REGULATORY MATTERS

12 Months Ended

Dec. 31, 2022

Regulatory Matters [Abstract]

REGULATORY MATTERS

17.         REGULATORY MATTERS

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 December 31, 2022 and 2021, the most recent regulatory notifications categorized the Bank as well capitalized under 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 December 31, 2022, that Primis meets all capital adequacy requirements to which it is subject.

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:

					Required
					For Capital				To Be Categorized as
	Actual				Adequacy Purposes				Well Capitalized (1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2022
Primis Financial Corp.
Leverage ratio	$	322,390	9.68	%	$	133,279	4.00	%		n/a	n/a
Common equity tier 1 capital ratio		312,390	10.30	%		136,482	4.50	%		n/a	n/a
Tier 1 risk-based capital ratio		322,390	10.63	%		181,976	6.00	%		n/a	n/a
Total risk-based capital ratio		441,902	14.57	%		242,635	8.00	%		n/a	n/a
Primis Bank
Leverage ratio	$	378,659	11.39	%	$	137,290	4.00	%	$	149,830	5.00	%
Common equity tier 1 capital ratio		378,659	12.64	%		134,847	4.50	%		194,779	6.50	%
Tier 1 risk-based capital ratio		378,659	12.64	%		179,796	6.00	%		239,728	8.00	%
Total risk-based capital ratio		414,619	13.84	%		239,728	8.00	%		299,660	10.00	%
December 31, 2021
Primis Financial Corp.
Leverage ratio	$	314,353	9.41	%	$	133,664	4.00	%		n/a	n/a
Common equity tier 1 capital ratio		304,353	13.09	%		104,598	4.50	%		n/a	n/a
Tier 1 risk-based capital ratio		314,353	13.52	%		139,464	6.00	%		n/a	n/a
Total risk-based capital ratio		430,421	18.52	%		185,952	8.00	%		n/a	n/a
Primis Bank
Leverage ratio	$	372,076	11.14	%	$	137,890	4.00	%	$	114,973	5.00	%
Common equity tier 1 capital ratio		372,076	16.18	%		103,476	4.50	%		149,465	6.50	%
Tier 1 risk-based capital ratio		372,076	16.18	%		137,968	6.00	%		183,957	8.00	%
Total risk-based capital ratio		400,836	17.43	%		183,957	8.00	%		229,947	10.00	%

(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 5.84% at December 31, 2022, 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.