Primis Mortgage Company, Subsidiary of Primis Bank, Becomes First Banked Owned Originator to Adopt FICO® Score 10 T to Increase Access to Homeownership

Rhea-AI Summary

Primis Bank, backed by FICO's innovative scoring model, aims to boost non-conforming mortgage lending with FICO® Score 10 T, enhancing credit risk management and increasing mortgage originations.

Insights

Financial Analyst

The adoption of FICO® Score 10 T by Primis Bank signifies a strategic move that could potentially enhance the bank's risk assessment capabilities and lending efficiency. The claimed improvements in predictive accuracy of up to 5% in mortgage originations and up to 17% reduction in default risks present a notable advancement in credit scoring technology. This could lead to a more optimized balance sheet, with better-managed credit risk and improved profitability from mortgage lending operations. For investors, this may translate into a more robust financial performance and potentially higher returns on equity, given that mortgage lending is a significant revenue stream for many banks.

Market Research Analyst

Primis Bank's early adoption of the FICO® Score 10 T positions it as an innovator within the competitive banking landscape, which may attract tech-savvy consumers and first-time homebuyers. This move could enhance the bank's market share in the mortgage sector by offering more competitive and accessible loan products. Moreover, it may set a precedent for other financial institutions to follow, potentially accelerating the industry-wide adoption of advanced credit scoring models. The broader implications for the mortgage industry include a shift towards more data-driven and precise lending practices, which could impact the overall health of the housing market and financial stability.

Economist

The integration of FICO® Score 10 T into Primis Bank's mortgage lending process may have positive macroeconomic implications. By enabling more accurate risk assessments, the bank can contribute to financial inclusion by potentially extending credit to underserved segments without compromising on credit quality. This could lead to a stimulation of the housing market, as more individuals become eligible for mortgages. However, it's essential to monitor the long-term effects on default rates and the housing market's stability, as overly optimistic projections could result in unintended consequences if economic conditions change.

Tech-Driven Bank to Tap FICO’s Most Predictive Score for Non-Conforming Mortgage Products

BOZEMAN, Mont.--(BUSINESS WIRE)-- FICO, a global analytics software leader, has announced that Primis Bank, an FDIC-insured and backed institution, is the first bank to adopt FICO® Score 10 T. By tapping FICO’s newest, most innovative, and predictive scoring model, Primis Mortgage is positioned to help more borrowers achieve homeownership and continue its impressive 120 percent year-over-year growth trajectory.

This move is a demonstration of Primis’ tech-forward strategy and dedication to helping more first-time buyers into homes. In using FICO® Score 10 T for its non-conforming mortgage products, Primis Mortgage will be able to better evaluate new applications in real time and make more data-driven lending decisions.

“Primis means first, and we are pleased to be the first bank to adopt FICO’s most innovative score for mortgage originations,” said Greg Richardson, Executive Vice President of Capital Markets at Primis. “Using FICO Score 10 T can result in more predictive cash flows, which benefits lenders, investors and borrowers alike.”

FICO® Score 10 T provides even greater precision in making lending decisions. FICO® Score 10 T can help lenders better manage credit risk and default rates when extending competitive credit offers to consumers. Compared to the versions of the FICO® Score used by Fannie Mae and Freddie Mac today, FICO® Score 10 T can enable an increase in mortgage originations of up to 5 percent (without taking on additional credit risk) or reduce default risk and losses by up to 17 percent. The more predictive FICO Score 10 T also helps lenders project cash flows more accurately.

“Through the adoption of FICO’s newest, most predictive and innovative score, Primis Mortgage is proving its commitment to innovation,” said Julie May, Vice President and General Manager of Scores at FICO. “By using FICO Score 10 T, Primis Mortgage will be able to provide borrowers with access to credit while supporting the bank’s continued growth and financial inclusion initiatives.”

Primis’ adoption of FICO® Score 10 T blazes the trail for banks and demonstrates continued momentum around broader usage of the score, as evidenced by FICO’s recent announcements with mortgage lenders Movement Mortgage and CrossCountry Mortgage.

FICO is committed to assisting mortgage industry participants looking to transition to its most current model, FICO^® Score 10 T. The FICO Score Migration Resource Center provides a detailed guide to support organizations through their score transition with key planning steps and activities, in addition to implementation best practices.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and other countries, improving risk management, credit access and transparency.

Learn more at https://www.fico.com.

Join the conversation at https://twitter.com/fico & https://www.fico.com/en/blogs/.

For FICO news and media resources, visit www.fico.com/news.

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

About Primis Bank

Managing more than $3.85 billion in assets, Primis is the first bank to get it right. Primis brings the backing of an FDIC institution with the brains of a tech company — offering both security and ease; a solid foundation that’s future proof; and sophisticated offerings that are super simple to navigate. Primis breaks through all the fine print, wait times, and red tape — bringing to market services that actually serve and solutions that solve real life problems. Some say Primis is doing things different, we say we’re doing things right.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240213215367/en/

Julie Huang

press@fico.com

Source: FICO

FAQ

What scoring model is Primis Bank adopting for non-conforming mortgage products?

Primis Bank is adopting FICO® Score 10 T for its non-conforming mortgage products.

How does FICO® Score 10 T benefit lenders, investors, and borrowers?

FICO® Score 10 T can result in more predictive cash flows, benefiting lenders, investors, and borrowers alike.

What percentage increase in mortgage originations can FICO® Score 10 T enable without additional credit risk?

FICO® Score 10 T can enable an increase in mortgage originations of up to 5 percent without taking on additional credit risk.

How much can default risk and losses be reduced by with FICO® Score 10 T?

FICO® Score 10 T can reduce default risk and losses by up to 17 percent.

What benefits does FICO Score 10 T offer in making lending decisions?

FICO Score 10 T provides even greater precision in making lending decisions, helping lenders better manage credit risk and default rates.