Primis Financial Corp. operates as the bank holding company for Primis Bank (bank) that provides a range of financial services to individuals and small and medium sized businesses.
The bank has branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. The 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...
Primis Financial Corp. operates as the bank holding company for Primis Bank (bank) that provides a range of financial services to individuals and small and medium sized businesses.
The bank has branches in Virginia and Maryland and also provides services to customers through certain online and mobile applications. The 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. The bank invests in real estate-related securities, including collateralized mortgage obligations and agency mortgage backed securities. The bank’s principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings. The bank offers a broad range of deposit products, including checking (NOW), savings, money market accounts, and certificates of deposit. The 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.
Banking Services
The company’s principal business is the acquisition of deposits from the general public through its branch offices, digital platform, and deposit intermediaries and the use of these deposits to fund its loan and investment security portfolios. The company seek to be a full-service bank that provides a wide variety of financial services to its middle market corporate clients, as well as to its retail clients. The company is an active commercial lender, and also invest funds in mortgage-backed securities, collateralized mortgage obligations, securities issued by agencies of the federal government, and obligations of states and political subdivisions.
Lending Activities
The company offers a wide range of commercial banking services; however, it is focused 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, including home equity lines of credit. The company is a Small Business Administration (‘SBA’) lender with Preferred Lending Partner (‘PLP’) status that allows it to offer this program nationwide. The company also invest in real estate-related securities, including collateralized mortgage obligations and agency mortgage backed securities. The company’s principal sources of funds for loans and investing in securities are deposits and, to a lesser extent, borrowings.
Commercial Lending
Commercial Business Lending. These loans consist of lines of credit, revolving credit facilities, demand loans, term loans, equipment loans, SBA loans, stand-by letters of credit, and unsecured loans. Commercial business loans are generally secured by business assets, equipment, accounts receivable, inventory, and other collateral, such as readily marketable stocks and bonds with adequate margins, cash value in life insurance policies and savings and time deposits at the bank.
Commercial Real Estate Lending: Commercial real estate lending includes loans for permanent financing. Commercial real estate lending typically involves higher loan principal amounts and the repayment of loans is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Owner occupied real estate is evaluated in conjunction with the operations of the business.
Construction Lending: The company provides construction loans for commercial, multi-family, assisted living and other non-residential properties, and builder/developer lines for established companies in its market footprint. Construction loan borrowers are generally pre-qualified for the permanent loan by the company or a third party.
Secured Asset Based Lending (SABL): The company has developed a proprietary Asset Based Lending software system that allows the bank to monitor the collateral of its commercial borrowers who have pledged their working assets (accounts receivables and other qualifying assets, such as inventory) as collateral. SABL has the ability to track other offsets (e.g. other loans the customer has with the bank) to the line of credit. SABL serves to provide more stringent controls and supervision that this type of lending requires.
SBA Lending: The company has developed expertise in the federally guaranteed SBA programs. The SBA programs provide economic development programs, which finance start-up and expansion of small businesses. The company is a nationwide Preferred Lender. As an SBA Preferred Lender, the company’s pre-approved status allows it to quickly respond to customers’ needs. Under the SBA program, the company generally originate and fund SBA 7(a) and 504 loans.
Panacea Practice Solutions: The company, through its Panacea Financial division, provides financing for medical, dental and veterinary businesses. Financing purposes cover a range of needs of the borrowers to include acquisition, start-up, expansion, real estate purchase and refinance, leasehold, and equipment financing, as well as practice buy-ins.
Mortgage Warehouse Lending: The company provides warehouse lending lines of credit to residential mortgage originators. Program parameters and underwriting guidelines are processed and monitored through the company’s Warehouse Loan System (WLS) to ensure program compliance.
Consumer Lending
The company offers various types of secured and unsecured consumer loans. The company make consumer loans primarily for personal, family or household purposes.
Residential Mortgage: The company originates residential mortgage loans for its portfolio through Primis Mortgage Company. The company also purchases originated residential mortgages from its Warehouse Line clients, as well as other loan originators. The company has no sub-prime loans.
Home Equity Lines of Credit: The company offers credit lines secured by primary residential properties with maximum loan-to-values of 80%. The product provides for a 10 year draw period followed by a 20 year repayment period.
Secured Personal Loans: The company offers secured personal loans for a variety of purposes, including auto, motorcycle, boats, and recreational vehicles. Pledged collateral could also include marketable securities and certificates of deposits.
Life Premium Finance: The company offers life insurance premium financing. The loan is utilized to pay the annual premiums due on the whole or universal life policy. The loan is fully secured by the cash value of the policy and personal liquid assets of the borrower or guarantor.
Unsecured Personal Loans: The company offers unsecured personal loans up to $50,000 and overdraft protection loans up to $10,000, based on specified underwriting criteria. The company also offer these types of loans through an agreement with a third-party that sources and originates them for it based on its credit underwriting criteria.
Panacea Consumer Loans: The company offers several unsecured consumer loan products to include student loan refinancing and pro re nata (‘PRN’) loans. PRN loans may be utilized by graduating doctors to fund costs as they move into their chosen professions.
Deposit Activities
The company offers a broad range of deposit products, including checking, NOW, savings, and money market accounts and certificates of deposit, supporting the needs of businesses and individuals.
Commercial deposit products are enhanced by a robust suite of treasury and cash management services, including investment/sweep accounts; wire transfer services; employer services/payroll processing services; zero balance accounts; night depository services; depository transfers; merchant services (third party); ACH originations; business debit cards; controlled disbursement accounts; remote deposit capture; and mobile and online banking.
Other products and services offered by the bank include debit cards, ATM services, notary services, and wire transfer.
Lines of Businesses
Panacea Financial: In November 2020, the company launched the Panacea Financial division, which focuses on providing unique financial products and services for the medical, dental and veterinary communities. The company offers personal loans, student debt refinance and practice loans, as well as deposit products nationally. The company has partnerships with fourteen national and state associations. Additionally, its In-Training Medical/Dental School Loan Refinance product allows physicians and dentists that are in training the opportunity to refinance their student debt at a lower interest rate, while benefiting from affordable monthly payments during training. The division has successfully built a nationally recognized brand with a growing team of industry-leading commercial bankers experienced in providing financial services to its target communities across the United States.
Life Premium Financing: The company launched a division in the fourth quarter of 2021 focused on financing life insurance premiums for high-net-worth individuals across the United States.
Primis Mortgage Company: In May 2022, the bank acquired Primis Mortgage Company, a regional residential mortgage company. Primis Mortgage Company has since expanded to offer residential mortgages in the majority of the U.S. Residential mortgage loans originated through Primis Mortgage Company are primarily sold in the secondary market for fee income.
Digital Banking
In 2022, the company successfully launched its digital bank platform. The platform includes an all-new mobile banking application that provides a quick and seamless account opening process all from within the app.
In 2021, the company launched its V1BE service, the first bank delivery app for on-demand ordering of branch services. V1BE brings in-branch banking services right to the customer’s doorstep, including cash delivery/withdrawals, cash pick-up/deposits, check deposits, change orders, cashier checks, and the instant issue of replacement debit cards. V1BE was initially piloted in the Richmond market but now covers the majority of the company’s footprint, including the greater Washington, D.C. region. With V1BE, the company is able to support any market and grow customer relationships without the need for a large branch presence.
Investment Portfolio
As of December 31, 2023, the company’s investment portfolio included residential government-sponsored mortgage-backed securities; obligations of states and political subdivisions; corporate securities; collateralized loan obligations; residential government-sponsored collateralized mortgage obligations; government-sponsored agency securities; agency commercial mortgage-backed securities; and SBA pool securities.
Strategy
The company focuses on building a new, innovative, and better banking experience for its consumers and small and medium-sized businesses. The key elements of the company’s strategy include maintaining a strong and efficient community bank in core markets; supplementing core community bank growth and profitability with business lines that can generate above-average risk-adjusted returns, such as the Panacea Financial Division, the Life Premium Finance Division, and Primis Mortgage Company; and perfecting enhanced digital offerings that allow the company to attract new deposit customers at scale both in and out of its footprint.
Supervision and Regulation
The business of the company and the bank is subject to extensive regulation and supervision under federal and state law, including oversight by the Board of Governors of the Federal Reserve System (Federal Reserve) and the Virginia Bureau of Financial Institutions (VBFI), a regulatory division of the Virginia State Corporation Commission.
Supervision, regulation, and examination of the company, the bank, and its respective subsidiaries by the appropriate regulatory agencies, are intended primarily for the protection of consumers, bank depositors and the Deposit Insurance Fund (DIF) of The Federal Deposit Insurance Corporation (FDIC) and the U.S. banking and financial system, rather than holders of its capital stock.
The company is subject to extensive supervision and regulation by the Federal Reserve pursuant to the Bank Holding Company Act of 1956, as amended (the Bank Holding Company Act). The company is required to file with the Federal Reserve periodic reports and such other information as the Federal Reserve may request. Ongoing supervision is provided through regular examinations by the Federal Reserve and other means that allow the regulators to gauge management’s ability to identify, assess and control risk in all areas of operations in a safe and sound manner and to ensure compliance with laws and regulations. In addition to regulation by the Federal Reserve as a bank holding company, the company is subject to supervision and regulation by the VBFI under the banking and general business corporation laws of the Commonwealth of Virginia.
The company is registered with the Federal Reserve as a bank holding company. Bank holding companies generally are limited to the business of banking, managing or controlling banks, and other activities that the Federal Reserve determines to be closely related to banking, or managing or controlling banks as to be a proper incident thereto. The bank is an FDIC-insured depository institution and thus subject to these requirements.
The company is required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board, and NASDAQ.
The operation of the bank is subject to state and federal statutes applicable to state banks and the regulations of the Federal Reserve, the FDIC and the Consumer Financial Protection Bureau (CFPB). The operations of the bank may also be subject to applicable Office of the Comptroller of the Currency (OCC) regulation to the extent state banks are granted parity with national banks.
The bank is subject to regulation, reporting, and periodic examinations by the Federal Reserve and the VBFI. These regulatory authorities routinely examine the bank’s reserves, loan and investment quality, consumer compliance, management policies, procedures and practices, and other aspects of operations. The Federal Reserve has adopted the Federal Financial Institutions Examination Council’s (FFIEC) rating system and assigns each financial institution a confidential composite rating based on an evaluation and rating of six essential components of an institution’s financial condition and operations, including Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Sensitivity to Market Risk, as well as the quality of risk management practices.
The Deposit Insurance Fund (DIF) of the FDIC insures the deposits of the bank generally up to a maximum of $250,000 per depositor, per insured bank, for each account ownership category. The FDIC charges insured depository institutions quarterly premiums to maintain the DIF.
The bank is subject to Federal Reserve regulations that require the bank to maintain reserves against transaction accounts (primarily checking accounts). These reserve requirements are subject to annual adjustment by the Federal Reserve.
The bank has augmented its systems and procedures to meet the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) regulations and will continue to revise and update its policies, procedures and controls to reflect changes required by law.
The bank is subject to the provisions of the CRA, which imposes a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods. The Federal Reserve’s assessment of the bank’s CRA record is made available to the public. The bank has a rating of ‘Satisfactory’ in its most recent CRA evaluation.
The bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act and the Fair Housing Act, both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction. The Department of Justice, and the federal bank regulatory agencies have issued an Interagency Policy Statement on Discrimination in Lending that provides guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA.
History
The company was founded in 2004. The company was formerly known as Southern National Bancorp of Virginia, Inc. and changed its name to Primis Financial Corp. in 2021.
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