Primis Financial in McLean, Va., lowered its second-quarter profit after downgrading three performing loans.
The company disclosed in a regulatory filing that the changes reduced quarterly earnings by $6 million to $2.4 million.
The changes stem from updated evaluations, including a $6.4 million commercial loan moved to “special mention,” a $30.7 million office property loan downgraded to “substandard accruing,” and a $40.1 million office property loan moved to “substandard nonaccrual.” The latter required a $7.7 million specific reserve.
The adjustments also included reversing $300,000 in accrued interest on the nonaccrual loan and $600,000 in pooled reserves on the substandard loans. Primis emphasized that, despite the downgrades, one of the office loans remains current on payments, while the commercial loan is well-collateralized.