BRBS 8-K
Blue Ridge Bankshares, Inc. (BRBS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On July 25, 2024, Blue Ridge Bankshares, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is being furnished as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is being furnished pursuant to Item 2.02 above.
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Exhibit No. |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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BLUE RIDGE BANKSHARES, INC. |
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Date: |
July 25, 2024 |
By: |
/s/ Judy C. Gavant |
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Judy C. Gavant |
Exhibit 99.1
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:
“Relatedly, we've seen meaningful sequential reductions in regulatory remediation-related
“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:
Asset Quality:
Capital:
Net Interest Income / Net Interest Margin:
Noninterest Income / Noninterest Expense:
Income Tax:
Balance Sheet:
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 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. |
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Consolidated Balance Sheets |
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(Dollars in thousands, except share data) |
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(unaudited) |
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December 31, 2023 (1) |
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Assets |
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Cash and due from banks |
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$ |
124,607 |
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$ |
110,491 |
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Restricted cash |
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5,924 |
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10,660 |
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Federal funds sold |
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5,219 |
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4,451 |
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Securities available for sale, at fair value |
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307,427 |
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321,081 |
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Restricted equity investments |
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18,236 |
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18,621 |
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Other equity investments |
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4,354 |
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12,905 |
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Other investments |
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21,099 |
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29,467 |
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Loans held for sale |
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54,377 |
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46,337 |
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Loans held for investment, net of deferred fees and costs |
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2,259,279 |
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2,430,947 |
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Less: allowance for credit losses |
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(28,036 |
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(35,893 |
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Loans held for investment, net |
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2,231,243 |
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2,395,054 |
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Accrued interest receivable |
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14,172 |
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14,967 |
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Premises and equipment, net |
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21,746 |
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22,348 |
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Right-of-use asset |
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8,208 |
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8,738 |
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Bank owned life insurance |
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42,446 |
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48,453 |
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Other intangible assets |
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4,548 |
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5,382 |
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Mortgage servicing rights, net |
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29,862 |
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27,114 |
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Deferred tax asset, net |
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21,051 |
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21,556 |
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Other assets |
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18,553 |
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19,929 |
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Total assets |
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$ |
2,933,072 |
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$ |
3,117,554 |
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Liabilities and Stockholders’ Equity |
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Deposits: |
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Noninterest-bearing demand |
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$ |
470,128 |
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$ |
506,248 |
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Interest-bearing demand and money market deposits |
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769,870 |
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1,049,536 |
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Savings |
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106,619 |
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117,923 |
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Time deposits |
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979,222 |
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892,325 |
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Total deposits |
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2,325,839 |
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2,566,032 |
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FHLB borrowings |
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202,900 |
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210,000 |
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FRB borrowings |
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— |
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65,000 |
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Subordinated notes, net |
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39,822 |
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39,855 |
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Lease liability |
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8,947 |
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9,619 |
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Other liabilities |
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29,950 |
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41,059 |
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Total liabilities |
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2,607,458 |
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2,931,565 |
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Commitments and contingencies |
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Stockholders’ Equity: |
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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 |
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300,976 |
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197,636 |
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Preferred stock, $50 per share par value; 250,000 shares authorized at June 30, 2024 and December 31, 2023, respectively; 2,732 and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively |
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137 |
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— |
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Additional paid-in capital |
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50,155 |
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252 |
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Retained earnings |
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18,829 |
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33,157 |
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Accumulated other comprehensive loss, net of tax |
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(44,483 |
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(45,056 |
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Total stockholders’ equity |
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325,614 |
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185,989 |
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Total liabilities and stockholders’ equity |
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$ |
2,933,072 |
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$ |
3,117,554 |
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(1) Derived from audited December 31, 2023 Consolidated Financial Statements. |
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Blue Ridge Bankshares, Inc. |
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Consolidated Statements of Income (unaudited) |
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For the Three Months Ended |
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As restated |
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(Dollars in thousands, except per common share data) |
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June 30, 2024 |
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March 31, 2024 |
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June 30, 2023 |
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Interest income: |
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Interest and fees on loans |
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$ |
36,196 |
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$ |
38,346 |
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$ |
38,326 |
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Interest on taxable securities |
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2,399 |
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2,438 |
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2,543 |
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Interest on nontaxable securities |
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62 |
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60 |
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94 |
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Interest on deposit accounts and federal funds sold |
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1,974 |
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1,687 |
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1,497 |
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Total interest income |
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40,631 |
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42,531 |
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42,460 |
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Interest expense: |
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Interest on deposits |
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17,272 |
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18,485 |
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14,624 |
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Interest on subordinated notes |
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552 |
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560 |
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547 |
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Interest on FHLB and FRB borrowings |
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2,722 |
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3,137 |
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3,399 |
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Total interest expense |
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20,546 |
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22,182 |
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18,570 |
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Net interest income |
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20,085 |
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20,349 |
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23,890 |
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Provision for credit losses - loans |
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3,600 |
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— |
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10,613 |
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Recovery of credit losses - unfunded commitments |
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(500 |
) |
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(1,000 |
) |
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(600 |
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Total provision for (recovery of) credit losses |
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3,100 |
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(1,000 |
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10,013 |
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Net interest income after provision for credit losses |
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16,985 |
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21,349 |
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13,877 |
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Noninterest income: |
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Fair value adjustments of other equity investments |
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(8,537 |
) |
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(7 |
) |
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(281 |
) |
Residential mortgage banking income |
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3,090 |
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2,664 |
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3,144 |
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Mortgage servicing rights |
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2,020 |
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729 |
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1,151 |
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Gain on sale of government guaranteed loans |
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11 |
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110 |
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2,384 |
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Wealth and trust management |
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623 |
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520 |
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462 |
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Service charges on deposit accounts |
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423 |
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398 |
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349 |
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Increase in cash surrender value of BOLI |
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333 |
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337 |
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292 |
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Bank and purchase card, net |
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513 |
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242 |
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560 |
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Other |
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1,832 |
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2,832 |
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1,675 |
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Total noninterest income |
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308 |
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7,825 |
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9,736 |
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Noninterest expense: |
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Salaries and employee benefits |
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14,932 |
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16,045 |
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14,518 |
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Occupancy and equipment |
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1,303 |
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1,524 |
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1,913 |
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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 |
) |
Blue Ridge Bankshares, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||