8-K: Primis Financial Corp. Receives Stay Extension on Delisting, Hearing Set for December

Primis Financial Corp. has been granted an extension on the temporary stay of its delisting from the Nasdaq, with a hearing scheduled for December 3, 2024.

Summary

• Primis Financial Corp. received a notice from Nasdaq on October 3, 2024, indicating its common stock would be delisted due to non-compliance with Nasdaq Listing Rule 5250(c)(1).
• The non-compliance stemmed from the company's failure to timely file its 2023 Annual Report (Form 10-K) and quarterly reports for Q1 and Q2 2024 (Form 10-Qs).
• Primis appealed the delisting decision on October 8, 2024, requesting a hearing before the Nasdaq Hearings Panel.
• A temporary stay of delisting was granted, and subsequently extended on October 24, 2024, pending the hearing.
• The hearing is scheduled for December 3, 2024, and a final decision will be issued by the Panel.
• The company has filed its Form 10-K on October 15, 2024 and is working to file the outstanding Form 10-Qs as soon as possible.
• As of September 30, 2024, Primis had $4.0 billion in total assets, $3.3 billion in total loans held for income, and $3.3 billion in total deposits.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the ongoing delisting risk and the company's failure to meet reporting deadlines. While a stay extension was granted, the underlying issues remain unresolved.

Positives

• The company has received an extension on the delisting stay, allowing more time to regain compliance.
• Primis has filed its overdue Form 10-K.
• The company is actively working to file the outstanding quarterly reports.

Negatives

• The company is still not in compliance with Nasdaq listing rules.
• There is a risk that Nasdaq may deny the company's appeal and delist its securities.
• The company has experienced significant delays in its financial reporting.

Risks

• There is a risk of further delays in the company's financial reporting.
• The ongoing review may identify additional errors or control deficiencies in the company's accounting practices.
• Restatements may subject the company to unanticipated costs or regulatory penalties.
• The company may be unable to regain compliance with Nasdaq listing rules.
• There is a risk of investigations or actions by governmental authorities or regulators.
• The company may become subject to shareholder lawsuits or claims.
• There are inherent limitations in internal control over financial reporting and disclosure controls and procedures.

Future Outlook

The company is working to file the outstanding Form 10-Qs as soon as practicable and regain compliance with Nasdaq listing rules. However, there are risks of further delays and potential delisting.

Management Comments

• The company is working diligently to complete and file the Form 10-Qs.
• The company plans to file the Form 10-Qs as promptly as practicable.

Industry Context

This announcement highlights the challenges faced by companies in maintaining compliance with exchange listing rules, particularly regarding timely financial reporting. Delays in financial reporting can lead to significant consequences, including potential delisting.

Comparison to Industry Standards

• Many financial institutions are required to file their financial reports on time to maintain their listing on exchanges like Nasdaq.
• Companies like PacWest Bancorp (PACW) and First Republic Bank (FRC) have faced similar challenges related to financial reporting and compliance, although the specific reasons for their issues may differ.
• The delay in filing financial reports is a significant deviation from industry standards, which typically require timely and accurate reporting to maintain investor confidence and regulatory compliance.

Stakeholder Impact

• Shareholders face the risk of delisting and potential loss of investment value.
• Employees may experience uncertainty due to the company's financial and regulatory challenges.
• Customers may have concerns about the stability of the financial institution.
• Creditors may be concerned about the company's ability to meet its obligations.

Next Steps

• The company will attend a hearing before the Nasdaq Hearings Panel on December 3, 2024.
• The company will continue to work on filing the outstanding Form 10-Qs.
• The company will await the final decision from the Nasdaq Hearings Panel.

Key Dates

Keywords

delisting, Nasdaq, financial reporting, compliance, Form 10-K, Form 10-Q, stay extension, hearing, Primis Financial Corp