Primis in Va. restating more financial results to address ‘material weakness’

Primis Financial in McLean, Va., plans to restate more financial results to address accounting issues.

The $3.9 billion-asset company disclosed in a regulatory filing that its financial statements for 2022 “should no longer be relied upon” due to errors in the methodology used to account for consumer loans originated and serviced through an unidentified third party. The bank funded the loans.

Primis, which identified a “material weakness” in its internal control, plans to make changes to how it accounts for the consumer loan portfolio. The company said it will provide further specifics about the material weakness and its remediation plan when it amends its 2022 annual report.

The company disclosed in March that it would need to restate filings for the first three quarters of 2023 to address $33.7 million of loans its bank transferred to other financial institutions. Primis determined that the transfers, which it accounted for as sales, should have been treated as secured borrowings.

The company noted that the 2023 restatements would lower net income for the first nine months of 2023 by 26%, to $1.6 million.

Primis also said in March that it would amend fourth-quarter results because of accounting issues tied to a third-party managed loan portfolio. The company said the adjustment would increase the quarter’s net income by 4%, to $6.1 million.