78 % Average costs to originate ​ 1.31 % ​ 4.77 % ​ The following summarizes derivative and non-derivative financial instruments as of June 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ ​ Fair ​ Notional Derivative financial instruments: ​ Value ​ Amount Derivative assets (1) ​ $ 1,122 ​ $ 46,035 Derivative liabilities ​ $ — ​ $ — (1) Pullthrough rate adjusted ​ ​ ​ ​ ​ ​ June 30, 2023 ​ ​ Fair ​ Notional Non-derivative financial instruments: ​ Value ​ Amount Best efforts assets ​ $ 205 ​ $ 10,999 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ Fair ​ Notional Derivative financial instruments: ​ Value ​ Amount Derivative assets (1) ​ $ 921 ​ $ 25,368 Derivative liabilities ​ $ 98 ​ $ 25,028 (1) Pullthrough rate adjusted ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ Fair ​ Notional Non-derivative financial instruments: ​ Value ​ Amount Best efforts assets ​ $ 17 ​ $ 2,658 ​ The notional amounts of mortgage loans held for sale not committed to investors was $ 30.2 million and $ 20.0 million as of June 30, 2023 and December 31, 2022, respectively. 32 Table of Contents The Company has exposure to credit loss in the event of contractual non-performance by its trading counterparties in derivative instruments that the Company uses in its rate risk management activities. The Company manages this credit risk by selecting only counterparties that the Company believes to be financially strong, spreading the risk among multiple counterparties, by placing contractual limits on the amount of unsecured credit extended to any single counterparty and by entering into netting agreements with counterparties, as appropriate. ​ ​ ​ ​ ​ ​ ​ 5. FAIR VALUE (Revised and Restated) ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability Assets and liabilities measured at fair value on a recurring basis are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements Using ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ Total at ​ Identical Assets ​ Inputs ​ Inputs (dollars in thousands) June 30, 2023 (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 98,014 ​ $ — ​ $ 98,014 ​ $ — Obligations of states and political subdivisions ​ 29,673 ​ — ​ 29,673 ​ — Corporate securities ​ 12,956 ​ — ​ 12,956 ​ — Collateralized loan obligations ​ 4,901 ​ — ​ 4,901 ​ — Residential government-sponsored collateralized mortgage obligations ​ 28,568 ​ — ​ 28,568 ​ — Government-sponsored agency securities ​ 13,360 ​ — ​ 13,360 ​ — Agency commercial mortgage-backed securities ​ 30,794 ​ — ​ 30,794 ​ — SBA pool securities ​ 4,821 ​ — ​ 4,821 ​ — ​ ​ 223,087 ​ — ​ 223,087 ​ — Loans held for investment ​ ​ 195,739 ​ ​ — ​ ​ — ​ ​ 195,739 Consumer Program derivative ​ ​ 10,627 ​ ​ — ​ ​ — ​ ​ 10,627 Loans held for sale ​ ​ 57,704 ​ — ​ 57,704 ​ — Mortgage banking financial assets ​ ​ 205 ​ — ​ — ​ 205 Mortgage banking derivative assets ​ ​ 1,122 ​ — ​ — ​ 1,122 Interest rate swaps ​ ​ 4,232 ​ ​ — ​ ​ 4,232 ​ ​ — Total assets ​ $ 492,716 ​ $ — ​ $ 285,023 ​ $ 207,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements Using ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ Total at ​ Identical Assets ​ Inputs ​ Inputs (dollars in thousands) December 31, 2022 (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale securities ​ ​ ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 102,881 ​ $ — ​ $ 102,881 ​ $ — Obligations of states and political subdivisions ​ 29,178 ​ — ​ 29,178 ​ — Corporate securities ​ 14,828 ​ — ​ 14,828 ​ — Collateralized loan obligations ​ 4,876 ​ — ​ 4,876 ​ — Residential government-sponsored collateralized mortgage obligations ​ 26,595 ​ — ​ 26,595 ​ — Government-sponsored agency securities ​ 14,616 ​ — ​ 14,616 ​ — Agency commercial mortgage-backed securities ​ 37,417 ​ — ​ 37,417 ​ — SBA pool securities ​ 5,924 ​ — ​ 5,924 ​ — ​ ​ ​ 236,315 ​ — ​ 236,315 ​ — Loans held for sale ​ ​ 27,626 ​ — ​ 27,626 ​ — Mortgage banking financial assets ​ ​ 21 ​ — ​ — ​ 21 Mortgage banking derivative assets ​ ​ 945 ​ — ​ 921 ​ 24 Total assets ​ $ 264,907 ​ $ — ​ $ 264,862 ​ $ 45 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer Program derivative ​ $ 473 ​ $ — ​ $ — ​ $ 473 Mortgage banking financial liabilities ​ ​ 4 ​ ​ — ​ ​ — ​ ​ 4 Mortgage banking derivative liabilities ​ ​ 122 ​ ​ — ​ ​ 115 ​ ​ 7 Total liabilities ​ $ 599 ​ $ — ​ $ 115 ​ $ 484 ​ Assets measured at fair value on a non-recurring basis are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements Using ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ Total at ​ Identical Assets ​ Inputs ​ Inputs (dollars in thousands) June 30, 2023 (Level 1) (Level 2) (Level 3) Collateral dependent loans ​ $ 34,408 ​ $ — ​ $ — $ 34,408 Assets held for sale ​ ​ 3,115 ​ ​ — ​ ​ — ​ ​ 3,115 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements Using ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ Total at ​ Identical Assets ​ Inputs ​ Inputs (dollars in thousands) December 31, 2022 (Level 1) (Level 2) (Level 3) Collateral dependent loans ​ $ 47,832 ​ $ — ​ $ — $ 47,832 Assets held for sale ​ ​ 3,115 ​ ​ — ​ ​ — ​ ​ 3,115 ​ 34 Table of Contents Fair Value of Financial Instruments The carrying amount, estimated fair values and fair value hierarchy levels (previously defined) of financial instruments were as follows (in thousands) for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 ​ Fair Value Carrying Fair Carrying Fair ​ ​ Hierarchy Level ​ Amount ​ Value ​ Amount ​ Value Financial assets: ​ ​ ​ ​ Cash and cash equivalents Level 1 ​ $ 100,868 ​ $ 100,868 ​ $ 77,859 ​ $ 77,859 Securities available-for-sale Level 2 ​ 223,087 ​ 223,087 ​ 236,315 ​ 236,315 Securities held-to-maturity Level 2 ​ 12,378 ​ 11,369 ​ 13,520 ​ 12,449 Stock in Federal Reserve Bank and Federal Home Loan Bank Level 2 ​ 12,083 ​ 12,083 ​ 25,815 ​ 25,815 Preferred investment in mortgage company Level 2 ​ 3,005 ​ ​ 3,005 ​ 3,005 ​ ​ 3,005 Net loans Level 3 ​ 3,154,427 ​ 2,997,896 ​ 2,912,093 ​ 2,809,163 Loans held for sale Level 2 ​ 57,704 ​ ​ 57,704 ​ 27,626 ​ ​ 27,626 Accrued interest receivable Level 2 ​ 14,765 ​ 14,765 ​ 12,004 ​ 12,004 Consumer Program derivative ​ Level 3 ​ ​ 10,627 ​ ​ 10,627 ​ ​ — ​ ​ — Mortgage banking financial assets ​ Level 3 ​ ​ 205 ​ ​ 205 ​ ​ 21 ​ ​ 21 Mortgage banking derivative assets Level 2 and 3 ​ 1,122 ​ 1,122 ​ 945 ​ 945 Interest rate swaps ​ Level 2 ​ ​ 4,232 ​ ​ 4,232 ​ ​ — ​ ​ — Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits and NOW accounts Level 2 ​ $ 1,298,557 ​ $ 1,298,557 ​ $ 1,200,259 ​ $ 1,200,259 Money market and savings accounts Level 2 ​ 1,547,109 ​ 1,547,109 ​ 1,057,151 ​ 1,057,151 Time deposits Level 3 ​ 471,330 ​ 468,551 ​ 465,057 ​ 462,376 Securities sold under agreements to repurchase Level 1 ​ 3,921 ​ 3,921 ​ 6,445 ​ 6,445 FHLB advances Level 1 ​ — ​ — ​ 325,000 ​ 325,000 Junior subordinated debt Level 2 ​ 9,806 ​ 9,018 ​ 9,781 ​ 9,181 Senior subordinated notes Level 2 ​ 85,647 ​ 83,123 ​ 85,531 ​ 84,347 Accrued interest payable Level 2 ​ 7,405 ​ 7,405 ​ 3,261 ​ 3,261 Consumer Program derivative ​ Level 3 ​ ​ — ​ ​ — ​ ​ 473 ​ ​ 473 Mortgage banking financial liabilities ​ Level 3 ​ ​ — ​ ​ — ​ ​ 4 ​ ​ 4 Mortgage banking derivative liabilities Level 2 and 3 ​ — ​ — ​ 122 ​ 122 ​ Carrying amount is the estimated fair value for cash and cash equivalents (including federal funds sold), loans held for sale, accrued interest receivable and payable, mortgage banking financial assets and liabilities, mortgage banking derivative assets and liabilities, Consumer Program derivative asset and liability, interest rate swaps, demand deposits, savings accounts, money market accounts and FHLB advances, secured borrowings, and securities sold under agreements to repurchase. Fair value of long-term debt is based on current rates for similar financing. Carrying amount of Federal Reserve Bank and FHLB stock is a reasonable estimate of fair value as these securities are not readily marketable and are based on the ultimate recoverability of the par value. The fair value of off-balance-sheet items is not considered material. Fair value of net loans, time deposits, junior subordinated debt, and senior subordinated notes are measured using the exit-price notion. ​ 35 Table of Contents 6. LEASES The Company leases certain premises under operating leases. In recognizing lease right-of-use assets and related liabilities, we account for lease and non-lease components (such as taxes, insurance, and common area maintenance costs) separately as such amounts are generally readily determinable under our lease contracts. At June 30, 2023 and December 31, 2022, the Company had operating lease liabilities totaling $ 11.5 million and $ 5.8 million, respectively, and right-of-use assets totaling $ 10.7 million and $ 5.3 million, respectively, related to these leases. Operating lease liabilities and right-of-use assets are reflected in our consolidated balance sheets. We do not currently have any financing leases. For the three months ended June 30, 2023 and 2022, our net operating lease costs were $ 0.6 million and $ 0.4 million, respectively and for the six months ended June 30, 2023 and 2022, our net operating lease costs were $ 1.2 million and $ 1.0 million, respectively. These net operating lease costs are reflected in occupancy expenses on our consolidated statements of income and comprehensive income (loss). The following table presents other information related to our operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ (in thousands except for percent and period data) ​ June 30, 2023 ​ ​ June 30, 2022 ​ Other information: ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term - operating leases, in years ​ ​ 7.5 ​ ​ ​ 4.5 ​ Weighted-average discount rate - operating leases ​ 3.8 % ​ 2.8 % ​ The following table summarizes the maturity of remaining lease liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of (dollars in thousands) ​ June 30, 2023 Lease payments due: ​ ​ ​ 2023 ​ $ 1,019 2024 ​ ​ 1,829 2025 ​ ​ 1,683 2026 ​ ​ 1,657 2027 ​ ​ 1,635 Thereafter ​ 5,729 Total lease payments ​ ​ 13,552 Less: imputed interest ​ ​ ( 2,006 ) Lease liabilities ​ $ 11,546 ​ As of June 30, 2023, the Company had one operating lease that has not yet commenced that will create additional lease liabilities and right-of-use assets for the Company. ​ 7 . DEBT AND OTHER BORROWINGS (Restated) Other borrowings can consist of FHLB convertible advances, FHLB of Atlanta overnight advances, FHLB advances maturing within one year, federal funds purchased, Federal Reserve Board Discount Window 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 June 30, 2023 and December 31, 2022 was $ 3.9 million and $ 6.5 million, respectively. At June 30, 2023 and December 31, 2022, we had pledged callable agency securities, residential government-sponsored mortgage-backed securities and collateralized mortgage obligations with a carrying value of $ 4.6 million and $ 14.2 million, respectively, to customers who require collateral for overnight repurchase agreements and deposits. We repaid our short-term FHLB advances of $ 325.0 million that were outstanding as of December 31, 2022 and matured in the first quarter of 2023. As a result, we have all of our FHLB capacity available for future liquidity needs. At June 30, 2023, Primis Bank had lendable collateral value in the form of residential 1-4 family mortgages, HELOCs, 36 Table of Contents commercial mortgage loans, and investment securities supporting borrowing capacity of approximately $ 580.8 million from the FHLB. In June 2023, the Bank began participating in the Federal Reserve discount window borrowing program. At June 30, 2023, the Bank had borrowing capacity of $ 489.6 million within the program. In March 2023, the Federal Reserve established the Bank Term Funding Program (“BTFP”) in response to industry disruption, offering loans with up to one year in maturity to eligible depository institutions in exchange for pledged collateral in the form of U.S. Treasuries, agency debt and mortgage-backed securities and other qualifying assets. Borrowing capacity under the BTFP is based on the par value, not fair value, of the collateral. At June 30, 2023, we had securities available of $ 138.0 million for utilization with the BTFP, with no borrowings outstanding under the program at June 30, 2023. In 2017, the Company assumed $ 10.3 million of trust preferred securities that were issued on September 17, 2003 and placed through a trust in a pooled underwriting totaling approximately $ 650 million. At June 30, 2023 and December 31, 2022, there was $ 10.3 million outstanding, net of approximately $ 0.5 million of debt issuance costs. As of June 30, 2023 and December 31, 2022, the interest rate was 8.46 % and 7.69 %, respectively. At June 30, 2023, all of the trust preferred securities qualified as Tier 1 capital. On January 20, 2017, Primis completed the sale of $ 27.0 million of its fixed-to-floating rate senior Subordinated Notes due 2027. Interest is currently payable at an annual floating rate equal to three-month LIBOR plus a spread of 3.95 % until maturity or early redemption. At June 30, 2023, 60 % of these notes qualified as Tier 2 capital. On August 25, 2020, Primis completed the sale of $ 60.0 million of its fixed-to-floating rate Subordinated Notes due 2030. Interest is payable at an initial annual fixed rate of 5.40 % and after September 1, 2025, at a floating rate equal to a benchmark rate, which is expected to be Three-Month Term SOFR, plus a spread of 531 basis points. At June 30, 2023, all of these notes qualified as Tier 2 capital. ​ At June 30, 2023 and December 31, 2022, the remaining unamortized debt issuance costs related to the senior Subordinated Notes totaled $ 1.4 million and $ 1.5 million, respectively. ​ Secured Borrowings The Company transferred $ 5.7 million and $ 20.8 million in principal balance of loans to another financial institution during the three and six months ended June 30, 2023, respectively, that were accounted for as secured borrowings. The balance of secured borrowings was $ 20.6 million as of June 30, 2023 and the remaining amortized cost balance of the underlying loans was $ 20.7 million. None of the loans underlying the secured borrowings were past due 30 days or greater or on nonaccrual as of June 30, 2023 and were all internally rated as “pass” loans as presented in our “credit quality indicators” section of Note 3 – Loans and Allowance for Credit Losses. The loans were included in our allowance for credit losses process and an allowance was calculated on the loans as part of their inclusion in a pool with other loans with similar credit risk characteristics. There were no charge-offs of the loans underlying the secured borrowings during the three or six months ended June 30, 2023. The underlying loans collateralize the borrowings and cannot be sold or pledged by the Company. 8. STOCK-BASED COMPENSATION The 2017 Equity Compensation Plan (the “2017 Plan”) has a maximum number of 750,000 shares reserved for issuance. The purpose of the 2017 Plan is to promote the success of the Company by providing greater incentives to employees, non-employee directors, consultants and advisors to associate their personal financial interests with the long-term financial success of the Company, including its subsidiaries, and with growth in stockholder value, consistent with the Company’s risk management practices. 37 Table of Contents A summary of stock option activity for the six months ended June 30, 2023 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Weighted ​ Average ​ Aggregate ​ ​ ​ ​ Average ​ Remaining ​ Intrinsic ​ ​ ​ ​ Exercise ​ Contractual ​ Value ​ ​ Shares ​ Price ​ Term ​ (in thousands) Options outstanding, beginning of period 203,300 ​ $ 11.41 1.3 ​ $ 102 Expired ​ ( 113,500 ) ​ ​ ​ ​ ​ ​ ​ ​ Exercised ( 8,000 ) ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding, end of period 81,800 ​ $ 11.49 ​ 2.1 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at end of period 81,800 ​ $ 11.49 ​ 2.1 ​ $ — ​ There was no stock-based compensation expense associated with stock options for the three and six months ended June 30, 2023 and 2022. As of June 30, 2023, we do no t have any unrecognized compensation expense associated with the stock options. A summary of time vested restricted stock awards for the six months ended June 30, 2023 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Weighted ​ ​ ​ ​ Average ​ Average ​ ​ ​ ​ ​ Grant-Date ​ Remaining ​ ​ ​ ​ ​ Fair Value ​ Contractual ​ ​ ​ Shares ​ Per Share ​ Term ​ Unvested restricted stock outstanding, beginning of period 68,700 ​ $ 14.24 ​ 2.4 Granted 5,000 ​ ​ 7.58 Vested ( 21,350 ) ​ ​ 14.28 Forfeited ( 2,000 ) ​ ​ 15.43 ​ Unvested restricted stock outstanding, end of period 50,350 ​ $ 13.51 ​ 2.4 ​ ​ Stock-based compensation expense for time vested restricted stock awards totaled $ 0.1 million for the three months ended both June 30, 2023 and 2022, and $ 0.1 million and $ 0.8 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, unrecognized compensation expense associated with restricted stock awards was $ 0.5 million, which is expected to be recognized over a weighted average period of 2.4 years. A summary of performance-based restricted stock units (the “Units”) for the six months ended June 30, 2023 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Weighted ​ ​ ​ ​ ​ Average ​ Average ​ ​ ​ ​ ​ Grant-Date ​ Remaining ​ ​ ​ ​ ​ Fair Value ​ Contractual ​ ​ Shares ​ ​ Per Share ​ Term Unvested Units outstanding, beginning of period 153,960 ​ $ 13.02 3.6 Granted — ​ ​ — Vested — ​ ​ — Unvested Units outstanding, end of period 153,960 ​ ​ 13.02 ​ 2.6 ​ These Units are subject to service and performance conditions. These Units vest based on the achievement of both conditions. Achievement of the performance condition will be determined at the end of the five-year performance period (the “Performance Period”) by evaluating the: 1) Company’s adjusted earnings per share compound annual growth measured for the Performance Period and 2) performance factor achieved. Payouts between performance levels will be determined based on straight line interpolation. 38 Table of Contents The Company did not recognize any stock-based compensation expense associated with these Units for the three and six months ended June 30, 2023 and 2022 because it is not probable that these Units will vest. The potential unrecognized compensation expense associated with these Units was $ 3.0 million and $ 1.3 million at June 30, 2023 and 2022, respectively. ​ 9. COMMITMENTS AND CONTINGENCIES (Restated) Financial Instruments with Off-Balance Sheet Risk Primis is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and guarantees of credit card accounts. These instruments involve elements of credit and funding risk in excess of the amount recognized in the consolidated balance sheets. Letters of credit are written conditional commitments issued by Primis to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. We had letters of credit outstanding totaling $ 10.7 million as of both June 30, 2023 and December 31, 2022. Our exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit is based on the contractual amount of these instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Unless noted otherwise, we do not require collateral or other security to support financial instruments with credit risk. Allowance For Credit Losses - Off-Balance-Sheet Credit Exposures The allowance for credit losses on off-balance-sheet credit exposures is a liability account, calculated in accordance with ASC 326, representing expected credit losses over the contractual period for which we are exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if we have the unconditional right to cancel the obligation. Off-balance-sheet credit exposures primarily consist of amounts available under outstanding lines of credit and letters of credit detailed above. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance-sheet exposure. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management's best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment. Estimating credit losses on amounts expected to be funded uses the same methodology as described for loans in Note 3 - Loans and Allowance for Credit Losses, as if such commitments were funded. The allowance for credit losses on off-balance-sheet credit exposures is reflected in other liabilities in our consolidated balance sheets. The following table details activity in the allowance for credit losses on off-balance-sheet credit exposures: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Balance as of January 1 ​ $ 1,416 ​ $ 977 Credit loss expense (recovery) ​ ( 134 ) ​ 92 Balance as of June 30, ​ $ 1,282 ​ $ 1,069 ​ Commitments Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments are made predominately for adjustable rate loans, and generally have fixed expiration dates of up to three months or other termination clauses and usually require payment of a fee. Since many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. We had $ 81.5 million of loan commitments outstanding as of June 30, 2023, all of which contractually expire within thirty years . 39 Table of Contents At June 30, 2023 and December 31, 2022, we had unfunded lines of credit and undisbursed construction loan funds totaling $ 495.4 million and $ 540.6 million, respectively, not all of which will ultimately be drawn. Virtually all of our unfunded lines of credit and undisbursed construction loan funds are variable rate. The amount of certificate of deposit accounts maturing in less than one year was $ 379.6 million as of June 30, 2023, including $ 75.0 million of brokered CDs. Management anticipates that funding requirements for these commitments can be met in the normal course. Primis also had commitments on the subscription agreements entered into for investments in non-marketable equity securities of $ 2.4 million and $ 3.2 million at June 30, 2023 and December 31, 2022, respectively. ​ 10. EARNINGS PER SHARE (Restated) The following is a reconciliation of the denominators of the basic and diluted earnings per share (“EPS”) computations (amounts in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Income ​ Shares ​ Per Share ​ ​ (Numerator) ​ (Denominator) ​ Amount For the three months ended June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Basic EPS ​ $ ( 1,994 ) 24,639 ​ $ ( 0.08 ) Effect of dilutive stock options and unvested restricted stock ​ — — ​ — Diluted EPS ​ $ ( 1,994 ) 24,639 ​ $ ( 0.08 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Basic EPS ​ $ 4,618 24,563 ​ $ 0.19 Effect of dilutive stock options and unvested restricted stock ​ — 118 ​ — Diluted EPS ​ $ 4,618 24,681 ​ $ 0.19 ​ ​ ​ ​ ​ ​ ​ ​ ​ For the six months ended June 30, 2023 ​ ​ Basic EPS ​ $ 6,368 24,632 ​ $ 0.26 Effect of dilutive stock options and unvested restricted stock ​ — 53 ​ — Diluted EPS ​ $ 6,368 24,685 ​ $ 0.26 ​ ​ ​ ​ ​ ​ ​ ​ ​ For the six months ended June 30, 2022 ​ ​ Basic EPS ​ $ 9,137 24,534 ​ $ 0.37 Effect of dilutive stock options and unvested restricted stock ​ — 132 ​ — Diluted EPS ​ $ 9,137 24,666 ​ $ 0.37 ​ The Company had 81,800 anti-dilutive options as of June 30, 2023 and did no t have any anti-dilutive options as of June 30, 2022. ​ 11. SEGMENT INFORMATION (Restated) The Company's management reporting process measures the performance of its operating segment based on internal operating structure, which is subject to change from time to time. Accordingly, the Company operates two reportable segments for management reporting purposes as discussed below: Primis Bank. This segment specializes in providing financing services to businesses in various industries and deposit-related services to businesses, consumers and other customers. The primary source of revenue for this segment is net interest income from the origination of loans. Primis Mortgage. This segment specializes in originating mortgages in a majority of the U.S. The primary source of revenue for this segment is noninterest income and the origination and sale of mortgage loans. 40 Table of Contents The following table provides financial information for the Company's reportable segments. The information provided under the caption “Primis Bank” includes operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company and elimination adjustments to reconcile the results of the operating segment to the consolidated financial statements prepared in conformity with GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the three months ended June 30, 2023 ​ As of and for the six months ended June 30, 2023 ​ Primis Mortgage Primis Bank Consolidated Primis Mortgage Primis Bank Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 701 ​ $ 49,499 ​ $ 50,200 ​ $ 1,097 ​ $ 93,361 ​ $ 94,458 Interest expense ​ — ​ 26,866 ​ 26,866 ​ — ​ 45,802 ​ 45,802 Net interest income ​ 701 ​ 22,633 ​ 23,334 ​ 1,097 ​ 47,559 ​ 48,656 Provision for credit losses ​ — ​ ​ 4,352 ​ ​ 4,352 ​ — ​ ​ 9,615 ​ ​ 9,615 Noninterest income ​ 5,217 ​ ​ 3,720 ​ ​ 8,937 ​ 9,532 ​ ​ 17,075 ​ ​ 26,607 Noninterest expense ​ 5,271 ​ ​ 25,168 ​ ​ 30,439 ​ 10,259 ​ ​ 47,134 ​ ​ 57,393 Income (loss) before income taxes ​ 647 ​ ( 3,167 ) ​ ( 2,520 ) ​ 370 ​ 7,885 ​ 8,255 Income tax expense (benefit) ​ 162 ​ ​ ( 688 ) ​ ​ ( 526 ) ​ 96 ​ ​ 1,791 ​ ​ 1,887 Net income (loss) ​ $ 485 ​ $ ( 2,479 ) ​ $ ( 1,994 ) ​ $ 274 ​ $ 6,094 ​ $ 6,368 Assets ​ $ 63,563 ​ $ 3,802,649 ​ $ 3,866,212 ​ $ 63,563 ​ $ 3,802,649 ​ $ 3,866,212 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 41 Table of Contents ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Revised and Restated) Management’s discussion and analysis 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 consolidated financial statements, the footnotes thereto, and the other financial data included in this report and in our restated annual report on Form 10-K/A for the year ended December 31, 2022. Results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of results that may be attained for any other period. The emphasis of this discussion will be on the three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022 for the consolidated statements of income (loss) and comprehensive income (loss). For the consolidated balance sheets, the emphasis of this discussion will be the balances as of June 30, 2023 compared to December 31, 2022. 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. Restatement and Revision of Previously Issued Financial Statements This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) has been amended and restated to give effect to the Restatement, as more fully described in the “ Restatement and Revision of Previously Issued Condensed Consolidated Financial Statements” section of Note 1 – Accounting Policies to the Company's accompanying unaudited condensed consolidated financial statements contained elsewhere in this Amendment. For further detail regarding the Restatement, see “Explanatory Note” and Part I, Item 4, “Controls and Procedures” contained in this Amendment. We have also revised this MD&A, where applicable, for effects of the revisions discussed in the “ Retained Earnings Revisions ” and “ Restatement and Revision of Previously Issued Condensed Consolidated Financial Statements” sections of Note 1 – Accounting Policies. FORWARD-LOOKING STATEMENTS (Restated) Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q/A 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, 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. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements. In addition to the Risk Factors contained in this Quarterly Report on Form 10-Q/A, as well as the Risk Factors previously disclosed in our restated Annual Report on Form 10-K/A for the year ended December 31, 2022, factors that could contribute to those differences include, but are not limited to: ● the effects of future economic, business and market conditions and disruptions in the credit and financial markets, domestic and foreign; ● the ongoing impact of COVID-19 pandemic on our assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for credit losses; and other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services; 42 Table of Contents ● our ability to implement our various strategic and growth initiatives, including our Panacea Financial and Life Premium Finance Divisions, new digital banking platform, V1BE fulfillment service and Primis Mortgage Company; ● adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions; ● changes in the local economies in our market areas which adversely affect our customers and their ability to transact profitable business with us, including the ability of our borrowers to repay their loans according to their terms or a change in the value of the related collateral; ● changes in interest rates, inflation, loan demand, real estate values, or competition, as well as labor shortages, supply chain disruptions, the threat of recession and volatile equity capital markets; ● changes in the availability of funds resulting in increased costs or reduced liquidity, as well as the adequacy of our cash flow from operations and borrowings to meet our short-term liquidity needs; ● a deterioration or downgrade in the credit quality and credit agency ratings of the investment securities in our investment securities portfolio; ● impairment concerns and risks related to our investment securities portfolio of collateralized mortgage obligations, agency mortgage-backed securities and obligations of states and political subdivisions; ● the incurrence and possible impairment of goodwill associated with current or future acquisitions and possible adverse short-term effects on our results of operations; ● increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio, including as a result of the financial impact of COVID-19, rising interest rates, inflation and recessionary concerns; ● the concentration of our loan portfolio in loans collateralized by real estate; ● our level of construction and land development and commercial real estate loans; ● our level of concentration in unsecured consumer loans; ● risk related to a third-party’s ability to satisfy its contractual obligation to reimburse us for waived interest on loans with promotional features that pay off early; ● failure to prevent a breach to our Internet-based system and online commerce security; ● changes in the levels of loan prepayments and the resulting effects on the value of our loan portfolio; ● the failure of assumptions and estimates underlying the establishment of and provisions made to the allowance for credit losses; ● our ability to expand and grow our business and operations, including the establishment of additional branches and acquisition of additional branches and banks, and our ability to realize the cost savings and revenue enhancements we expect from such activities; ● government intervention in the U.S. financial system, including the effects of legislative, tax, accounting and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau, the capital ratios of Basel III as adopted by the federal banking authorities, the Tax Cuts and Jobs Act of 2017 and the CARES Act, as well as the possibility that the U.S. could default on its debt obligations and the risk of inflation and interest rate increases resulting from monetary and fiscal stimulus response, which may have unanticipated adverse effects on our customers, and our financial condition and results of operations; ● uncertainty related to the transition away from the London Inter-bank Offered Rate (“ LIBOR”); ● increased competition for deposits and loans adversely affecting rates and terms; ● the continued service of key management personnel; ● the potential payment of interest on demand deposit accounts to effectively compete for customers; ● potential environmental liability risk associated with properties that we assume upon foreclosure; ● increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios; ● risks of current or future mergers and acquisitions, including the related time and cost of implementing transactions and the potential failure to achieve expected gains, revenue growth or expense savings; ● increases in regulatory capital requirements for banking organizations generally, which may adversely affect our ability to expand our business or could cause us to shrink our business; ● acts of God or of war or other conflicts, including the current Ukraine/Russia conflict, acts of terrorism, pandemics or other catastrophic events that may affect general economic conditions; 43 Table of Contents ● changes in accounting policies, rules and practices and applications or determinations made thereunder, including the impact of the adoption of the current expected credit losses (“CECL”) methodology; ● any inability or failure to implement and maintain effective internal control over financial reporting and/or disclosure control or inability to remediate our existing material weaknesses in our internal controls deemed ineffective; ● fraudulent and negligent acts by loan applicants, mortgage brokers and our employees; ● failure to maintain effective internal controls and procedures; ● the risk that our deferred tax assets could be reduced if future taxable income is less than currently estimated, if corporate tax rates in the future are less than current rates, or if sales of our capital stock trigger limitations on the amount of net operating loss carryforwards that we may utilize for income tax purposes; ● our ability to attract and retain qualified employees, including as a result of heightened labor shortages; ● risks related to environmental, social and governance ("ESG") strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, associate, customer and third-party affiliations; ● negative publicity and the impact on our reputation; ● our ability to realize the value of derivative assets that are recorded at fair value due to changes in fair value driven by actual results being materially different than our assumptions; and ● other factors and risks described under “Risk Factors” herein and in any of our subsequent reports that we file with the Securities and Exchange Commission (the “Commission” or “SEC”) under the Exchange Act. ​ 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/A 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/A (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. OVERVIEW 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. At June 30, 2023, Primis Bank had thirty-two full-service branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. Thirty 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. Our deposits are insured, up to applicable limits, by the Federal Deposit Insurance Corporation (the “FDIC”). Primis Mortgage Company, a residential mortgage lender headquartered in Wilmington, North Carolina, is also a consolidated subsidiary of Primis Bank. As part of a cost saving initiative, the Bank plans to consolidate eight branch locations, reducing total branches from thirty-two to twenty-four, with an expected effective date of October 31, 2023. 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 (NOW), 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. 44 Table of Contents Current Economic Envir onment The U.S. economy expanded in the second quarter of 2023, with Real Gross Domestic Product growing by an annualized 2.4%. According to the U.S. Bureau of Labor and Statistics, the rate of unemployment was relatively stable compared to year end at 3.5% in July 2023. The Federal Reserve (the “Fed”) has now raised rates 525 bps in total since March of 2022, a pace that has not been experienced in more than 40 years. This rate level is continuing to put strong margin pressure on all banks, including Primis, as the cost of deposits is increasing while many loans are fixed due to borrowers locking in historic low rates in the past few years. Inflation, while beginning to show signs of moderating, remains higher than the Fed’s long term target rate. This has resulted in the Fed continuing to raise borrowing rates in an attempt to get inflation to its 2% target rate. The path of future rate hikes by the Fed is uncertain as it indicated their rate decisions going forward will be data-dependent, which could result in additional increases in the second half of 2023. Further, on August 1, 2023, Fitch Ratings downgraded the United States of America's Long-Term Foreign-Currency Issuer Default Rating to 'AA+' from 'AAA', citing expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions. The full extent of the impact of these factors is uncertain and may have a negative impact on the U.S. economy, including the possibility of an economic recession in the near or mid-term. FINANCIAL HIGHLIGHTS (Revised and Restated) ● Net loss for the three months ended June 30, 2023 totaled $2.0 million, or $0.08 basic and diluted loss per share, compared to net income of $4.6 million, or $0.19 basic and diluted earnings per share for the three months ended June 30, 2022. Net income for the six months ended June 30, 2023 totaled $6.4 million, or $0.26 basic and diluted earnings per share, compared to $9.1 million, or $0.37 basic and diluted earnings per share for the six months ended June 30, 2022. ● Total assets as of June 30, 2023 were $3.9 billion, an increase of 8.4% compared to December 31, 2022. ● Total cash and cash equivalents grew to $100.9 million, up from $77.9 million at December 31, 2022. ● Total loans, excluding Paycheck Protection Program (“PPP”) balances as of June 30, 2023, were $3.2 billion, an increase of $246.8 million, or 8.4%, from December 31, 2022. ● Total deposits were $3.3 billion at June 30, 2023, an increase of 21.8% compared to December 31, 2022. ● Non-time deposits increased to $2.85 billion at June 30, 2023, an increase of $588.3 million, or 26.0%, compared to December 31, 2022. ● The ratio of gross loans to deposits has declined to 95% as of June 30, 2023, from 108% at December 31, 2022. ● Net interest margin of 2.36% in the second quarter of 2023 was down from 3.32% in the second quarter of 2022. ● Allowance for credit losses to total loans was 1.21% at June 30, 2023, compared to 1.17% at December 31, 2022. ● Recently announced cost savings initiative and structural changes to branch and digital deposit gathering is expected to reduce costs by an estimated $9.4 million per year and is expected to be fully implemented by October 2023. ● Reduction in branch count will push total deposits per branch to approximately $153 million compared to approximately $85 million per branch at the end of 2022. ● During the second quarter of 2023, the Company discovered an employee loan fraud with total exposure of approximately $2.5 million. The Company evaluated the effect of the error, both qualitatively and quantitatively, and believes the impact to prior years is immaterial to each respective period assessed. Regardless, the Company has revised prior periods to reflect the fraud losses in the respective period incurred instead of recording in the current period when we discovered the fraud because the losses were projected to have a material impact to the expected 2023 annual results at the time of the original assessment. Additional details are included in the “Retained Earnings Revisions” section of Note 1 – Accounting Policies in this Form 10-Q/A. 45 Table of Contents RESULTS OF OPERATIONS (Revised and Restated) Net Income Three-Month Comparison. Net loss for the three months ended June 30, 2023 totaled $2.0 million, or $0.08 basic and diluted loss per share, compared to net income of $4.6 million, or $0.19 basic and diluted earnings per share for the three months ended June 30, 2022. The 143% decrease in net income during the three months ended June 30, 2023 compared to the three months ended June 30, 2022 was driven by higher noninterest expenses mainly from an increase in employee compensation and benefits expense in the second quarter of 2023 related to increased head count at the Bank, Primis Mortgage and Panacea. The decrease in net income was also attributable to higher data processing expense driven by substantially higher application volume on the digital deposit platform as a result of a savings account rate promotion offered during 2023. We also experienced a $3.9 million increase in the provision for loan losses, a substantial amount of which was due to specific loans that are in the process of resolution and the remaining was driven by provisions on the Consumer Program portfolio. These decreases were partially offset by higher mortgage banking income and Consumer Program derivative income in the second quarter of 2023. Six-Month Comparison. Net income for the six months ended June 30, 2023 totaled $6.4 million, or $0.26 basic and diluted earnings per share, compared to $9.1 million, or $0.37 basic and diluted earnings per share for the six months ended June 30, 2022. The 30% decrease in net income during the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was primarily driven by higher noninterest expenses from an increase in employee compensation and benefits expense, higher data processing expense in the current year, and higher provision for credit losses. These expense increases were partially offset by higher mortgage banking and Consumer Program derivative income in 2023. Net Interest Income 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. Three-Month Comparison. Net interest income was $23.3 million for the three months ended June 30, 2023, compared to $24.5 million for the three months ended June 30, 2022. Primis’ net interest margin for the three months ended June 30, 2023 was 2.36%, compared to 3.32% for the three months ended June 30, 2022. Net interest margin for three months ended June 30, 2023 was affected by excess cash balances that were not earning the higher rates of our loans combined with the climbing rates of our interest bearing deposits. Total income on interest-earning assets was $50.2 million and $28.2 million for the three months ended June 30, 2023 and 2022, respectively. The yield on average interest-earning assets was 5.07% and 3.82% for the three months ended June 30, 2023 and 2022, respectively. Increase in yield on average interest-earnings assets was driven by higher rates on cash and loans in the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The cost of average interest-bearing deposits increased 265 basis points to 3.10% for the three months ended June 30, 2023, compared to 0.45% for the three months ended June 30, 2022. Interest and fees on loans totaled $41.5 million and $26.3 million for the three months ended June 30, 2023 and 2022, respectively, while average loans during the three months ended June 30, 2023 were $3.2 billion, compared to $2.5 billion during the three months ended June 30, 2022. ​ 46 Table of Contents The following table details average balances of interest-earning assets and interest-bearing liabilities, the amount of interest earned/paid on such assets and liabilities, and the yield/rate for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Balance Sheets and Net Interest Margin ​ ​ ​ Analysis For the Three Months Ended ​ ​ ​ June 30, 2023 ​ June 30, 2022 ​ ​ ​ ​ ​ ​ Interest ​ ​ ​ ​ ​ ​ Interest ​ ​ ​ ​ ​ Average ​ Income/ ​ Yield/ ​ Average ​ Income/ ​ Yield/ ​ ​ Balance Expense Rate Balance Expense Rate ​ ​ (Dollar amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ $ 48,698 ​ $ 700 ​ 5.77 % $ 6,936 ​ $ 93 ​ 5.38 % Loans, net of deferred fees (1) (2) ​ ​ 3,112,280 ​ ​ 40,791 ​ 5.26 % ​ 2,507,825 ​ ​ 26,184 ​ 4.19 % Investment securities ​ ​ 240,700 ​ ​ 1,551 ​ 2.58 % ​ 287,722 ​ ​ 1,445 ​ 2.01 % Other earning assets ​ ​ 568,251 ​ ​ 7,158 ​ 5.05 % ​ 158,817 ​ ​ 448 ​ 1.13 % Total earning assets ​ ​ 3,969,929 ​ ​ 50,200 ​ 5.07 % ​ 2,961,300 ​ ​ 28,170 ​ 3.82 % Allowance for credit losses ​ ​ (35,770) ​ ​ ​ ​ ​ ​ ​ (29,844) ​ ​ ​ ​ ​ ​ Total non-earning assets ​ ​ 297,474 ​ ​ ​ ​ ​ ​ ​ 259,184 ​ ​ ​ ​ ​ ​ Total assets ​ $ 4,231,633 ​ ​ ​ ​ ​ ​ $ 3,190,640 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders' equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOW and other demand accounts ​ $ 826,598 ​ $ 4,343 ​ 2.11 % $ 695,481 ​ $ 556 ​ 0.32 % Money market accounts ​ ​ 858,532 ​ ​ 6,231 ​ 2.91 % ​ 810,781 ​ ​ 938 ​ 0.46 % Savings accounts ​ ​ 1,026,159 ​ ​ 10,406 ​ 4.07 % ​ 222,347 ​ ​ 143 ​ 0.26 % Time deposits ​ ​ 495,721 ​ ​ 3,803 ​ 3.08 % ​ 329,198 ​ ​ 674 ​ 0.82 % Total interest-bearing deposits ​ ​ 3,207,010 ​ ​ 24,783 ​ 3.10 % ​ 2,057,807 ​ ​ 2,311 ​ 0.45 % Borrowings ​ ​ 114,893 ​ ​ 2,083 ​ 7.27 % ​ 107,784 ​ ​ 1,353 ​ 5.04 % Total interest-bearing liabilities ​ ​ 3,321,903 ​ ​ 26,866 ​ 3.24 % ​ 2,165,591 ​ ​ 3,664 ​ 0.68 % Noninterest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ ​ 473,319 ​ ​ ​ ​ ​ ​ ​ 596,714 ​ ​ ​ ​ ​ ​ Other liabilities ​ ​ 38,408 ​ ​ ​ ​ ​ ​ ​ 22,235 ​ ​ ​ ​ ​ ​ Total liabilities ​ ​ 3,833,630 ​ ​ ​ ​ ​ ​ ​ 2,784,540 ​ ​ ​ ​ ​ ​ Stockholders' equity ​ ​ 398,003 ​ ​ ​ ​ ​ ​ ​ 406,100 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 4,231,633 ​ ​ ​ ​ ​ ​ $ 3,190,640 ​ ​ ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 23,334 ​ ​ ​ ​ ​ ​ $ 24,506 ​ ​ ​ Interest rate spread ​ ​ ​ ​ ​ ​ ​ 1.83 % ​ ​ ​ ​ ​ ​ 3.14 % Net interest margin ​ ​ ​ ​ ​ ​ ​ 2.36 % ​ ​ ​ ​ ​ ​ 3.32 % (1) Includes loan fees in both interest income and the calculation of the yield on loans. (2) Calculations include non-accruing loans in average loan amounts outstanding. Six-Month Comparison. Net interest income was $48.7 million for the six months ended June 30, 2023, compared to $47.3 million for the six months ended June 30, 2022. Primis’ net interest margin for the six months ended June 30, 2023 was 2.57%, compared to 3.13% for the six months ended June 30, 2022. Continued upward pressure on deposit account rates and consumer preferences shifting from non-interest bearing to higher rate products are impacting interest expense and net interest income for the Company and the industry as a whole. Net interest margin for the Company was further affected by excess cash balances, that are part of average other earning assets that earned lower rates compared to the rates earned by our loan portfolio. Total income on interest-earning assets was $94.4 million and $54.7 million for the six months ended June 30, 2023 and 2022, respectively. The yield on average interest-earning assets was 5.00% and 3.62% for the six months ended June 30, 2023 and 2022, respectively. Increase in yield on average interest-earnings assets was driven by higher rates on cash and loans in 2023 compared to 2022. The cost of average interest-bearing deposits increased 231 basis points to 2.75% for the six months ended June 30, 2023, compared to 0.44% for the six months ended June 30, 2022. Interest and fees on loans totaled $79.9 million and $51.0 million for the six months ended June 30, 2023 and 2022, respectively, while average loans during the six months ended June 30, 2023 were $3.1 billion, compared to $2.4 billion during the six months ended June 30, 2022. 47 Table of Contents The following table details average balances of interest-earning assets and interest-bearing liabilities, the amount of interest earned/paid on such assets and liabilities, and the yield/rate for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Balance Sheets and Net Interest Margin ​ ​ Analysis For the Six Months Ended ​ ​ June 30, 2023 ​ June 30, 2022 ​ ​ ​ ​ ​ ​ Interest ​ ​ ​ ​ ​ ​ Interest ​ ​ ​ ​ ​ Average ​ Income/ ​ Yield/ ​ Average ​ Income/ ​ Yield/ ​ ​ Balance Expense Rate Balance Expense Rate ​ ​ (Dollar amounts in thousands) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ $ 37,086 ​ $ 1,091 ​ 5.93 % $ 3,487 ​ $ 93 ​ 5.38 % Loans, net of deferred fees (1) (2) ​ ​ 3,051,441 ​ ​ 78,850 ​ 5.21 % ​ 2,433,662 ​ ​ 50,885 ​ 4.22 % Investment securities ​ ​ 243,536 ​ ​ 3,135 ​ 2.60 % ​ 295,036 ​ ​ 2,875 ​ 1.96 % Other earning assets ​ ​ 478,786 ​ ​ 11,382 ​ 4.79 % ​ 312,033 ​ ​ 854 ​ 0.55 % Total earning assets ​ ​ 3,810,849 ​ ​ 94,458 ​ 5.00 % ​ 3,044,218 ​ ​ 54,707 ​ 3.62 % Allowance for credit losses ​ ​ (34,940) ​ ​ ​ ​ ​ ​ ​ (29,543) ​ ​ ​ ​ ​ ​ Total non-earning assets ​ ​ 290,943 ​ ​ ​ ​ ​ ​ ​ 257,551 ​ ​ ​ ​ ​ ​ Total assets ​ $ 4,066,852 ​ ​ ​ ​ ​ ​ ​ 3,272,226 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders' equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOW and other demand accounts ​ $ 774,878 ​ $ 6,610 ​ 1.72 % $ 756,118 ​ $ 1,222 ​ 0.33 % Money market accounts ​ ​ 841,630 ​ ​ 11,032 ​ 2.64 % ​ 810,124 ​ ​ 1,797 ​ 0.45 % Savings accounts ​ ​ 811,221 ​ ​ 15,156 ​ 3.77 % ​ 223,562 ​ ​ 291 ​ 0.26 % Time deposits ​ ​ 492,412 ​ ​ 7,029 ​ 2.88 % ​ 339,724 ​ ​ 1,374 ​ 0.82 % Total interest-bearing deposits ​ ​ 2,920,141 ​ ​ 39,827 ​ 2.75 % ​ 2,129,528 ​ ​ 4,684 ​ 0.44 % Borrowings ​ ​ 199,533 ​ ​ 5,975 ​ 6.04 % ​ 139,363 ​ ​ 2,724 ​ 3.94 % Total interest-bearing liabilities ​ ​ 3,119,674 ​ ​ 45,802 ​ 2.96 % ​ 2,268,891 ​ ​ 7,408 ​ 0.66 % Noninterest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ ​ 514,677 ​ ​ ​ ​ ​ ​ ​ 571,264 ​ ​ ​ ​ ​ ​ Other liabilities ​ ​ 33,505 ​ ​ ​ ​ ​ ​ ​ 22,644 ​ ​ ​ ​ ​ ​ Total liabilities ​ ​ 3,667,856 ​ ​ ​ ​ ​ ​ ​ 2,862,799 ​ ​ ​ ​ ​ ​ Stockholders' equity ​ ​ 398,996 ​ ​ ​ ​ ​ ​ ​ 409,427 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 4,066,852 ​ ​ ​ ​ ​ ​ ​ 3,272,226 ​ ​ ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 48,656 ​ ​ ​ ​ ​ ​ $ 47,299 ​ ​ ​ Interest rate spread ​ ​ ​ ​ ​ ​ ​ 2.04 % ​ ​ ​ ​ ​ ​ 2.97 % Net interest margin ​ ​ ​ ​ ​ ​ ​ 2.57 % ​ ​ ​ ​ ​ ​ 3.13 % (1) Includes loan fees in both interest income and the calculation of the yield on loans. (2) Calculations include non-accruing loans in average loan amounts outstanding. Provision for Credit Losses The provision for credit losses is a current charge to earnings made in order to adjust the allowance for credit losses for current expected losses in the loan portfolio based on an evaluation of the loan portfolio, current economic conditions, changes in the nature and volume of lending, historical loan experience and other known internal and external factors affecting loan collectability. Our allowance for credit losses is calculated by segmenting the loan portfolio by loan type and applying risk factors to each segment. The risk factors are determined by considering historical loss data, peer data, as well as applying management’s judgment. The Company recorded a provision for credit losses for the three and six months ended June 30, 2023 of $4.3 million and $9.6 million, respectively, compared to a provision for credit losses for the three and six months ended June 30, 2022 of $0.4 million and $0.5 million, respectively. For the three and six months ended June 30, 2023, $1.3 million and $6.1 million, respectively, were due to charge-offs and additional reserve calculated in our normal reserve process for the Consumer Program portfolio. Excluding this provision amount, the provision for credit losses would have been $3.1 million and $3.6 million for the three and six months ended June 30, 2023, respectively. We had charge-offs totaling $1.7 48 Table of Contents million and $0.1 million during the three months ended June 30, 2023 and 2022, respectively, and $6.2 million and $0.2 million during six months ended June 30, 2023 and 2022, respectively. There were recoveries totaling $0.1 million and $0.5 million during the three months ended June 30, 2023 and 2022, respectively, and $0.6 million and $0.7 million during six months ended June 30, 2023 and 2022, respectively. Consumer Program charge-offs were $1.5 million and $3.5 million during the three and six months ended June 30, 2023, respectively, and were $22 thousand and $122 thousand during the three and six months ended June 30, 2022, respectively. A majority of the remaining charge-offs during the three and six months ended 2023 were due to three specific borrowers in which we determined portions of their loans were uncollectible. The Financial Condition Section of this MD&A provides information on our loan portfolio, past due loans, nonperforming assets and the allowance for credit losses. Noninterest Income The following table presents the major categories of noninterest income for the three months ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ June 30, (dollars in thousands) 2023 2022 Change Account maintenance and deposit service fees ​ $ 1,457 ​ $ 1,442 $ 15 Income from bank-owned life insurance ​ 394 ​ 378 ​ 16 Mortgage banking income ​ 5,198 ​ 593 ​ 4,605 Consumer Program derivative ​ ​ 1,758 ​ ​ (238) ​ ​ 1,996 Other noninterest income ​ 130 ​ 217 ​ (87) Total noninterest income ​ $ 8,937 ​ $ 2,392 ​ $ 6,545 ​ Noninterest income increased 274% to $8.9 million for the three months ended June 30, 2023, compared to $2.4 million for the three months ended June 30, 2022. The increase in noninterest income was primarily related to $4.6 million of mortgage banking income and $2.0 million of Consumer Program derivative income in the second quarter of 2023.The mortgage banking income increase was due to a full quarter of activity in 2023 compared to only a month in the same period in 2022 after acquisition in May of 2022. The Consumer Program derivative income was comprised of $0.6 million of fair value adjustment gains and $1.2 million of income related to waived interest and credit loss reimbursements from the derivative counterparty under the Consumer Program agreement. The following table presents the major categories of noninterest income for the six months ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, (dollars in thousands) 2023 2022 Change Account maintenance and deposit service fees ​ $ 2,681 ​ $ 2,793 $ (112) Income from bank-owned life insurance ​ 814 ​ 753 ​ 61 Mortgage banking income ​ 9,513 ​ 593 ​ 8,920 Gain on sale of loans ​ ​ 51 ​ ​ — ​ ​ 51 Consumer Program derivative ​ ​ 13,201 ​ ​ (184) ​ ​ 13,385 Other noninterest income ​ 347 ​ 581 ​ (234) Total noninterest income ​ $ 26,607 ​ $ 4,536 $ 22,071 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 49 Table of Contents Noninterest income increased 486% to $26.6 million for the six months ended June 30, 2023, compared to $4.5 million for the six months ended June 30, 2022. The increase in noninterest income was primarily related to $13.4 million of Consumer Program derivative income and $8.9 million of higher mortgage banking income during the six months ended June 30, 2023. The increase in the mortgage banking income is related to the purchase of Primis Mortgage in May 2022 coupled with meaningful growth in the year since the purchase. Mortgage banking income includes fair value adjustments, origination income, and gains on sales of mortgage loans held for sale. The increase in the Consumer Program derivative was driven by $11.1 million in fair value adjustment gains on the derivative asset and $2.2 million of income related to waived interest and credit loss reimbursements from the derivative counterparty under the Consumer Program agreement. Noninterest Expense The following table presents the major categories of noninterest expense for the three months ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ June 30, (dollars in thousands) 2023 2022 Change Salaries and benefits ​ $ 15,283 ​ $ 10,573 ​ $ 4,710 Occupancy expenses ​ 1,593 ​ 1,418 ​ 175 Furniture and equipment expenses ​ 1,852 ​ 1,128 ​ 724 Amortization of core deposit intangible ​ 318 ​ 341 ​ (23) Virginia franchise tax expense ​ 848 ​ 814 ​ 34 Data processing expense ​ 2,828 ​ 1,293 ​ 1,535 Marketing expense ​ ​ 521 ​ ​ 731 ​ ​ (210) Telephone and communication expense ​ 416 ​ 366 ​ 50 Net loss on bank premises and equipment ​ ​ — ​ ​ 620 ​ ​ (620) Professional fees ​ 1,075 ​ 827 ​ 248 Miscellaneous lending expenses ​ ​ 568 ​ ​ 104 ​ ​ 464 Fraud losses ​ ​ 1,997 ​ ​ 57 ​ ​ 1,940 Other operating expenses ​ 3,140 ​ 2,251 ​ 889 Total noninterest expenses ​ $ 30,439 ​ $ 20,523 ​ $ 9,916 ​ Noninterest expenses were $30.4 million during the three months ended June 30, 2023, compared to $20.5 million during the three months ended June 30, 2022. The 48% increase in noninterest expenses was primarily due to a $4.7 million increase in employee compensation in the second quarter of 2023 related to increased head count at the Bank, Primis Mortgage and Panacea compared to the second quarter of 2022, along with costs related to the cost savings initiative announced in the second quarter of 2023. The increase in noninterest expense during the three months ended June 30, 2023 was also attributable to a $1.5 million increase in data processing expense driven by substantially higher application volume on the digital deposit platform as a result of a savings account rate promotion offered during 2023. We also experienced an increase of $1.9 million in fraud losses during the second quarter of 2023 primarily related to a substantial increase in deposit account fraud, which was also seen across the industry during the quarter. Furniture and equipment expenses increased $0.7 million due in large part to write-downs of assets related to the cost savings initiative announced in the second quarter of 2023. A significant driver of the increase in other non-interest expenses were higher expenses related to Primis Mortgage in the second quarter of 2023. Other notable drivers of the increase in other operating expenses in the second quarter of 2023 included higher FDIC insurance costs due to the significant growth in deposits. ​ 50 Table of Contents The following table presents the major categories of noninterest expense for the six months ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, (dollars in thousands) 2023 2022 Change Salaries and benefits ​ $ 30,311 ​ $ 20,198 ​ $ 10,113 Occupancy expenses ​ 3,038 ​ 2,875 ​ 163 Furniture and equipment expenses ​ 3,429 ​ 2,228 ​ 1,201 Amortization of core deposit intangible ​ 635 ​ 682 ​ (47) Virginia franchise tax expense ​ 1,697 ​ 1,627 ​ 70 Data processing expense ​ 5,079 ​ 2,783 ​ 2,296 Marketing expense ​ ​ 1,090 ​ ​ 1,196 ​ ​ (106) Telephone and communication expense ​ 793 ​ 748 ​ 45 Net gain loss on other real estate owned ​ — ​ (59) ​ 59 Net loss on bank premises and equipment ​ ​ — ​ ​ 620 ​ ​ (620) Professional fees ​ 1,937 ​ 1,921 ​ 16 Miscellaneous lending expenses ​ ​ 1,453 ​ ​ 494 ​ ​ 959 Fraud losses ​ ​ 2,452 ​ ​ 110 ​ ​ 2,342 Other operating expenses ​ 5,479 ​ 4,152 ​ 1,327 Total noninterest expenses ​ $ 57,393 ​ $ 39,575 ​ $ 17,818 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expenses were $57.4 million during the six months ended June 30, 2023, compared to $39.6 million during the six months ended June 30, 2022. The 45% increase in noninterest expenses was primarily attributable to a $10.1 million increase in employee compensation and benefits expense mainly related to increased head count at the Bank, Primis Mortgage and Panacea in the six months ended June 30, 2023 compared to 2022. The increase in noninterest expense during the six months ended June 30, 2023 was also driven by a $2.3 million increase in data processing expense in 2023 driven by substantially higher application volume on the digital deposit platform as a result of a savings account rate promotion offered during the first and second quarter of 2023. We also experienced an increase of $2.3 million in fraud losses during the six months ended June 30, 2023, primarily related to a substantial increase in deposit account fraud in the second quarter, which was also seen across the industry. Furniture and equipment expenses increased $1.2 million due to growth in the Bank, Primis Mortgage, and Panacea, and also due to write-downs of assets related to the cost savings initiative announced in the second quarter of 2023. Other expenses increased during the six months ended June 30, 2023 compared to the six months ended June 30, 2022, largely driven by higher expenses related to Primis Mortgage and higher FDIC insurance costs in 2023. FINANCIAL CONDITION (Revised and Restated) Balance Sheet Overview Total assets were $3.9 billion as of June 30, 2023 and $3.6 billion as of December 31, 2022. Total cash and cash equivalents were $100.9 million as of June 30, 2023 and $77.9 million as of December 31, 2022. Investment securities decreased from $249.8 million as of December 31, 2022 to $235.5 million as of June 30, 2023. Total loans increased 8%, from $2.9 billion at December 31, 2022 to $3.2 billion at June 30, 2023. Total deposits were $3.3 billion at June 30, 2023, compared to $2.7 billion at December 31, 2022 and total equity was $390.4 million and $389.0 million at June 30, 2023 and December 31, 2022, respectively. Stockholder’s equity increased $1.5 million from December 31, 2022 to June 30, 2023 as a result of an increase in retained earnings driven by net income during the year partially offset by payment of common stock dividends and an increase in unrealized mark-to-market adjustments on the Company’s available-for-sale securities portfolio due to increases in market interest rates during the six months ended June 30, 2023. The Company has the intention to hold these securities until maturity or recovery of the value and does not anticipate realizing any losses on the investments. 51 Table of Contents Loans Total loans were $3.2 billion and $2.9 billion at June 30, 2023 and December 31, 2022, respectively. PPP loans totaled $2.1 million at June 30, 2023 and $4.6 million at December 31, 2022, respectively. Excluding PPP loans, loans outstanding increased $248.8 million, or 8%, since December 31, 2022. As of June 30, 2023 and December 31, 2022, 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. The composition of our loans held for investment portfolio consisted of the following at June 30, 2023 and December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 ​ ​ Amount Percent Amount Percent Loans secured by real estate: ​ ​ Commercial real estate - owner occupied ​ $ 454,067 14.2 % $ 459,866 15.6 % Commercial real estate - non-owner occupied ​ 595,805 18.7 % 579,733 19.7 % Secured by farmland ​ 5,271 0.2 % 5,970 0.2 % Construction and land development ​ 175,073 5.5 % 148,690 5.0 % Residential 1-4 family ​ 591,938 18.5 % 609,694 20.7 % Multi- family residential ​ 133,754 4.2 % 140,321 4.8 % Home equity lines of credit ​ 62,808 2.0 % 65,152 2.2 % Total real estate loans ​ 2,018,716 63.2 % 2,009,426 68.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ 598,305 18.7 % 520,741 17.7 % Paycheck protection program loans ​ ​ 2,143 ​ 0.1 % ​ 4,564 ​ 0.2 % Consumer loans ​ 567,755 17.8 % 405,278 13.8 % Total Non-PCD loans ​ 3,186,919 99.8 % 2,940,009 99.8 % PCD loans ​ ​ 6,049 ​ 0.2 % ​ 6,628 ​ 0.2 % Total loans ​ $ 3,192,968 ​ 100.0 % $ 2,946,637 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ Consumer Program Loans The Company has $191.4 million and $134.4 million of loans outstanding in the Consumer Program as of June 30, 2023 and December 31, 2022, respectively, or 6% and 5% of our total gross loan portfolio as of each date. Loans in the Consumer Program are included within the Consumer loans category disclosures. As of June 30, 2023, 42% of the loans were in a promotional period requiring no payment of interest on their loans with 28% of these promotional loan periods ending in the next 12 months and the remaining ending within 24 months of June 30, 2023. As of December 31, 2022, 44% of the loans were in a promotional period requiring no payment of interest on their loans with 21% and 79% of these promotional loan periods ending in 2023 and 2024, respectively. ​ ​ 52 Table of Contents 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 June 30, 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After 1 Year ​ After 5 Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Through 5 Years ​ Through 15 Years ​ After 15 Years ​ ​ ​ ​ One Year ​ Fixed ​ Floating ​ Fixed ​ Floating ​ Fixed ​ Floating ​ ​ ​ or Less Rate Rate Rate Rate Rate Rate Total Loans secured by real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - owner occupied ​ $ 31,468 ​ $ 120,778 ​ $ 17,039 ​ $ 110,132 ​ $ 107,189 ​ $ 2,315 ​ $ 65,146 ​ $ 454,067 Commercial real estate - non-owner occupied ​ ​ 34,523 ​ ​ 192,115 ​ ​ 31,175 ​ ​ 60,317 ​ ​ 65,937 ​ ​ 1,384 ​ ​ 210,354 ​ ​ 595,805 Secured by farmland ​ ​ 1,527 ​ ​ 891 ​ ​ 285 ​ ​ 221 ​ ​ 1,008 ​ ​ — ​ ​ 1,339 ​ ​ 5,271 Construction and land development ​ ​ 122,162 ​ ​ 25,535 ​ ​ 19,291 ​ ​ 757 ​ ​ 5,013 ​ ​ 681 ​ ​ 1,634 ​ ​ 175,073 Residential 1-4 family ​ ​ 15,602 ​ ​ 48,619 ​ ​ 8,306 ​ ​ 30,035 ​ ​ 54,093 ​ ​ 72,286 ​ ​ 362,997 ​ ​ 591,938 Multi- family residential ​ ​ 5,677 ​ ​ 56,640 ​ ​ 18,783 ​ ​ 7,078 ​ ​ 18,562 ​ ​ — ​ ​ 27,014 ​ ​ 133,754 Home equity lines of credit ​ ​ 9,468 ​ ​ 996 ​ ​ 11,142 ​ ​ 30 ​ ​ 3,002 ​ ​ 33 ​ ​ 38,137 ​ ​ 62,808 Total real estate loans ​ ​ 220,427 ​ ​ 445,574 ​ ​ 106,021 ​ ​ 208,570 ​ ​ 254,804 ​ ​ 76,699 ​ ​ 706,621 ​ ​ 2,018,716 Commercial loans ​ ​ 107,138 ​ 97,191 ​ ​ 153,771 ​ ​ 189,341 ​ ​ 46,927 ​ ​ 1,131 ​ ​ 2,806 ​ ​ 598,305 Paycheck protection program loans ​ ​ 25 ​ ​ 1,918 ​ ​ — ​ ​ 200 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,143 Consumer loans ​ ​ 2,410 ​ ​ 272,990 ​ ​ 105,150 ​ ​ 92,232 ​ ​ 92,553 ​ ​ 2,415 ​ ​ 5 ​ ​ 567,755 Total Non-PCD loans ​ ​ 330,000 ​ ​ 817,673 ​ ​ 364,942 ​ ​ 490,343 ​ ​ 394,284 ​ ​ 80,245 ​ ​ 709,432 ​ ​ 3,186,919 PCD loans ​ 3,060 ​ ​ 1,337 ​ ​ — ​ ​ — ​ ​ 1,114 ​ ​ 398 ​ ​ 140 ​ 6,049 Total loans ​ $ 333,060 ​ $ 819,010 ​ $ 364,942 ​ $ 490,343 ​ $ 395,398 ​ $ 80,643 ​ $ 709,572 ​ $ 3,192,968 ​ The following table sets forth the contractual maturity ranges of our Consumer Program loan portfolio as of June 30, 2023, which is only originated at fixed rates (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One Year or Less ​ After One Year to Five Years ​ After Five Through Ten Years ​ After Ten Years ​ Total Consumer Program Loans ​ $ 237 ​ $ 128,486 ​ $ 62,511 ​ $ 144 ​ $ 191,378 ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount ending ​ Amount ending ​ ​ ​ ​ No Interest ​ No Interest ​ Total Interest ​ ​ Promo Period in ​ Promo Period in ​ Promo ​ ​ next 12 months ​ next 13-24 months ​ as of 6/30/23 Consumer Program Loans ​ $ 22,216 ​ $ 58,545 ​ $ 80,761 ​ During the three and six months ended June 30, 2023, $1.6 million and $2.2 million of promotional loans paid off prior to the end of their promotional periods while $1.0 million and $1.2 million of promotional loans reached the end of the promotional period and entered amortization. ​ Asset Quality While the impact of COVID-19 largely subsided in 2023, the residual effect of COVID-19 and its variants, as well as new risks emerging from geopolitical conflict, inflation, bank failures and the threat of a recession continue to cause 53 Table of Contents economic instability. Despite this economic uncertainty, our asset quality remained strong during the first and second quarter of 2023. We will generally place a loan on nonaccrual status when it becomes 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. We maintain appraisals on loans secured by real estate, particularly those categorized as nonperforming loans and potential problem loans. In instances where appraisals reflect reduced collateral values, we make an evaluation of the borrower’s overall financial condition to determine the need, if any, for impairment or write-down to their fair values. If foreclosure occurs, we record OREO at the lower of our recorded investment in the loan or fair value less our estimated costs to sell. Our loan portfolio losses and delinquencies have been primarily limited by our underwriting standards and portfolio management practices. Whether losses and delinquencies in our portfolio will increase significantly depends upon the value of the real estate securing the loans and economic factors, such as the overall economy in our market area, rising interest rates, historically high inflation, and recessionary concerns. Total calculated reserves increased by $4.0 million to $38.5 million at the end of June 30, 2023 compared to $34.5 million at December 31, 2022, driven by growth in the Consumer Program loan portfolio and secondarily due to the $244.4 million in overall loan growth experienced in 2023. The following table presents a comparison of nonperforming assets as of June 30, 2023 and December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ 2023 2022 Nonaccrual loans ​ $ 25,290 ​ $ 35,484 ​ Loans past due 90 days and accruing interest ​ 1,714 ​ 3,361 ​ Total nonperforming assets ​ 27,004 ​ 38,845 ​ ​ ​ ​ ​ ​ ​ ​ ​ SBA guaranteed amounts included in nonperforming loans ​ $ 2,331 ​ $ 3,969 ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses to total loans ​ 1.21 % 1.17 % Allowance for credit losses to nonaccrual loans ​ 152.40 % 97.35 % Allowance for credit losses to nonperforming loans ​ 142.73 % 88.93 % Nonaccrual to total loans ​ 0.80 % 1.20 % Nonperforming assets excluding SBA guaranteed loans to total assets ​ 0.64 % 0.98 % ​ Nonaccrual loans decreased 29% to $25.3 million (excluding $0.6 million of loans fully covered by SBA guarantees) at June 30, 2023, compared to $35.5 million (excluding $0.6 million of loans fully covered by SBA guarantees) at December 31, 2022. A substantial portion of the Bank’s nonperforming assets in previous periods were comprised of two relationships with a combined balance of approximately $27.0 million. A large residential property with a balance of approximately $8.0 million included in that total was sold in the second quarter of 2023. The other relationship, primarily consisting of assisted living facilities, is currently at the end of a receiver-managed marketing process with all three facilities under contract to close in the third quarter of 2023. When including the receipt of funds and removal of these loans, the Bank would have had approximately $5.0 million of nonperforming loans at June 30, 2023, an 86% decrease from year end. At June 30, 2023, our total substandard loans were $33.7 million compared to $41.0 million at December 31, 2022, an 18% decline. Included in the total substandard loans were SBA guarantees of $0.8 million in both periods. Special mention loans totaled $32.4 million at June 30, 2023 and $32.3 million at December 31, 2022. For the quarter ended June 30, 2023, two loans from our owner occupied commercial real estate loan portfolio with an amortized cost basis of $0.4 million, were modified to a borrower experiencing financial difficulty. This modification 54 Table of Contents resulted in reamortization of the balance of the notes over a 25 year period, while maintaining the original maturity date of February and July 2027. Contractual payments for both notes, prior to modification, for the three month period would have totaled $0.03 million. This newly originated financial difficulty modification had no payment delinquencies in the second quarter and represents 0.09% of our total owner occupied commercial real estate loans . An existing modification performed in the first quarter of 2023, comprised of one loan with a $0.9 million amortized cost, which will resume contractual payments in August 2023. This existing modification has had no payment delinquencies since its modification and accounts for only 0.15% of our total 1-4 family residential loans. Investment Securities Our investment securities portfolio provides us with required liquidity and collateral to pledge secure public deposits, certain other deposits, advances from the FHLB of Atlanta, and repurchase agreements. We classify our investment securities as either held-to-maturity or available-for-sale. Debt investment securities that Primis has 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 have the intention to hold these securities until maturity or recovery of the value and do not anticipate realizing any losses on the investments. Investment securities, available-for-sale and held-to-maturity, totaled $235.5 million at June 30, 2023, a decrease of 6% from $249.8 million at December 31, 2022, primarily due to paydowns, maturities, and calls of the investments over the past six months. The following table sets forth a summary of the investment securities portfolio as of the dates indicated. Available-for-sale investment securities are reported at fair value, and held-to-maturity investment securities are reported at amortized cost (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2023 2022 Available-for-sale investment securities: ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 98,014 ​ $ 102,881 Obligations of states and political subdivisions ​ 29,673 ​ 29,178 Corporate securities ​ 12,956 ​ 14,828 Collateralized loan obligations ​ 4,901 ​ 4,876 Residential government-sponsored collateralized mortgage obligations ​ 28,568 ​ 26,595 Government-sponsored agency securities ​ 13,360 ​ 14,616 Agency commercial mortgage-backed securities ​ 30,794 ​ 37,417 SBA pool securities ​ 4,821 ​ 5,924 Total ​ $ 223,087 ​ $ 236,315 ​ ​ ​ ​ ​ ​ ​ Held-to-maturity investment securities: ​ ​ Residential government-sponsored mortgage-backed securities ​ $ 9,753 ​ $ 10,522 Obligations of states and political subdivisions ​ 2,388 ​ 2,721 Residential government-sponsored collateralized mortgage obligations ​ 237 ​ 277 Total ​ $ 12,378 ​ $ 13,520 ​ We recognized an immaterial amount of credit impairment charges related to credit losses on our held-to-maturity investment securities during the three and six months ended June 30, 2023 and no credit losses during the three and six months ended June 30, 2022. 55 Table of Contents Deposits and Other Borrowings Deposits 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. Total deposits increased 22% to $3.3 billion at June 30, 2023 from $2.7 billion at December 31, 2022. The increase in deposits from year-end was primarily driven by the substantial growth in the Bank’s new digital deposit platform in the first and second quarter of 2023. The majority of the growth was in savings accounts with the remainder largely in NOW accounts. Savings accounts increased 184% from $245.7 million as of December 31, 2022 to $696.8 million at June 30, 2023. NOW accounts increased 32% from $617.7 million at December 31, 2022 to $817.7 million at June 30, 2023. 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. 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 $1.2 billion, or 35% of total deposits, at June 30, 2023. As further discussed below in “Liquidity and Funds Management” we took steps during the first six months of 2023 to bolster our available sources of liquidity and as of June 30, 2023, our total available sources of liquidity exceeds total uninsured deposits by $100 million. 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. For our deposit agreements with certain customers, we hold the collateral in a segregated custodial account. We are required to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, we will pledge additional securities. We closely monitor collateral levels to ensure adequate levels are maintained, while mitigating the potential risk of over-collateralization. Other Borrowings 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, 2023 and December 31, 2022, total FHLB borrowings were $0 and $325.0 million, respectively. The decrease in FHLB borrowings was a result of the deposit growth during the first quarter of 2023 that primarily funded our loan growth and supported other funding needs and allowing us to repay our FHLB advances. As of March 31, 2023, we had $580.8 million of unused and available FHLB lines of credit. 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 was $3.9 million and $6.4 million at March 31, 2023 and December 31, 2022, respectively. We had secured borrowings of $20.6 million as of June 30, 2023 related to loan transfers to another financial institution during the three and six months ended June 30, 2023 that did not meet the criteria to be treated as a sale under relevant 56 Table of Contents 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 1 –Accounting Policies” in this Form 10-Q/A. Liquidity and Funds Management 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 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 $65 million, and utilize securities sold under agreements to repurchase (“repo”) and reverse repurchase agreement borrowings from approved securities dealers, as needed. 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. At June 30, 2023, we had substantial liquidity on the balance sheet with cash and equivalents of $100.9 million versus $77.9 million at December 31, 2022 largely due to the growth in digital platform deposits described above. At June 30, 2023 and December 31, 2022, we had pledged callable agency securities, residential government-sponsored mortgage-backed securities and collateralized mortgage obligations with a carrying value of $4.6 million and $14.2 million, respectively, to customers who require collateral for overnight repurchase agreements and deposits. The balance in repo accounts at June 30, 2023 and December 31, 2022 was $3.9 million and $6.5 million, respectively. We repaid our short-term FHLB advances of $325.0 million that were outstanding as of December 31, 2022 and matured in the first quarter of 2023. As a result, we have all of our FHLB capacity available for future liquidity needs. At June 30, 2023, Primis Bank had lendable collateral value in the form of residential 1-4 family mortgages, HELOCs, commercial mortgage loans, and investment securities supporting borrowing capacity of approximately $580.8 million from the FHLB. In June 2023, the Bank began participating in the Federal Reserve discount window borrowing program. At June 30, 2023, the Bank had borrowing capacity of $489.6 million within the program. In March 2023, the Federal Reserve established the Bank Term Funding Program (“BTFP”) in response to recent industry disruption, offering loans with up to one year in maturity to eligible depository institutions in exchange for pledged collateral in the form of U.S. Treasuries, agency debt and mortgage-backed securities and other qualifying assets. Borrowing capacity under the BTFP is based on the par value, not fair value, of the collateral. At June 30, 2023, we had securities available of $138.0 million for utilization with the BTFP, with no borrowings outstanding under the program at June 30, 2023. The Bank also utilizes institutional and brokered certificates of deposit to supplement customer funding. At June 30, 2023, we had $75.0 million of brokered deposits outstanding. We had remaining brokered CD capacity under internal policy of approximately $321.0 million. 57 Table of Contents At June 30, 2023, we had $495.4 million of unfunded lines of credit and undisbursed construction loan funds, not all of which will ultimately be drawn. The amount of certificate of deposit accounts maturing in less than one year was $379.6 million as of June 30, 2023, including $75.0 million of brokered CDs. Management anticipates that funding requirements for these commitments can be met in the normal course. As of June 30, 2023, 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 June 30, 2023, Primis has no material commitments for capital expenditures. Capital Resources Capital management consists of providing equity to support both current and future operations. Primis Financial Corp. and its subsidiary bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (“PCA”), we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. At June 30, 2023 and December 31, 2022, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for PCA. 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 June 30, 2023, that Primis meets all capital adequacy requirements to which it is subject. ​ 58 Table of Contents The following table provides a comparison of the leverage and risk-weighted capital ratios of Primis Financial Corp. and Primis Bank at the periods indicated to the minimum and well-capitalized required regulatory standards: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum ​ ​ ​ ​ ​ ​ ​ ​ Required for ​ ​ ​ ​ ​ ​ ​ ​ Capital ​ To Be ​ Actual Ratio at ​ ​ Adequacy ​ Categorized as ​ June 30, ​ December 31, ​ ​ Purposes Well Capitalized (1) 2023 2022 Primis Financial Corp. ​ ​ Leverage ratio 4.00 % n/a 7.74 % 9.52 % Common equity tier 1 capital ratio 4.50 % n/a 9.21 % 10.07 % Tier 1 risk-based capital ratio 6.00 % n/a 9.51 % 10.40 % Total risk-based capital ratio 8.00 % n/a 12.96 % 14.33 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Primis Bank ​ ​ ​ ​ ​ ​ ​ Leverage ratio 4.00 % 5.00 % 9.35 % 11.24 % Common equity tier 1 capital ratio 7.00 % 6.50 % 11.51 % 12.40 % Tier 1 risk-based capital ratio 8.50 % 8.00 % 11.51 % 12.40 % Total risk-based capital ratio 10.50 % 10.00 % 12.71 % 13.59 % (1) Prompt corrective action provisions are not applicable at the bank holding company level. Primis Financial Corp. and Primis Bank are required to meet minimum capital requirements set forth by regulatory authorities. 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. Primis Financial Corp. and Primis Bank remain well-capitalized under Basel III capital requirements. Primis Bank had a capital conservation buffer of 4.71% at June 30, 2023, which exceeded the 2.50% minimum requirement below which the regulators may impose limits on distributions. Primis Bank’s capital position is consistent with being well-capitalized under the regulatory framework for PCA. CRITICAL ACCOUNTING POLICIES (Restated) The critical accounting policies are discussed in MD&A in our restated Annual Report on Form 10-K/A for the year ended December 31, 2022. 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/A for the year ended December 31, 2022. 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/A. ​ 59 Table of Contents ​ ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Revised and Restated) We are engaged primarily in the business of investing funds obtained from deposits and borrowings into interest-earning loans and investments. Consequently, our earnings depend to a significant extent on our net interest income, which is the difference between the interest income on loans and other investments and the interest expense on deposits and borrowings. To the extent that our interest-bearing liabilities do not reprice or mature at the same time as our interest-earning assets, we are subject to interest rate risk and corresponding fluctuations in net interest income. Our Asset-Liability Committee (“ALCO”) meets regularly and is responsible for reviewing our interest rate sensitivity position and establishing policies to monitor and limit exposure to interest rate risk. The policies established by the ALCO are reviewed and approved by our Board of Directors. We have employed asset/liability management policies that seek to manage our net interest income, without having to incur unacceptable levels of credit or investment risk. We use simulation modeling to manage our interest rate risk, and review quarterly interest sensitivity. This approach uses a model which generates estimates of the change in our economic value of equity (“EVE”) over a range of interest rate scenarios. EVE is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts using assumptions including estimated loan prepayment rates, reinvestment rates and deposit decay rates. The following tables are based on an analysis of our interest rate risk as measured by the estimated change in EVE resulting from instantaneous and sustained parallel shifts in the yield curve (plus 400 basis points or minus 100 basis points, measured in 100 basis point increments) as of June 30, 2023 and December 31, 2022. All changes are within our Asset/Liability Risk Management Policy guidelines. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of Economic Value of Equity ​ ​ As of June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic Value of ​ ​ Economic Value of Equity ​ Equity as a % of Change in Interest Rates ​ ​ ​ ​ $ Change ​ % Change ​ Total ​ Equity in Basis Points (Rate Shock) Amount From Base From Base Assets Book Value ​ ​ (dollar amounts in thousands) Up 400 ​ $ 503,320 ​ $ (57,915) (10.32) % 13.02 % 128.92 % Up 300 ​ 515,991 ​ (45,244) (8.06) % 13.35 % 132.16 % Up 200 ​ 527,895 ​ (33,340) (5.94) % 13.65 % 135.21 % Up 100 ​ 551,187 ​ (10,048) (1.79) % 14.26 % 141.18 % Base ​ 561,235 ​ — — % 14.52 % 143.75 % Down 100 ​ 556,910 ​ (4,325) (0.77) % 14.40 % 142.64 % Down 200 ​ 534,924 ​ (26,311) (4.69) % 13.84 % 137.01 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of Economic Value of Equity ​ ​ As of December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic Value of ​ ​ Economic Value of Equity ​ Equity as a % of Change in Interest Rates ​ ​ ​ ​ $ Change ​ % Change ​ Total ​ Equity in Basis Points (Rate Shock) Amount From Base From Base Assets Book Value ​ ​ (dollar amounts in thousands) Up 400 ​ $ 481,135 ​ $ (63,410) (11.64) % 13.49 % 123.70 % Up 300 ​ 496,136 ​ (48,409) (8.89) % 13.91 % 127.55 % Up 200 ​ 510,807 ​ (33,738) (6.20) % 14.32 % 131.32 % Up 100 ​ 534,163 ​ (10,382) (1.91) % 14.98 % 137.33 % Base ​ 544,545 ​ — — % 15.27 % 140.00 % Down 100 ​ 539,297 ​ (5,248) (0.96) % 15.12 % 138.65 % Down 200 ​ 513,948 ​ (30,597) (5.62) % 14.41 % 132.13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 60 Table of Contents Our interest rate sensitivity is also monitored by management through the use of a model that generates estimates of the change in the net interest income (“NII”) over a range of interest rate scenarios. NII depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them. In this regard, the model assumes that the composition of our interest sensitive assets and liabilities existing at June 30, 2023 and December 31, 2022 remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. All changes are within our ALM Policy guidelines at June 30, 2023 and December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of Net Interest Income ​ ​ As of June 30, 2023 ​ ​ Adjusted Net Interest Income Change in Interest Rates ​ ​ ​ ​ $ Change in Basis Points (Rate Shock) Amount From Base ​ ​ (dollar amounts in thousands) Up 400 ​ $ 101,999 ​ $ (13,566) Up 300 ​ 104,695 ​ (10,870) Up 200 ​ 107,389 ​ (8,176) Up 100 ​ 112,004 ​ (3,561) Base ​ 115,565 ​ — Down 100 ​ 117,594 ​ 2,029 Down 200 ​ 117,636 ​ 2,071 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sensitivity of Net Interest Income ​ ​ As of December 31, 2022 ​ ​ Adjusted Net Interest Income Change in Interest Rates ​ ​ ​ ​ $ Change in Basis Points (Rate Shock) Amount From Base ​ ​ (dollar amounts in thousands) Up 400 ​ $ 108,514 ​ $ (12,447) Up 300 ​ 111,127 ​ (9,834) Up 200 ​ 113,730 ​ (7,231) Up 100 ​ 117,811 ​ (3,150) Base ​ 120,961 ​ — Down 100 ​ 122,070 ​ 1,109 Down 200 ​ 120,687 ​ (274) ​ Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in EVE and NII sensitivity requires the making of certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. Accordingly, although the EVE tables and NII tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net worth and NII. Sensitivity of EVE and NII are modeled using different assumptions and approaches. ​ ITEM 4 – CONTROLS AND PROCEDURES (Restated) (a) Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this quarterly report on Form 10-Q/A, under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d -15(e) under the Securities Exchange Act of 1934) utilizing the framework established in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon that evaluation, our CEO and CFO have concluded that these controls and procedures are not 61 Table of Contents effective as of the end of the period covered by this Quarterly Report on Form 10-Q/A. This conclusion was reached as a result of the continued remediation of previously identified material weaknesses in its internal controls over financial reporting as further described in Item 9A in the restated 2022 Annual Report on Form 10-K/A related to complex accounting arrangements and also due to the identification of an additional material weakness related to the transfer of certain loans to another financial institution during the six months ended June 30, 2023. Management identified the additional material weakness over the Company’s internal controls over financial reporting for the six months ended June 30, 2023 related to accounting determinations for transfers of financial assets including lack of a formally designed process and procedure for evaluation of loan transfers. The existing procedures did not outline the process to be taken and individuals to be involved in assessment of the proper accounting for loan transfers and were not sufficient enough to facilitate a proper conclusion on loan transfer transactions. As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Amendment. The Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2023, at the reasonable assurance level, because of the material weakness in internal controls, which were disclosed in the Company's restated Annual Report on Form 10-K/A for the year ended December 31, 2022 (with respect to the Consumer Program) and Current Report on Form 8-K on March 1, 2024 (with respect to the loan transfers). Notwithstanding the material weaknesses, the Company’s management, including the CEO and CFO, has concluded that the condensed consolidated financial statements, included in the Form 10-Q/A, for the three and six months ended June 30, 2023, fairly present, in all material respects, the Company's financial condition, results of operations and cash-flows for the periods presented in conformity with generally accepted accounting principles ​ Remediation Plans (i) Complex accounting arrangements Management continues to review and make changes to the overall design of its internal control environment, including implementing additional internal controls over the identification of complex agreements the Company enters into and ensuring the appropriate level of review of these agreements by an individual with the requisite accounting expertise. The Company is adding additional internal controls to its financial close and reporting process to enhance the effectiveness of internal controls over financial reporting to require appropriate levels of accounting management review of new transactions. Additionally, the Company will seek appropriate third-party accounting expertise when it determines a transaction contains complex arrangements that management does not have sufficient expertise to assess and conclude upon. The material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period. The Company has made progress in the remediation efforts related to the material weakness and anticipates the control weakness to be remediated as soon as possible. (ii) Loan transfers Management continues to review and make changes to the overall design of its internal control environment, including implementing additional internal controls over the identification of loan transfer transactions and management review of the transactions. The Company has added additional internal controls to its financial close and reporting process to enhance the effectiveness of internal controls over financial reporting. The material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period. The Company has made progress in the remediation efforts related to the material weakness and anticipates the control weakness to be remediated as soon as possible. The Company’s remediation efforts include: ● created a specific control in its quarterly financial close process to facilitate the identification of loan transfers and trigger an accounting review; ● created a process to assess loan transfers in accordance with applicable accounting guidance; 62 Table of Contents ● established procedures to enable the accounting assessment in accordance with U.S. GAAP; and ● developed criteria that facilitates the decision process for use of outside legal counsel to assist in evaluating the legal isolation requirement. The Company’s actions are subject to ongoing executive management review and are also subject to audit committee oversight. If the Company is unable to successfully remediate the material weakness, or if in the future, the Company identifies further material weaknesses in its internal control over financial reporting, the Company may not detect errors on a timely basis, and its condensed consolidated financial statements may be materially misstated. Management may determine that additional measures are required to address control deficiencies, strengthen internal control over financial reporting, or it may determine to modify the remediation measures described above. (b) Changes in Internal Control over Financial Reporting . As a result of the acquisition of Primis Mortgage, the Company is continuously working to integrate Primis Mortgage into its internal control over financial reporting process. Except for the changes in connection with this integration of Primis Mortgage and the material weaknesses noted above, there were no changes in our internal controls over financial reporting that occurred during the three and six months ended June 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. PART II - OTHER INFORMATION ITEM 1 – LEGAL PROCEEDINGS Primis and Primis Bank are from time to time a party, as both plaintiff and defendant, to various claims and proceedings arising in the ordinary course of the Bank’s business, including administrative and/or legal proceedings that may include employment-related claims, as well as claims of lender liability, breach of contract, and other similar lending-related claims. While the ultimate resolution of these matters cannot be determined at this time, the Bank’s management presently believes that such matters, individually and in the aggregate, will not have a material adverse effect on the Bank’s financial condition or results of operations. There are no proceedings pending, or to management’s knowledge, threatened, that represent a significant risk against Primis or Primis Bank as of June 30, 2023. ITEM 1A – RISK FACTORS (Restated) There were no changes to the risk factors that were previously disclosed in our restated Annual Report on Form 10-K/A for the year ended December 31, 2022, except for the addition of the item below. Recent negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations. The recent bank failures and related negative media attention have generated significant market trading volatility among publicly traded bank holding companies and, in particular, regional, as well as community banks like the Company. These developments have negatively impacted customer confidence in regional and community banks, which could prompt customers to maintain their deposits with larger financial institutions. Further, competition for deposits has increased in recent periods, and the cost of funding has similarly increased, putting pressure on our net interest margin. If we were required to sell a portion of our securities portfolio to address liquidity needs, we may incur losses, including as a result of the negative impact of rising interest rates on the value of our securities portfolio, which could negatively affect our earnings and our capital. If we were required to raise additional capital in the current environment, any such capital raise may be on unfavorable terms, thereby negatively impacting book value and profitability. While we have taken actions to improve our funding, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs. We also anticipate increased regulatory scrutiny – in the course of routine examinations and otherwise – and new regulations directed towards banks of similar size to Primis Bank, designed to address the recent negative developments in the banking industry, all of which may increase our costs of doing business and reduce our profitability. Among other 63 Table of Contents things, there may be an increased focus by both regulators and investors on deposit composition, the level of uninsured deposits, losses embedded in the held-to-maturity portion of our securities portfolio, contingent liquidity, CRE composition and concentration, capital position and our general oversight and internal control structures regarding the foregoing. As a result, Primis Bank could face increased scrutiny or be viewed as higher risk by regulators and the investor community. ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES Not applicable. ITEM 3 – DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4 – MINE SAFETY DISCLOSURES Not applicable. ITEM 5 – OTHER INFORMATION Pursuant to Item 408(a) of Regulation S-K, none of the Company's directors or executive officers adopted , terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2023. ITEM 6 – EXHIBITS (Restated) (a) Exhibits. ​ ​ ​ Exhibit No. Description ​ ​ ​ 3.1 ​ Articles of Incorporation (incorporated herein by reference to Exhibit 3.1 to Primis Financial Corp.’s (formerly Southern National’s) Registration Statement on Form S-1 (Registration No. 333-136285) filed August 4, 2006) ​ ​ ​ 3.2 ​ Certificate of Amendment to the Articles of Incorporation dated January 31, 2005 (incorporated herein by reference to Exhibit 3.2 to Primis Financial Corp.’s (formerly Southern National’s) Registration Statement on Form S-1 (Registration No. 333-136285) filed on August 4, 2006) ​ ​ ​ 3.3 ​ Certificate of Amendment to the Articles of Incorporation dated April 13, 2006 (incorporated herein by reference to Exhibit 3.3 to Primis Financial Corp.’s (formerly Southern National’s) Registration Statement on Form S-1 (Registration No. 333-136285) filed on August 4, 2006) ​ ​ ​ 3.4 ​ Articles of Amendment to the Articles of Incorporation dated June 30, 2021 (incorporated herein by reference to Exhibit 3.1 to Primis Financial Corp.’s Current Report on Form 8-K filed on June 30, 2021) ​ ​ ​ 3.5 ​ Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to Primis Financial Corp.’s Current Report on Form 8-K filed on June 30, 2021) ​ ​ ​ 31.1* ​ Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 31.2* ​ Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . 64 Table of Contents ​ ​ ​ 32.1** ​ Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 . ​ ​ ​ 101 ​ T he following materials from Primis Financial Corp. Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2023, formatted in Inline XBRL (Extensible Business Reporting Language), filed herewith: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (unaudited), (iii) Consolidated Statement of Changes in Stockholders’ Equity (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements (unaudited). ​ ​ ​ 104 ​ The cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). + Management contract or compensatory plan or arrangement * Filed with this Quarterly Report on Form 10-Q/A ** Furnished with this Quarterly Report on Form 10-Q/A ​ ​ 65 Table of Contents Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ​ ​ ​ ​ ​ Primis Financial Corp. ​ ​ (Registrant) ​ ​ ​ ​ ​ ​ November 1, 2024 ​ /s/ Dennis J. Zember, Jr. (Date) ​ Dennis J. Zember, Jr. ​ ​ President and Chief Executive Officer ​ ​ ​ ​ ​ ​ ​ ​ ​ November 1, 2024 ​ /s/ Matthew Switzer (Date) ​ Matthew Switzer ​ ​ Executive Vice President and Chief Financial Officer ​ ​ ​ ​ ​ 66