Primis Financial (FRST) risk factors, FY2025 10-K

Primis Financial's FY2025 10-K, filed Mar 16, 2026, lists 39 risk factors in 4 groups. Against the prior year's 40: 5 new, 6 dropped, 15 substantially reworded.

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Risk factors listed
394 groups
New this year
5vs 40 last year
Dropped
6since the prior 10-K
Substantially reworded
15of those kept
Section length
12k wordsItem 1A

What the changes say

  • Interest rate cuts by the Federal Reserve now explicitly drive earnings risk, while real-time payment networks and customer fraud emerge as new operational threats.

What changed since the prior 10-K

New

  • NewMarket Risks

    Our earnings are subject to interest rate risk

    Federal Reserve rate cuts reduced the target federal funds rate to 3.50% to 3.75% by late 2025, pressuring our net interest income.

  • NewMarket Risks

    a number of areas, such as DEI, environmental stewardship, including with respect to climate change, human capital management, support for our local communities, corporate governance, and transparency, or fail to consider ESG factors in our business operations

    Negative publicity tied to diverse client identities or controversial industries could harm our reputation, customer retention, and stock price.

  • NewOperational Risks

    Industry adoption of real-time payments networks could negatively impact financial performance through reductions in product profitability, increased liquidity reserves and the potential for increased fraud losses, among other risks

    Real-time payment networks like FedNow and RTP increase our liquidity reserve requirements, reduce float benefits, and raise fraud loss risks.

  • NewOperational Risks

    Financial services companies depend on the accuracy and completeness of information about customers and counterparties and inaccuracies in such information, including as a result of fraud, could adversely impact our business, financial condition and results of operations

    Inaccurate customer information and fraud during economic stress could cause underwriting losses despite our operational controls.

  • NewOperational Risks

    Deposit insurance premiums levied against us could increase

    Changes in FDIC rules, deposit insurance fund levels, or bank failures could force us to pay higher deposit insurance premiums.

Dropped

  • Dropped

    the allowance for credit losses could cause our earnings to decrease. Due to the relatively unseasoned nature of portions of our loan portfolio, we may experience an increase in delinquencies and losses as these loans continue to mature

  • DroppedMarket Risks

    Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance

  • DroppedMarket Risks

    We may be unable to sell loans at the estimated market price utilized to record them in held for sale

  • DroppedOperational Risks

    Our business is susceptible to fraud

  • DroppedOperational Risks

    Deposit insurance premiums levied against banks may increase if the number of bank failures increase or the cost of resolving failed banks increases

  • DroppedOperational Risks

    that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company’s ability to serve as a source of strength to its banking subsidiaries

Reworded

  • 97% rewrittenOperational Risks

    We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated

    Added specific references to artificial intelligence, machine learning, and blockchain as rapid technological changes impacting our competitive position.

  • 91% rewrittenMarket Risks

    ESG and DEI risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price

    Truncated the discussion regarding ESG and DEI scrutiny and reputational risks.

  • 74% rewrittenOperational Risks

    We currently intend to pay dividends on our common stock; however, our future ability to pay dividends is subject to restrictions

    Updated dividend restriction disclosures to extend through 2025 and explicitly cite cash dividends received from the Bank.

  • 69% rewritten

    A portion of our consumer loan portfolio is originated and serviced by a third-party and includes a credit enhancement, which may not be realizable; the inability to utilize such credit enhancement could be detrimental to our financial condition and results of operations

    Updated third-party consumer loan balances to $90 million as of December 31, 2025, following the January 31, 2025 cessation of originations.

    Was: A portion of our consumer loan portfolio is originated and serviced by a third-party and includes a credit enhancement from that third-party which may not be realizable and the inability to utilize it could be detrimental to our financial condition and results of operations

  • 69% rewritten

    We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan, we have no collateral to recover potential losses

    Updated unsecured consumer loan portfolio balance to $183 million, representing 6% of total held for investment loans as of December 31, 2025.

    Was: We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan we have no recourse to collateral in which to recover any potential losses

  • 67% rewrittenMarket Risks

    Declines in asset values may result in impairment charges and adversely affect the value of our investment securities, financial performance and capital

    Added a statement that we did not experience any investment securities impairment in 2025.

  • 53% rewrittenMarket Risks

    Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations

    Added references to U.S. government decisions regarding Federal Reserve appointments and international disagreements as macro economic risk factors.

  • 52% rewrittenFinancial Reporting Risks

    Failure to maintain an effective system of disclosure controls and procedures could have a material adverse effect on our business, results of operations and financial condition and could impact the price of our common stock

    Minor wording adjustments regarding disclosure controls and internal control over financial reporting without altering core meaning.

  • 41% rewritten

    If our allowance for credit losses is not adequate to cover actual loan losses, our earnings will decrease

  • 30% rewritten

    A significant amount of our loans are secured by real estate and any declines in real estate values in our primary markets could be detrimental to our financial condition and results of operations

  • 29% rewritten

    If our nonperforming assets increase, our earnings will suffer

  • 29% rewrittenOperational Risks

    We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business

  • 28% rewrittenOperational Risks

    The development and use of artificial intelligence (AI) presents risks and challenges that may adversely impact our business

  • 24% rewritten

    We are subject to risks related to our concentration of commercial real estate and construction and land development loans

    Was: We are subject to risks related to our concentration of construction and land development and commercial real estate loans

  • 22% rewrittenOperational Risks

    We face significant cyber and data security risk that could result in the disclosure of or access to sensitive, confidential and/or nonpublic personal information, adversely affect our business or reputation and expose us to significant liabilities

    Was: We face significant cyber and data security risk that could result in the disclosure of sensitive, confidential and/or nonpublic personal information, adversely affect our business or reputation and expose us to significant liabilities

All 39 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01We are subject to risks related to our concentration of commercial real estate and construction and land development loans24% rewritten
  2. 02We have a meaningful amount of consumer loans that are unsecured and if the borrower defaults on the loan, we have no collateral to recover potential losses69% rewritten
  3. 03A portion of our consumer loan portfolio is originated and serviced by a third-party and includes a credit enhancement, which may not be realizable; the inability to utilize such credit enhancement could be detrimental to our financial condition and results of operations69% rewritten
  4. 04A significant amount of our loans are secured by real estate and any declines in real estate values in our primary markets could be detrimental to our financial condition and results of operations30% rewritten
  5. 05If our nonperforming assets increase, our earnings will suffer29% rewritten
  6. 06If our allowance for credit losses is not adequate to cover actual loan losses, our earnings will decrease41% rewritten
  7. 07We are subject to credit quality risks and our credit policies may not be sufficient to avoid losses
  8. 08Our mortgage revenue is cyclical and is sensitive to the level of interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits

Market Risks

  1. 09Our earnings are subject to interest rate riskNew
  2. 10Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations53% rewritten
  3. 11Declines in asset values may result in impairment charges and adversely affect the value of our investment securities, financial performance and capital67% rewritten
  4. 12Our stock price can be volatile
  5. 13The trading volume in our common stock is less than that of other larger financial services companies
  6. 14Inflation could negatively impact our business, our profitability and our stock price
  7. 15ESG and DEI risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price91% rewritten
  8. 16a number of areas, such as DEI, environmental stewardship, including with respect to climate change, human capital management, support for our local communities, corporate governance, and transparency, or fail to consider ESG factors in our business operationsNew

Operational Risks

  1. 17Our business strategy includes strategic growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
  2. 18We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated97% rewritten
  3. 19New lines of business, products or services and technological advancements may subject us to additional risks
  4. 20The development and use of artificial intelligence (AI) presents risks and challenges that may adversely impact our business28% rewritten
  5. 21We may not be able to successfully integrate our acquisitions or to realize the anticipated benefits of them
  6. 22all of which could divert resources from regular banking operations. Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit our successful merger integrations
  7. 23The carrying value of goodwill and other intangible assets may be adversely affected
  8. 24We rely on third-party vendors to provide key components of our business infrastructure, which could expose us to operational and financial risks
  9. 25Industry adoption of real-time payments networks could negatively impact financial performance through reductions in product profitability, increased liquidity reserves and the potential for increased fraud losses, among other risksNew
  10. 26We face significant cyber and data security risk that could result in the disclosure of or access to sensitive, confidential and/or nonpublic personal information, adversely affect our business or reputation and expose us to significant liabilities22% rewritten
  11. 27Financial services companies depend on the accuracy and completeness of information about customers and counterparties and inaccuracies in such information, including as a result of fraud, could adversely impact our business, financial condition and results of operationsNew
  12. 28We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business29% rewritten
  13. 29Deposit insurance premiums levied against us could increaseNew
  14. 30Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows
  15. 31Additionally, we could be impacted by current or future negative perceptions and expectations about the prospects for the financial services industry which could worsen over time and result in downward pressure on, and continued or accelerated volatility of, bank securities
  16. 32Future growth or operating results may require us to raise additional capital, but that capital may not be available, be available on unfavorable terms or may be dilutive
  17. 33We may issue a new series of preferred stock or debt securities, which would be senior to our common stock and may cause the market price of our common stock to decline
  18. 34We currently intend to pay dividends on our common stock; however, our future ability to pay dividends is subject to restrictions74% rewritten

Regulatory Risks

  1. 35We are heavily regulated by federal and state agencies; changes in laws and regulations or failures to comply with such laws and regulations may adversely affect our operations and our financial results
  2. 36As further described above under Supervision and Regulation—Capital Requirements, Primis and the Bank each are subject to various regulatory capital requirements administered by the FRB
  3. 37We are subject to commercial real estate lending guidance issued by the federal banking regulators that impacts our operations and capital requirements
  4. 38Changes in accounting standards or assumptions in applying accounting policies could adversely affect us

Financial Reporting Risks

  1. 39Failure to maintain an effective system of disclosure controls and procedures could have a material adverse effect on our business, results of operations and financial condition and could impact the price of our common stock52% rewritten

Other Primis Financial 10-Ks

  • FY2024 10-K risk factors
    40 risks

    Primis Financial faces heavy credit concentration risks, particularly in commercial real estate, construction, and unsecured consumer loans. Earnings are vulnerable to fluctuating interest rates, rising nonperforming assets, and mortgage market cycles. Growth relies on successful acquisitions, capital adequacy, and technology integration.

    Filed Apr 29, 2025
  • FY2023 10-K risk factors
    35 risks

    Primis Financial faces notable risks from high concentrations of real estate loans, unsecured consumer lending, and interest rate volatility.

    Filed Oct 15, 2024

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.