Blue Ridge Bankshares, Inc. Announces 2024 Second Quarter Results

Completed capital raise of $161.6 million in private placement, to help fund business transformation

Company on-track to exit its fintech depository operations

Bank capital levels meet enhanced regulatory minimum capital ratios

 RICHMOND, Va., July 25, 2024 /PRNewswire/ — Blue Ridge Bankshares, Inc. (the “Company”) (NYSE American: BRBS), the holding company of Blue Ridge Bank, National Association (“Blue Ridge Bank” or the “Bank”) and BRB Financial Group, Inc. (“BRB Financial Group”), today announced financial results for the quarter ended June 30, 2024.

For the quarter ended June 30, 2024, the Company reported a net loss of $11.4 million, or $0.47 per diluted common share, compared to a net loss of $2.9 million, or $0.15 per diluted common share, for the quarter ended March 31, 2024, and compared to a net loss of $8.6 million, or $0.45 per diluted common share, for the second quarter of 2023. The second quarter 2024 loss included a $6.7 million after-tax negative fair value adjustment recorded for an equity investment in a fintech company.

For the year-to-date period ended June 30, 2024, the Company reported a net loss of $14.3 million, or $0.66 per diluted common share, compared to a net loss of $4.6 million, or $0.25 per diluted common share, for the first half of 2023.

A Message From Blue Ridge Bankshares, Inc. President and CEO, G. William “Billy” Beale:

“We are now several quarters into an expansive initiative to address both the remediation requirements of our primary regulator and our goal to restore Blue Ridge Bank to its core strengths and roots as a premier community financial institution. Today, we have a comprehensive strategy that will guide us in ultimately moving beyond our near-term compliance focus to fundamentally strengthen our position and operating profile.

“Many of the decisions we have made over the past few quarters have had a pronounced near-term impact, most notably on our balance sheet, expense levels, and certainly our bottom line. But these decisions are necessary to drive the meaningful and lasting change at Blue Ridge Bank and position us well for the future.

“That said, I believe we are entering a phase where we are seeing some of the fruits of our labor. As we look at our performance, particularly on a sequential basis, certain key metrics are beginning to reflect this progress. For example:

“Concerning our regulatory remediation efforts, we have moved aggressively to wind down our fintech Banking-as-a-Service (“BaaS”) operations. These plans are on track and are working. Consequently, we have seen steady sequential decreases in BaaS deposits over the past three quarters, and, as of June 30, 2024, BaaS deposits, the majority of our fintech-related deposits, were roughly 7 percent of total deposits – about one-third of what they were this time last year.

“Relatedly, we’ve seen meaningful sequential reductions in regulatory remediation-related expense levels for the past three quarters. In the second quarter of 2024, these levels were roughly one-third of what they were three quarters ago.

“Shrinking the balance sheet to meet liquidity needs and to improve the overall quality and risk profile of our lending portfolio have also been areas of intense focus. While these efforts are ongoing, we have seen a general improvement in our nonperforming loan and asset ratios. As of the end of the 2024 second quarter, the ratio of nonperforming assets to total assets is at its lowest in the past four quarters. As we move forward, we will continue to improve our credit culture and oversight, and to reduce our exposure to non-core loans, while continuing to meet the borrowing needs of our customers.
“Lastly, amidst all this change, our core deposits and their costs have been relatively stable going back several quarters. As we continue our efforts to wind down BaaS operations, reducing the level of high-cost BaaS deposits, we anticipate that our overall cost of deposits will decline in the back half of 2024.

“Clearly, we have much more to do, but it is encouraging to see some early indications of progress against strategy, and I am buoyed by the talent and efforts of our leadership team and the culture we are building. As we move forward, we will increasingly be shifting our focus from the completion of remediation efforts to a deeper examination of our operations and identification of areas where we can improve. This is all toward the goal of creating a revitalized and refocused Blue Ridge Bank that is well-positioned for profitable growth.

“Finally, I am pleased to have the capital raise behind us, which positions the Bank to meet its regulatory capital requirements. With the capital raise, we welcomed three new directors, Trevor Montano, Anthony (Tony) R. Scavuzzo, and Ciaran McMullan. I am certain these individuals will make us a better company; their contributions have been meaningful already. And I am grateful for the five directors that will be departing from our board commensurate with our next annual meeting of shareholders. These directors, Mensel D. Dean, Jr., chairman of our board, Larry Dees, Robert S. Janney, Andrew (Drew) C. Holzwarth, and Richard (Rick) A. Farmer, III, have devoted countless hours to our company. I thank these gentlemen for their dedication and guidance over the many years they have served.”   

Private Placement Stock Offering

On April 3, 2024 and June 13, 2024, the Company closed private placements in which it issued and sold shares of its common and preferred stock for gross proceeds of $150.0 million and $11.6 million, respectively (collectively, the “Private Placements”). At a special meeting of shareholders held June 20, 2024, the Company’s shareholders approved the conversion of the preferred shares issued in the Private Placements into shares of the Company’s common stock. On June 28, 2024, all outstanding shares of the Company’s Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series B were automatically converted into shares of the Company’s common stock. The outstanding shares of the Company’s Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), remained outstanding at June 30, 2024. Subsequent to June 30, 2024, the holder of Series C Preferred Stock received the regulatory non-objection necessary to exchange the shares of Series C Preferred Stock for shares of the Company’s common stock, which the Company intends to complete during the third quarter of 2024. Capital proceeds received, net of issuance costs, from the Private Placements totaled $152.5 million.

The Company intends to use the capital from the Private Placements to propel its near-term strategic initiatives, which include repositioning business lines, supporting organic growth, and further enhancing the Bank’s capital levels, including compliance with the minimum capital ratios set forth in the Bank’s Consent Order with the Office of the Comptroller of the Currency (the “OCC”), which requires the Bank to maintain a tier 1 leverage ratio of 10.0% and a total risk-based capital ratio of 13.0%. As of June 30, 2024, the Bank’s capital ratios exceeded these minimum capital ratios.

Q2 2024 Highlights

(Comparisons for Second Quarter 2024 are relative to First Quarter 2024 unless otherwise noted.)

Net Income:

The net loss in the quarter was $11.4 million, or $0.47 per diluted common share, compared to a net loss of $2.9 million, or $0.15 per diluted common share, for the prior quarter. Loss before income taxes of $12.1 million in the quarter included a $8.5 million, non-cash, fair value adjustment of an equity investment the Company holds in a fintech company and a provision for credit losses of $3.1 million, compared to a $1.0 million recovery of credit losses in the prior quarter. Excluding the fair value adjustment and the provision for/recovery of credit losses, the Company’s pre-tax loss improved by $3.9 million from the prior quarter.

Asset Quality:

As a result of an agreement the Company executed in the current quarter to sell a specialty finance loan to a third party, the Company reclassified this loan to loans held for sale in the second quarter at its estimated fair value and recorded a charge-off of substantially all of the reserve held on the loan, which was provisioned for in prior years.
Nonperforming loans, which include nonaccrual loans and loans past due 90 days or more and accruing interest, improved to $46.0 million, or 1.57% of total assets, at quarter end compared to $53.2 million, or 1.73% of total assets, at the prior quarter end. The decline in nonperforming loans primarily reflects payments received on and a charge-off of substantially all of the reserve related to the previously noted specialty finance loan.

The provision for credit losses was $3.1 million in the quarter compared to a recovery of credit losses of $1.0 million for the prior quarter. The provision in the quarter was related primarily to certain purchased loans and increased reserves for the non-guaranteed portion of government-guaranteed loans, which offset lower reserve needs due to loan portfolio balance reductions. The recovery of provision in the prior quarter was due to lower balances of unfunded loan commitments. Net loan charge-offs were $10.6 million in the quarter, which included the charge-off of the $9.4 million reserve held for the specialty finance loan, as noted previously. This charge-off was the primary driver of a higher net charge-off rate in the quarter of 0.45% compared to 0.04% in the prior quarter, representing an annualized rate of 1.81% and 0.14%, respectively.

The allowance for credit losses (“ACL”) as a percentage of total loans held for investment was 1.24% at quarter end compared to 1.46% at the prior quarter end. Specific reserves associated with the aforementioned specialty finance loan totaled $0 and $9.6 million at June 30, 2024 and March 31, 2024, respectively.

Capital:

The ratio of tangible common stockholders’ equity to tangible total assets was 10.3%1, compared to 5.8%1 at the prior quarter end. Tangible book value per common share was $4.101, compared to $9.041 at the prior quarter end. The changes in these measures from the prior quarter reflects the issuance of 53,922,000 shares of common stock pursuant to the Private Placements.
For the quarter ended June 30, 2024, the Bank’s tier 1 leverage ratio, tier 1 risk-based capital ratio, common equity tier 1 capital ratio, and total risk-based capital ratio were 11.02%, 14.13%, 14.13%, and 15.11%, respectively, compared to 7.44%, 9.28%, 9.28%, and 10.51%, respectively, at the prior quarter end. The increase in these ratios primarily reflects a $110.0 million capital contribution to the Bank in the quarter.
As of June 30, 2024, the Bank’s tier 1 leverage and total risk-based capital ratios exceeded the minimum capital ratios set forth in the Consent Order.

Net Interest Income / Net Interest Margin:

Net interest income was $20.1 million, a decline of $0.3 million from the prior quarter, primarily due to a decline in average balances of interest-earning assets, partially offset by lower average balances of and rates paid on fintech-related deposits and lower average balances of borrowings. Net interest margin improved in the quarter to 2.79% from 2.75% in the prior quarter.

Noninterest Income / Noninterest Expense:

Noninterest income was $0.3 million, including the $8.5 million previously noted negative fair value adjustment for an equity investment, compared to noninterest income of $7.8 million for the prior quarter. Excluding the fair value adjustment, higher noninterest income in the quarter was primarily due to positive fair value adjustments on mortgage servicing rights assets, which were $2.0 million, due to the change in future interest rate expectations. Lower other noninterest income was primarily due to lower income from fintech and other investments in the quarter.
Noninterest expense was $29.3 million compared to $32.5 million for the prior quarter, a decrease of $3.1 million. The decrease was primarily due to lower salaries and employee benefits expense and lower regulatory remediation expenses. Salaries and employee benefits expense in the quarter reflected lower headcount, primarily in the Bank’s government guaranteed lending and compliance areas. Lower regulatory remediation expenses reflect the reduction in the use of third-party resources in the Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) area, as the Bank completes certain requirements under the Consent Order.

Income Tax:

The effective income tax rate for the quarter was 5.1% compared to 12.3% for the prior quarter. The income tax benefit for the quarter includes $2.0 million of provision expense recognized upon surrendering bank-owned life insurance policies, representing the tax effect of the life-to-date income earned on the policies. Taxes on such earnings were previously permanently deferred but became subject to tax upon the surrender of the policies.

Balance Sheet:

Total assets decreased to $2.93 billion from $3.08 billion at the prior quarter end, a decline of $143.1 million, as the Bank purposefully reduced assets to meet the liquidity needs of the fintech BaaS operations wind down and maturities of wholesale funding. Decreases were primarily in loans held for investment, which declined $134.8 million. Other declines included decreases in other equity investments, other investments, and bank-owned life insurance. In the second quarter, the Company reduced its carrying value of an equity investment in a fintech company, as previously noted, and sold certain of its interests in Small Business Investment Company (“SBIC”) investments. Additionally, the Company surrendered the majority of its bank-owned life insurance policies in the quarter and received a portion of the proceeds. These actions, along with the exit of fintech BaaS operations, support the repositioning of the Bank towards a more traditional community bank model.
Total deposit balances decreased to $2.33 billion from $2.47 billion at the prior quarter end, a decrease of $139.9 million. This decrease reflects a $96.3 million reduction of fintech-related balances and a $49.4 million reduction in brokered deposits. Core deposit growth was $43.1 million in the quarter, which excludes the loss of a municipality deposit of approximately $37.3 million, which also resulted in the release of collateral held for this relationship. In the first half of 2024, core deposits, excluding the municipal deposit, increased $107.1 million.
Deposits related to fintech relationships were $206.6 million at June 30, 2024, compared to $303.0 million at the prior quarter end, a decline of $96.3 million. Of the decline, BaaS deposits decreased $100.5 million, partially offset by an increase in fintech corporate deposits. Fintech-related deposits represented approximately 8.9% of total deposits at June 30, 2024 compared to 12.3% of total deposits at the prior quarter end, and 27.1% at June 30, 2023. Excluding wholesale funding, deposits related to fintech relationships represented 11.1% and 15.5% of total deposits at June 30, 2024 and March 31, 2024, respectively. Estimated uninsured deposits as a percentage of total deposits were 17.9% at quarter end compared to 22.4% at the prior quarter end.
Loans held for investment were $2.26 billion at quarter end, a decrease of $134.8 million from the prior quarter end, as the Company purposefully and selectively reduced balances of loans and reclassified a specialty finance loan to loans held for sale, as previously noted. The held for investment loan-to-deposit ratio measured 97.1% as of the end of both periods.
The $65 million borrowing pursuant to the Federal Reserve Bank’s Bank Term Funding Program was repaid at its maturity in the quarter.
Total stockholders’ equity was $325.6 million at quarter end, an increase of $144.7 million from the prior quarter end, primarily due to $152.5 million of net proceeds from the Private Placements.

Income Statement:

Net interest income was $20.1 million for the second quarter of 2024, compared to $20.3 million for the first quarter of 2024, and $23.9 million for the second quarter of 2023. The decline from the second quarter of 2023 was primarily attributable to lower interest and fee income on loans due to lower average balances, and higher interest expense on deposits due to higher average balances of and rates paid on time deposits. This decline was partially offset by lower average balances and rates paid on interest-bearing demand accounts. The majority of fintech BaaS deposits are in interest-bearing demand accounts.

Average balances of interest-earning assets decreased $80.3 million to $2.89 billion in the second quarter of 2024, relative to the prior quarter, and decreased $178.0 million from the year-ago period. Relative to the prior quarter, the decrease reflected a decline in average balances of loans held for investment and securities. Relative to the year-ago period, the decrease in average interest-earning asset balances was due primarily to lower average balances of loans held for investment. The yield on average loans held for investment was 5.80% for the second quarter of 2024, compared to 6.02% for the first quarter of 2024, and 5.84% for the second quarter of 2023.

Average balances of interest-bearing liabilities decreased $183.6 million to $2.23 billion in the second quarter of 2024, relative to the prior quarter, and decreased $118.7 million from the year-ago period. Relative to the prior quarter, the decrease reflected lower average balances of interest-bearing demand and money market accounts, partially offset by higher average balances of time deposits, primarily attributable to wholesale funding. Relative to the prior year, the decrease primarily reflected lower average interest-bearing demand and money market accounts and time deposits.

Cost of funds was 3.02% for the second quarter of 2024, compared to 3.03% for the first quarter of 2024, and 2.49% for the second quarter of 2023, while cost of deposits was 2.84%, 2.85%, and 2.21%, for the same respective periods. Higher deposit and overall funding costs in the 2024 periods reflect the impact of higher market interest rates and a shift in the mix of funding. Cost of deposits, excluding wholesale deposits, was 2.28% for the quarter compared to 2.20% in the prior quarter and the year-ago period.

Net interest margin was 2.79% for the second quarter of 2024 compared to 2.75% in the prior quarter and 3.12% in the year-ago period. The increase in net interest margin relative to the prior period reflects the impact of a slight decrease in funding costs.

The Company recorded a provision for credit losses of $3.1 million for the second quarter of 2024, compared to a recovery of $1.0 million for the first quarter of 2024, and a provision of $10.0 million for the second quarter of 2023. The provision in the second quarter of 2024 was related primarily to certain purchased loans and increased reserves for the non-guaranteed portion of government-guaranteed loans, which offset lower reserve needs due to loan portfolio balance reductions. The recovery of provision in the first quarter of 2024 was due to lower balances of unfunded loan commitments, while the provision for credit losses in the second quarter of 2023 was primarily attributable to specific reserves on the previously reported group of specialty finance loans.

Noninterest income was $0.3 million for the second quarter of 2024, compared to $7.8 million for the first quarter of 2024, and $9.7 million for the second quarter of 2023. The decrease relative to the first quarter of 2024 was primarily due to the previously noted $8.5 million, non-cash, negative fair value adjustment of an equity investment the Company holds in a fintech company. In the year-ago period, the Company recognized $2.4 million in gains on sale of government guaranteed loans compared to nominal amounts in the 2024 periods.

Noninterest expense was $29.3 million for the second quarter of 2024, compared to $32.5 million for the first quarter of 2024, and $34.1 million for the second quarter of 2023. Noninterest expense decreased $3.1 million from the prior quarter and decreased $4.7 million from the year-ago period. The decrease relative to the first quarter of 2024 was primarily driven by lower salaries and employee benefits and lower regulatory remediation expenses. The decrease relative to the year-ago period primarily reflects lower legal and regulatory filing expenses, primarily attributable to corporate, employee benefit plans, and other employment matters in the 2023 period, and lower other contractual services expenses, as the Bank outsourced more BSA/AML compliance services to augment its compliance staff in the prior year.

Balance Sheet:

Loans held for investment were $2.26 billion at June 30, 2024, compared to $2.39 billion at March 31, 2024, and $2.45 billion at June 30, 2023. These declines are attributable to the Company’s plan to purposefully and selectively reduce assets to partially meet the liquidity needs of the fintech BaaS operations wind down.

Total deposits were $2.33 billion at June 30, 2024, a decrease of $139.9 million from the prior quarter end, and a decrease of $287.3 million from the year-ago period. Relative to the prior quarter end, the decrease reflected lower interest-bearing demand and money market deposits, primarily attributable to fewer fintech relationships and, to a lesser extent, decreases in noninterest-bearing deposits. These declines were partially offset by higher time deposits, primarily wholesale deposits. Fintech-related deposits declined $96.3 million in the second quarter of 2024 as the Company winds down its fintech BaaS depository operations. Excluding fintech-related deposits and wholesale funding, total deposits during the quarter increased $5.8 million from the prior quarter end. This increase reflects the loss of a $37.3 million municipality deposit, allowing the release of the collateral held for it. In the first half of 2024, deposits excluding fintech-related and wholesale funding, increased $69.8 million.

The Company previously reported that it had submitted to the Federal Deposit Insurance Corporation (the “FDIC”) an application for a waiver of the prohibition on the acceptance, renewal, or rollover of brokered deposits. Such prohibition was a result of the Consent Order. Subsequent to the end of the second quarter, the Bank received approval from the FDIC allowing the Bank to accept, renew, or rollover brokered deposits. The approval is for a period of time and total amount.

Noninterest-bearing deposits represented 20.2%, 20.1%, and 22.0% of total deposits at June 30, 2024, March 31, 2024, and June 30, 2023, respectively. Fintech-related balances represented 8.9%, 12.3%, and 27.1% of total deposits as of the same respective periods.

The held for investment loan to deposit ratio was 97.1% at both June 30, 2024 and the prior quarter end, and 93.9% at the year-ago period-end. The increase on a comparative basis was due primarily to lower total deposit levels attributable to lower fintech-related balances.

Fintech Operations:

Interest and fee income related to fintech partnerships represented approximately $1.9 million, $1.7 million, and $3.4 million of total revenue for the second quarter of 2024, the first quarter of 2024, and the second quarter of 2023, respectively. Deposits related to fintech relationships were $206.6 million at June 30, 2024, compared to $303.0 million at the prior quarter end, and $707.6 million at June 30, 2023. Included in deposits related to fintech relationships were assets managed by BRB Financial Group’s trust division of $20.9 million as of June 30, 2024.

Non-GAAP Financial Measures:

The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing practices in the banking industry. However, management uses certain non-GAAP measures, including tangible assets, tangible common equity, tangible book value per common share, and tangible common equity to tangible total assets, to supplement the evaluation of the Company’s financial condition and performance. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the financial condition, capital position, and operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP measures are included at the end of this release.

Forward-Looking Statements: 

This release of the Company contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on its expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements.

The following factors, among others, could cause the Company’s financial performance to differ materially from that expressed in such forward-looking statements:

the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations;
the effects of, and changes in, the macroeconomic environment and financial market conditions, including monetary and fiscal policies, interest rates and inflation;
the impact of, and the ability to comply with, the terms of the Consent Order with the OCC, including the heightened capital requirements and other restrictions therein, and other regulatory directives;
the imposition of additional regulatory actions or restrictions for noncompliance with the Consent Order or otherwise;
the Company’s involvement in, and the outcome of, any litigation, legal proceedings or enforcement actions that may be instituted against the Company;
reputational risk and potential adverse reactions of the Company’s customers, suppliers, employees, or other business partners;
the Company’s ability to manage its fintech relationships, including implementing enhanced controls and procedures, complying with OCC directives and applicable laws and regulations, maintaining deposit levels and the quality of loans associated with these relationships and, in certain cases, winding down certain of these partnerships;
the quality and composition of the Company’s loan and investment portfolios, including changes in the level of the Company’s nonperforming assets and charge-offs;
the Company’s management of risks inherent in its loan portfolio, the credit quality of its borrowers, and the risk of a prolonged downturn in the real estate market, which could impair the value of the Company’s collateral and its ability to sell collateral upon any foreclosure;
the ability to maintain adequate liquidity by retaining deposits and secondary funding sources, especially if the Company’s or the banking industry’s reputation becomes damaged;
the ability to maintain capital levels adequate to support the Company’s business and to comply with OCC directives;
the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers;
changes in consumer spending and savings habits;
the willingness of users to substitute competitors’ products and services for the Company’s products and services;
deposit flows;
changes in technological and social media;
potential exposure to fraud, negligence, computer theft, and cyber-crime;
adverse developments in the banking industry generally, such as recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior;
changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or Blue Ridge Bank in particular, more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products;
the impact of changes in financial services policies, laws, and regulations, including laws, regulations, and policies concerning taxes, banking, securities, real estate, and insurance, and the application thereof by regulatory bodies;
the effect of changes in accounting standards, policies, and practices as may be adopted from time to time;
estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Company’s assets and liabilities;
geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad;
the occurrence or continuation of widespread health emergencies or pandemics, significant natural disasters, severe weather conditions, floods and other catastrophic events; and
other risks and factors identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections and elsewhere in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and in filings the Company makes from time to time with the U.S. Securities and Exchange Commission (“SEC”).

The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in filings the Company makes from time to time with the SEC. Any one of these risks or factors could have a material adverse impact on the Company’s results of operations or financial condition, or cause the Company’s actual results, performance or achievements to differ materially from those expressed in, or implied by, forward-looking information and statements contained in this release. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on its forward-looking statements. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements, which speak only as of the date of this release. The Company does not undertake to, and will not, update or revise these forward-looking statements after the date hereof, whether as a result of new information, future events, or otherwise.

1 Non-GAAP financial measure. Further information can be found at the end of this press release. 

Blue Ridge Bankshares, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except share data)

(unaudited)
June 30, 2024

December 31,

 2023 (1)

Assets

Cash and due from banks

$             124,607

$             110,491

Restricted cash

5,924

10,660

Federal funds sold

5,219

4,451

Securities available for sale, at fair value

307,427

321,081

Restricted equity investments

18,236

18,621

Other equity investments

4,354

12,905

Other investments

21,099

29,467

Loans held for sale

54,377

46,337

Loans held for investment, net of deferred fees and costs

2,259,279

2,430,947

Less: allowance for credit losses

(28,036)

(35,893)

Loans held for investment, net

2,231,243

2,395,054

Accrued interest receivable

14,172

14,967

Premises and equipment, net

21,746

22,348

Right-of-use asset

8,208

8,738

Bank owned life insurance

42,446

48,453

Other intangible assets

4,548

5,382

Mortgage servicing rights, net

29,862

27,114

Deferred tax asset, net

21,051

21,556

Other assets

18,553

19,929

Total assets

$          2,933,072

$          3,117,554

Liabilities and Stockholders’ Equity

Deposits:

Noninterest-bearing demand

$             470,128

$             506,248

Interest-bearing demand and money market deposits

769,870

1,049,536

Savings

106,619

117,923

Time deposits

979,222

892,325

Total deposits

2,325,839

2,566,032

FHLB borrowings

202,900

210,000

FRB borrowings

65,000

Subordinated notes, net

39,822

39,855

Lease liability

8,947

9,619

Other liabilities

29,950

41,059

Total liabilities

2,607,458

2,931,565

Commitments and contingencies

Stockholders’ Equity:

Common stock, no par value; 150,000,000 and 50,000,000 shares authorized

at June 30, 2024 and December 31, 2023, respectively;  and 73,503,647 and

19,198,379 shares issued and outstanding at June 30, 2024 and December 31,

2023, respectively

300,976

197,636

Preferred stock, $50 per share par value; 250,000 shares authorized at June

30, 2024 and December 31, 2023, respectively; 2,732 and 0 shares issued and

outstanding at June 30, 2024 and December 31, 2023, respectively

137

Additional paid-in capital

50,155

252

Retained earnings

18,829

33,157

Accumulated other comprehensive loss, net of tax

(44,483)

(45,056)

Total stockholders’ equity

325,614

185,989

Total liabilities and stockholders’ equity

$          2,933,072

$          3,117,554

(1) Derived from audited December 31, 2023 Consolidated Financial Statements.

Blue Ridge Bankshares, Inc.

Consolidated Statements of Income (unaudited)

For the Three Months Ended 

As restated

(Dollars in thousands, except per common share data)

June 30, 2024

March 31, 2024

June 30, 2023

Interest income:

Interest and fees on loans

$                            36,196

$                             38,346

$                            38,326

Interest on taxable securities

2,399

2,438

2,543

Interest on nontaxable securities

62

60

94

Interest on deposit accounts and federal funds sold

1,974

1,687

1,497

Total interest income

40,631

42,531

42,460

Interest expense:

Interest on deposits

17,272

18,485

14,624

Interest on subordinated notes

552

560

547

Interest on FHLB and FRB borrowings

2,722

3,137

3,399

Total interest expense

20,546

22,182

18,570

Net interest income

20,085

20,349

23,890

Provision for credit losses – loans

3,600

10,613

Recovery of credit losses – unfunded commitments

(500)

(1,000)

(600)

     Total provision for (recovery of) credit losses

3,100

(1,000)

10,013

Net interest income after provision for credit losses

16,985

21,349

13,877

Noninterest income:

Fair value adjustments of other equity investments

(8,537)

(7)

(281)

Residential mortgage banking income

3,090

2,664

3,144

Mortgage servicing rights

2,020

729

1,151

Gain on sale of government guaranteed loans

11

110

2,384

Wealth and trust management

623

520

462

Service charges on deposit accounts

423

398

349

Increase in cash surrender value of BOLI

333

337

292

Bank and purchase card, net

513

242

560

Other

1,832

2,832

1,675

Total noninterest income

308

7,825

9,736

Noninterest expense:

Salaries and employee benefits

14,932

16,045

14,518

Occupancy and equipment

1,303

1,524

1,913

Data processing

896

1,106

1,131

Legal and regulatory filings

363

447

2,753

Advertising and marketing

183

297

337

Communications 

1,436

1,173

1,171

Audit and accounting fees

295

1,155

503

FDIC insurance

1,817

1,377

1,246

Intangible amortization

276

287

335

Other contractual services

1,760

1,717

3,218

Other taxes and assessments

588

943

803

Regulatory remediation

1,397

2,644

2,388

Other

4,098

3,759

3,736

Total noninterest expense

29,344

32,474

34,052

Loss before income taxes

(12,051)

(3,300)

(10,439)

Income tax benefit

(616)

(407)

(1,826)

Net loss

$                          (11,435)

$                             (2,893)

$                            (8,613)

Dividends on preferred stock

150

Net loss attributable to common shareholders

$                          (11,585)

$                             (2,893)

$                            (8,613)

Basic and diluted loss per common share

$                               (0.47)

$                                (0.15)

$                               (0.45)

Blue Ridge Bankshares, Inc.

Consolidated Statements of Income (unaudited)

For the Six Months Ended

As restated

(Dollars in thousands, except per common share data)

June 30, 2024

June 30, 2023

Interest income:

Interest and fees on loans

$                       74,542

$                      75,457

Interest on taxable securities

4,837

5,171

Interest on nontaxable securities

122

186

Interest on deposit accounts and federal funds sold

3,661

2,536

Total interest income

83,162

83,350

Interest expense:

Interest on deposits

35,757

25,955

Interest on subordinated notes

1,112

1,100

Interest on FHLB and FRB borrowings

5,859

7,209

Total interest expense

42,728

34,264

Net interest income

40,434

49,086

Provision for credit losses – loans

3,600

9,503

Recovery of credit losses – unfunded commitments

(1,500)

(1,000)

     Total provision for credit losses

2,100

8,503

Net interest income after provision for credit losses

38,334

40,583

Noninterest income:

Fair value adjustments of other equity investments

(8,544)

(332)

Residential mortgage banking income

5,754

6,344

Mortgage servicing rights

2,749

(746)

Gain on sale of government guaranteed loans

121

4,793

Wealth and trust management

1,143

894

Service charges on deposit accounts

821

692

Increase in cash surrender value of BOLI

670

574

Bank and purchase card, net

755

900

Other

4,664

3,900

Total noninterest income

8,133

17,019

Noninterest expense:

Salaries and employee benefits

30,977

29,807

Occupancy and equipment

2,827

3,482

Data processing

2,002

2,477

Legal and regulatory filings

810

3,987

Advertising and marketing

480

623

Communications 

2,609

2,302

Audit and accounting fees

1,450

649

FDIC insurance

3,194

1,975

Intangible amortization

563

690

Other contractual services

3,477

4,157

Other taxes and assessments

1,531

1,605

Regulatory remediation

4,041

3,522

Other

7,857

7,623

Total noninterest expense

61,818

62,899

Loss before income taxes

(15,351)

(5,297)

Income tax benefit

(1,023)

(654)

Net loss

$                     (14,328)

$                       (4,643)

Dividends on preferred stock

150

     Net loss attributable to common shareholders

$                     (14,478)

$                       (4,643)

Basic and diluted loss per common share

$                         (0.66)

$                         (0.25)

Quarter Summary of Selected Financial Data (unaudited)

As of and for the Three Months Ended

As restated

(Dollars and shares in thousands, except per common share data)

June 30,

March 31,

December 31,

September 30,

June 30,

Income Statement Data:

2024

2024

2023

2023

2023

Interest income

$                     40,631

$                     42,531

$                     43,160

$                     42,485

$                     42,460

Interest expense

20,546

22,182

21,397

20,293

18,570

Net interest income

20,085

20,349

21,763

22,192

23,890

Provision for (recovery of) credit losses

3,100

(1,000)

2,770

11,050

10,013

Net interest income after provision for loan losses

16,985

21,349

18,993

11,142

13,877

Noninterest income

308

7,825

4,107

7,415

9,736

Noninterest expenses, excluding goodwill impairment

29,344

32,474

30,583

37,795

34,052

Goodwill impairment

26,826

Loss before income taxes

(12,051)

(3,300)

(7,483)

(46,064)

(10,439)

Income tax benefit

(616)

(407)

(1,724)

(4,693)

(1,826)

Net loss

(11,435)

(2,893)

(5,759)

(41,371)

(8,613)

Dividends on preferred stock

150

Net loss attributable to common shareholders

(11,585)

(2,893)

(5,759)

(41,371)

(8,613)

Per Common Share Data:

Loss per common share – basic and diluted

$                      (0.47)

$                      (0.15)

$                      (0.30)

$                      (2.18)

$                      (0.45)

Book value per common share 

4.15

9.24

9.69

9.53

12.21

Tangible book value per common share – Non-GAAP

4.10

9.04

9.47

9.30

10.55

Balance Sheet Data:

Total assets

$               2,933,072

$               3,076,187

$               3,117,554

$               3,262,713

$               3,214,424

Average assets

3,085,137

3,164,932

3,165,886

3,249,112

3,277,283

Average interest-earning assets

2,886,186

2,966,491

2,979,065

3,038,795

3,064,104

Loans held for investment

2,259,279

2,394,089

2,430,947

2,446,370

2,454,431

Allowance for credit losses  

28,036

35,025

35,893

49,631

38,567

Purchase accounting adjustments (discounts) on acquired loans

4,408

4,873

5,117

5,831

6,381

Loans held for sale

54,377

34,902

46,337

69,640

64,102

Securities available for sale, at fair value

307,427

314,394

321,081

313,930

340,617

Noninterest-bearing demand deposits

470,128

496,375

506,248

572,969

575,989

Fintech Banking-as-a-Service (“BaaS”) deposits

172,456

272,973

370,968

493,009

468,719

Total deposits

2,325,839

2,465,776

2,566,032

2,776,151

2,613,094

Subordinated notes, net 

39,822

39,838

39,855

39,871

39,888

FHLB and FRB advances

202,900

345,000

275,000

215,000

284,100

Average interest-bearing liabilities

2,228,071

2,411,683

2,362,774

2,354,360

2,346,722

Total stockholders’ equity

325,614

180,906

185,989

182,837

231,271

Average stockholders’ equity

318,042

183,901

223,840

238,530

257,117

Weighted average common shares outstanding – basic 

24,477

19,178

19,033

19,015

18,851

Weighted average common shares outstanding – diluted

24,477

19,178

19,033

19,015

18,851

Financial Ratios:

Return on average assets (1)

-1.48 %

-0.37 %

-0.73 %

-5.09 %

-1.05 %

Return on average equity (1)

-14.38 %

-6.29 %

-10.29 %

-69.38 %

-13.40 %

Total loan to deposit ratio

99.5 %

98.5 %

96.5 %

90.6 %

96.4 %

Held for investment loan-to-deposit ratio

97.1 %

97.1 %

94.7 %

88.1 %

93.9 %

Fintech BaaS deposits to total deposits ratio

7.4 %

11.1 %

14.5 %

17.8 %

17.9 %

Net interest margin (1)

2.79 %

2.75 %

2.92 %

2.92 %

3.12 %

Cost of deposits (1)

2.84 %

2.85 %

2.73 %

2.46 %

2.21 %

Cost of funds (1)

3.02 %

3.03 %

2.91 %

2.73 %

2.49 %

Efficiency ratio

143.9 %

115.3 %

118.2 %

127.7 %

101.3 %

Regulatory remediation expenses

1,397

2,644

3,155

3,782

2,388

Capital and Asset Quality Ratios:

Average stockholders’ equity to average assets

10.3 %

5.8 %

7.1 %

7.3 %

7.8 %

Allowance for credit losses to loans held for investment

1.24 %

1.46 %

1.48 %

2.03 %

1.57 %

Ratio of net charge-offs to average loans outstanding (1)

1.81 %

0.14 %

2.84 %

0.09 %

1.28 %

Nonperforming loans to total assets

1.57 %

1.73 %

2.02 %

2.51 %

2.54 %

Nonperforming assets to total assets

1.57 %

1.73 %

2.02 %

2.51 %

2.54 %

Nonperforming loans to total loans

1.99 %

2.19 %

2.55 %

3.25 %

3.41 %

Reconciliation of Non-GAAP Financial Measures (unaudited):

Tangible Common Equity:

Total stockholders’ equity 

$                   325,614

$                   180,906

$                   185,989

$                   182,837

$                   231,271

Less: preferred stock (including additional paid-in capital)

(20,605)

Common stockholders’ equity

$                   305,009

$                   180,906

$                   185,989

$                   182,837

$                   231,271

Less: Goodwill and other intangibles, net of deferred tax liability (2)

(3,552)

(3,913)

(4,179)

(4,286)

(31,427)

Tangible common equity (Non-GAAP)

$                   301,456

$                   176,993

$                   181,810

$                   178,551

$                   199,844

Total common shares outstanding 

73,504

19,584

19,198

19,192

18,934

Book value per common share 

$                        4.15

$                        9.24

$                        9.69

$                        9.53

$                      12.21

Tangible book value per common share (Non-GAAP)

4.10

9.04

9.47

9.30

10.55

Tangible Common Equity to Tangible Total Assets

Total assets 

$                2,933,072

$                3,076,187

$                3,117,554

$                3,262,713

$                3,214,424

Less: Goodwill and other intangibles, net of deferred tax liability (2)

(3,552)

(3,913)

(4,179)

(4,286)

(31,427)

Tangible total assets (Non-GAAP)

$                2,929,520

$                3,072,274

$                3,113,375

$                3,258,427

$                3,182,997

Tangible common equity (Non-GAAP)

$                   301,456

$                   176,993

$                   181,810

$                   178,551

$                   199,844

Tangible common equity to tangible total assets (Non-GAAP)

10.3 %

5.8 %

5.8 %

5.5 %

6.3 %

(1) Annualized.

(2) Excludes mortgage servicing rights.

SOURCE Blue Ridge Bankshares, Inc.

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