CHARLOTTESVILLE, Va., April 27,
2023 /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"), announced today
financial results for the quarter ended March 31, 2023.
For the first quarter of 2023, the Company reported net income
from continuing operations of $1.6
million, or $0.09 per diluted
common share, compared to $6.3
million, or $0.33 per diluted
common share, for the fourth quarter of 2022, and $17.4 million, or $0.93 per diluted common share, for the first
quarter of 2022.
Key Data Points In Light Of Recent Industry Events
- Total deposit balances increased by $258.5 million, or 10.3%, from year-end
2022.
- Estimated insured deposits comprised 68% of total deposits at
March 31, 2023, compared to 64% at
December 31, 2022. Excluding
fintech deposit relationships, insured deposits represented 77% of
total deposits at March 31,
2023.
- Federal Home Loan Bank of Atlanta ("FHLB") borrowings declined from
year-end 2022 by $72.6 million, to
$239.1 million at March 31, 2023; immediately available, undrawn
capacity with the FHLB was $270.1
million as of March 31, 2023.
- The Company did not access the Bank Term Funding Program
("BTFP") established by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"); immediately available,
undrawn capacity under the BTFP was $26.9
million as of March 31,
2023.
- After-tax unrealized losses of $41.7
million in the available-for-sale investment portfolio
totaled 16.2% of total stockholders' equity at March 31, 2023, representing $2.18 of book value per common share.
- As the Company has no securities classified as
held-to-maturity, the tangible common equity to tangible assets
ratio of 6.8%1 and tangible book value per share of
$11.931 at March 31, 2023, fully reflect all unrealized
losses in the investment portfolio.
A Message From Blue Ridge Bankshares, Inc. President and CEO,
Brian Plum:
"Our team put in a fully committed effort in the first quarter
of this year. We continued to work diligently in addressing issues
cited in the OCC Formal Agreement, and the events of March allowed
us to reinforce our commitment to customers and strengthen
relationships. We conservatively added additional funding to
the balance sheet, which did create a negative impact on earnings
in the last part of the quarter.
External regulatory remediation expenses of $1.1 million were incurred in the quarter. A
decline in the fair value of our mortgage servicing rights of
$1.8 million due to market conditions
negatively impacted earnings, along with a $0.9 million expense related to the previous sale
of Paycheck Protection Program loans.
The continued sharp increase in short-term interest rates has
significantly impacted funding costs. A highly competitive
environment became even more competitive following the events in
March. We will continue to aggressively pursue core deposit
growth. We reconfigured our market incentive plans coming
into 2023 with the expectation of additional rate increases, and
anticipate the behaviors spurred by that change will create
positive short and long-term outcomes.
We are fully engaged and aware of the challenges that exist in
financial services today. Rapid interest rate increases of
historic proportions following an extended period of a low-rate
environment will create disruptions. We will continue to
zealously focus on our clients and the client experience, stay
focused on our regulatory remediation, constantly calibrate our
perspective, and look for additional areas to improve operating
efficiencies through technology and the appropriate rightsizing and
redeployment of resources across business lines."
Q1 2023 Highlights
(Comparisons for Q1 2023 are relative to Q4 2022 unless
otherwise noted.)
- Formal Written Agreement:
-
- As previously disclosed, Blue Ridge Bank entered into a formal
written agreement (the "Agreement") with the Office of the
Comptroller of the Currency ("OCC") on August 29, 2022. The Agreement principally
concerns the Bank's fintech line of business and requires the Bank
to continue enhancing its controls for assessing and managing the
third-party, BSA/AML, and IT risks stemming from its fintech
partnerships. A complete copy of the Agreement was filed as
an exhibit to the Company's Form 8-K filed with the Securities and
Exchange Commission ("SEC") on September 1,
2022 and can be accessed on the SEC's website (www.sec.gov)
and the Company's website (www.mybrb.com). The Company
continues to actively work to bring the Bank's fintech policies,
procedures, and operations into conformity with OCC
directives. The Company reports that, although work is
progressing, many aspects of the Agreement require considerable
time for completion, implementation, validation, and
sustainability.
- Remediation costs related to regulatory matters were
$1.1 million in the first quarter of
2023, compared to $2.9 million in the
prior quarter.
- Balance Sheet Growth:
-
- Total deposits grew $258.5
million, or 10.3%, to $2.76
billion, from the prior quarter-end, due to growth in time
deposits, partially offset by lower noninterest-bearing demand
deposit balances.
-
- The Company added approximately $293
million in brokered time deposits, most of which were
assumed following the industry events that occurred in early
March. Excluding these deposits, total deposits declined by
1.4% during the first quarter of 2023.
- Deposits related to fintech relationships increased by
$26 million, or 3.8%, to $716 million, from the prior quarter-end.
Deposits related to fintech relationships represented 25.9% of
total deposits at March 31, 2023,
compared to 27.6% of total deposits at December 31, 2022.
- Loans held-for-investment, excluding Paycheck Protection
Program ("PPP") loans, grew $49.9
million, or 2.1%, to $2.45
billion, from the prior quarter, due primarily to growth in
residential mortgage balances.
- The held-for-investment loan to deposit ratio measured 89.0% at
quarter-end, compared to 96.3% at the prior quarter-end.
- Net Interest Income / Net Interest Margin:
-
- Net interest income was $27.4
million, a decline of 19.4% from the prior quarter,
reflecting higher interest expense, partially offset by the benefit
of an increase in average interest-earning asset
balances.
-
- Purchase accounting adjustments ("PAA"), attributable primarily
to the Company's 2021 merger with Bay Banks of Virginia, Inc. ("Bay Banks"), added
$1.0 million to net interest income,
compared to $2.9 million for the
prior quarter.
- Net interest margin was 3.58%, compared to 4.83% for the prior
quarter. The decline was driven primarily by higher funding
costs, less benefit from PAA, and lower commercial loan
fees.
-
- PAA added 13 basis points to net interest margin, compared to
41 basis points for the prior quarter.
- Cost of deposits was 1.74%, compared to 0.85% for the prior
quarter. Cost of funds was 2.11%, compared to 1.22% for the
prior quarter. Deposit costs and overall funding costs
increased during the first quarter of 2023 due to higher interest
rates, the inflow of higher cost time deposits, mostly later in the
quarter and in response to industry events, and higher costs
related to fintech deposits.
- Yields on loans held for investment, excluding PPP loans, were
6.24%, compared to 6.74% for the prior quarter. The decline
in loan yields primarily reflected less benefit from PAA and lower
commercial loan fees in the first quarter of 2023, partially offset
by the beneficial impact of higher interest rates on variable rate
loans and recent loan production at higher rates.
- Asset Quality / Capital:
-
- The allowance for credit losses ("ACL") as a percentage of
total loans held-for-investment, excluding PPP loans, was
1.22%2, compared to 0.96%2 as of the prior
quarter-end. Approximately two-thirds of the increased ACL
reflects the implementation of the current expected credit losses
("CECL") allowance methodology as of January
1, 2023, with the remainder of the increase attributable to
specific reserves on collateral-dependent loans, quarterly loan
growth, and changes in certain economic forecasts that impacted
loss factors.
- Nonperforming loans, which include nonaccrual loans and loans
90 days or more past due and accruing interest, totaled
$30.7 million, representing 0.92% of
total assets, compared to $18.6
million, representing 0.59% of total assets, at the prior
quarter-end. The increase was primarily attributable to two
commercial loans.
- The Company recorded a provision for credit losses of
$3.7 million, compared to
$4.0 million for the prior
quarter. Net charge-offs were $1.1
million, compared to $1.6
million for the prior quarter.
- The ratio of tangible stockholders' equity to tangible total
assets was 6.8%1, compared to 7.3%1 at the
prior quarter-end. Tangible book value per common share was
$11.931, compared to
$12.001 at the prior
quarter-end. The after-tax unrealized loss in the Company's
available-for-sale investment portfolio was $41.2 million at March 31,
2023, compared to $45.1
million at December 31, 2022.
The effect of the after-tax unrealized loss on tangible book
value per common share was $2.18,
compared to $2.38 at the prior
quarter-end. The Company does not have any securities
classified as held-to-maturity.
- The adoption of CECL on January 1,
2023 resulted in an after-tax cumulative effect adjustment,
which reduced stockholders' equity by $5.5
million due to the increase in the ACL and the liability for
unfunded commitments, which is included in other liabilities in the
consolidated balance sheets.
- Noninterest Income / Noninterest Expense:
-
- Noninterest income was $7.3
million, compared to $5.8
million for the prior quarter. The increase primarily
reflects a higher gain on sale of government guaranteed loans, due
to greater sales activity in the first quarter of 2023, and
increased other income, partially offset by continued cyclical
pressure on mortgage-related income and negative fair value
adjustments to mortgage servicing rights. Mortgage loan
applications increased approximately 33% in the first quarter of
2023 relative to the fourth quarter of 2022.
- Noninterest expense was $28.8
million, compared to $27.6
million for the prior quarter. Higher salaries and
employee benefits costs reflected downward adjustments to the
Company's fourth quarter 2022 incentive accrual, leading to an
unfavorable comparison relative to the first quarter of 2023, and
higher headcount, excluding mortgage, primarily to support the
Bank's fintech business. Higher salaries and employee
benefits costs in the first quarter were also impacted by salary
adjustments in the beginning of the quarter. These higher
costs were partially offset by lower costs related to regulatory
remediation. Included in other noninterest expense was an
approximate $0.9 million charge
related to the previously sold PPP loan portfolio, which occurred
in the second quarter of 2021.
Income Statement
Net Interest Income
Net interest income was $27.4
million for the first quarter of 2023, compared to
$34.0 million for the fourth quarter
of 2022, and $23.7 million for the
first quarter of 2022. PAA attributable to the Company's 2021
merger with Bay Banks added $1.0
million to net interest income for the first quarter of
2023, compared to $2.9 million for
the fourth quarter of 2022, and $2.7
million for the first quarter of 2022. Net interest
income, adjusted for the impact of PAA, declined relative to the
prior quarter due primarily to a lower net interest margin,
partially offset by an increase in average interest-earning asset
balances.
Total interest income was $43.1
million for the first quarter of 2023, compared to
$42.3 million for the fourth quarter
of 2022, and $25.8 million for the
first quarter of 2022. The increase in interest income
primarily reflected higher interest-earning asset balances,
partially offset by lower beneficial impact from PAA. Total
interest expense was $15.7 million
for the first quarter of 2023, compared to $8.3 million for the fourth quarter of 2022, and
$2.1 million for the first quarter of
2022. Higher interest expense reflected an increase in
deposit costs and overall cost of funds, and a shift in the mix of
average interest-bearing liabilities, primarily to higher cost time
deposits from noninterest-bearing demand deposits.
Average balances of interest-earning assets increased
$247.6 million, or 8.8%, in the first
quarter of 2023, from the fourth quarter of 2022, primarily due to
higher average balances of loans held for investment, excluding PPP
loans, and, to a lesser extent, higher average balances of
interest-earning deposits in other banks. These balances
increased by $208.9 million and
$28.6 million, respectively, over the
same period. Relative to the first quarter of 2022, average
balances of interest-earning assets increased $616.4 million, or 25.2%, due primarily to higher
average balances of loans held for investment, excluding PPP loans,
which increased by $699.4 million,
over the same period.
Yields on average loans held for investment, excluding PPP
loans, were 6.24% for the first quarter of 2023, compared to 6.74%
for the fourth quarter of 2022, and 5.09% for the first quarter of
2022. The decline in loan yields relative to the prior
quarter primarily reflects a lesser contribution from PAA and lower
commercial loan fees. The increase in loan yields relative to
the prior year period primarily reflects the beneficial impact of
higher interest rates on loans re-pricing and new loan growth at
higher yields.
Average balances of interest-bearing liabilities increased
$392.3 million, or 22.1%, in the
first quarter of 2023, from the fourth quarter of 2022, primarily
due to higher average balances of interest-bearing demand deposits,
time deposits, and FHLB borrowings. These balances increased
by $187.6 million, $143.4 million, and $61.3
million, respectively, over the same period. Relative
to the first quarter of 2022, average balances of interest-bearing
liabilities increased $537.2 million,
or 32.9%, due to higher average balances of interest-bearing
deposits and FHLB borrowings.
Cost of funds was 2.11% for the first quarter of 2023, compared
to 1.22% for the fourth quarter of 2022, and 0.36% for the first
quarter of 2022, while cost of deposits was 1.74%, 0.85%, and
0.27%, for the same respective periods. Higher deposit and
overall funding costs reflects higher market interest rates, higher
interest costs related to FHLB borrowings (despite lower balances
during the first quarter of 2023 relative to the prior quarter),
and a shift in the mix of deposit funding, including an increase in
higher cost time deposits and a decline in noninterest-bearing
deposits.
Net interest margin was 3.58% for the first quarter of 2023,
compared to 4.83% for the fourth quarter of 2022, and 3.88% for the
first quarter of 2022. PAA added 13 basis points to net
interest margin for the first quarter of 2023, compared to 41 basis
points for the fourth quarter of 2022, and 53 basis points for the
first quarter of 2022. The decline in net interest margin relative
to the prior quarter was driven primarily by higher funding costs,
less benefit from PAA, and lower commercial loan fees.
Provision for Credit Losses
The Company recorded a provision for credit losses of
$3.7 million for the first quarter of
2023, compared to $4.0 million for
the fourth quarter of 2022, and $2.5
million for the first quarter of 2022. Provision for
loan losses across all periods was primarily attributable to
specific reserves on collateral-dependent loans, quarterly loan
growth, and changes in certain economic conditions or forecasts
that impacted loss factors.
Noninterest Income
Noninterest income was $7.3
million for the first quarter of 2023, compared to
$5.8 million for the fourth quarter
of 2022, and $24.1 million for the
first quarter of 2022. Relative to both prior periods,
noninterest income for the first quarter of 2023 reflects continued
cyclical pressure on mortgage-related income and negative fair
value adjustments to mortgage servicing rights, partially offset by
a higher gain on sale of government guaranteed loans. Results
relative to the prior quarter also reflected a significant increase
in other income, partially offset by lower bank and purchase card
income. Results for the year-ago period reflected
$9.4 million of fair value
adjustments for the Company's equity investments, primarily in
certain fintech companies; these fair value adjustments for equity
investments represented 39% of total noninterest income in the
first quarter of 2022.
Noninterest Expense
Noninterest expense was $28.8
million for the first quarter of 2023, compared to
$27.6 million for the fourth quarter
of 2022, and $22.7 million for the
first quarter of 2022. Relative to the prior quarter, higher
salaries and employee benefits costs reflected downward adjustments
to the Company's fourth quarter 2022 incentive accrual, leading to
an unfavorable comparison relative to the first quarter of 2023,
and higher headcount, excluding mortgage, primarily to support the
Bank's fintech business. Salaries and benefits costs in the
first quarter of 2023 were also impacted by first quarter salary
adjustments. These costs were partially offset by lower costs
related to regulatory remediation. Included in other
noninterest expense was an approximate $0.9
million charge related to the previously sold PPP loan
portfolio, which occurred in the second quarter of 2021.
Relative to the year-ago period, higher salaries and employee
benefits costs reflected higher headcount, excluding mortgage,
primarily to support the fintech business, higher costs related to
data processing, legal and regulatory filing, communications, FDIC
insurance, other contractual services, and regulatory remediation
costs.
Balance Sheet
Loans
Loans held-for-investment, excluding PPP loans, were
$2.45 billion at March 31, 2023, an increase of $49.9 million, or 2.1%, from the prior
quarter-end, and $605.6 million, or
32.9%, from the year-ago period-end. Loan growth relative to
the prior quarter-end was due primarily to growth in residential
first mortgage balances. Loan growth relative to the year-ago
period was supplemented by the Company's investment in its
government guaranteed and middle market lending teams.
Deposits
Deposits were $2.76 billion at
March 31, 2023, an increase of
$258.5 million, or 10.3%, from the
prior quarter-end, and $407.0
million, or 17.3%, from the year-ago period. Deposit
growth relative to both prior periods reflected growth in time
deposits, partially offset by lower noninterest-bearing demand
deposit balances. Noninterest-bearing deposits comprised
21.5% of total deposits as of March 31,
2023, compared to 25.6% as of December 31, 2022, and 32.6% as of March 31, 2022.
The total loan-to-deposit ratio was 91.8% at March 31, 2023, compared to 99.1% at the prior
quarter-end, and 81.0% at the year-ago period-end. The
held-for-investment loan-to-deposit ratio was 89.0%, compared to
96.3% at the prior quarter-end, and 79.3% at the year-ago
period-end.
Capital
The Company previously announced that on April 6, 2023, its board of directors declared a
$0.1225 per common share quarterly
dividend, which will be paid on April 28,
2023, to shareholders of record as of April 18, 2023.
Blue Ridge Bank's regulatory
capital ratios as of March 31, 2023,
were 11.12%, 10.06%, 10.06%, and 8.50% for total risk-based
capital, tier 1 risk-based capital, common equity tier 1 risk-based
capital, and tier 1 leverage, respectively, compared to 11.22%,
10.31%, 10.31%, and 9.25% as of December 31,
2022, and 13.29%, 12.69%, 12.69%, and 10.64% as of
March 31, 2022.
Fintech Business
Interest and fee income related to fintech partnerships
represented approximately $2.9
million, $3.1 million, and
$1.3 million of total revenue for the
Company for the first quarter of 2023, the fourth quarter of 2022,
and the first quarter of 2022, respectively. Included in
deposits related to fintech relationships were assets managed by
BRB Financial Group's trust division of $38.5 million as of March
31, 2023.
Other Matters
In the first quarter of 2022, the Company sold its majority
interest in MoneyWise Payroll Solutions, Inc. ("MoneyWise") to the
holder of the minority interest in MoneyWise. Asset and
liability balances and income statement amounts related to
MoneyWise are reported as discontinued operations for all periods
presented.
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 to supplement the evaluation of the
Company's performance. Management believes presentations of these
non-GAAP financial measures provide useful supplemental information
that is essential to a proper understanding of the operating
results of the Company's core businesses. These non-GAAP
disclosures should not be viewed as a substitute for operating
results 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: (i) the strength of the United States economy in general and the
strength of the local economies in which it conducts operations;
(ii) changes in the level of the Company's nonperforming assets and
charge-offs; (iii) management of risks inherent in the Company's
real estate loan portfolio, and the risk of a prolonged downturn in
the real estate market, which could impair the value of collateral
and the ability to sell collateral upon any foreclosure; (iv) the
effects of, and changes in, trade, monetary, and fiscal policies
and laws, including interest rate policies of the Federal Reserve,
inflation, interest rate, market, and monetary fluctuations; (v)
changes in consumer spending and savings habits; (vi) the Company's
ability to identify, attract, and retain experienced management,
relationship managers, and support personnel, particularly in a
competitive labor environment; (vii) technological and social media
changes impacting the Company, the Bank, and the financial services
industry in general; (viii) changing bank regulatory conditions,
laws, regulations, policies, or programs, whether arising as new
legislation or regulatory initiatives, that could lead to
restrictions on activities of banks generally, or the Bank in
particular, more restrictive regulatory capital requirements,
increased costs, including deposit insurance premiums, increased
regulations, prohibition of certain income producing activities, or
changes in the secondary market for loans and other products; (ix)
the impact of changes in financial services policies, laws and
regulations, including laws, regulations and policies concerning
taxes, banking, securities and insurance, and the application
thereof by regulatory bodies; (x) the Company's involvement, from
time to time, in legal proceedings and examination and remedial
actions by regulators; (xi) the impact of, and the ability to
comply with, the terms of the formal written agreement between the
Bank and the OCC; (xii) the impact of changes in laws, regulations,
and policies affecting the real estate industry; (xiii) the effect
of changes in accounting policies and practices, as may be adopted
from time to time by bank regulatory agencies, the SEC, the Public
Company Accounting Oversight Board, the Financial Accounting
Standards Board, or other accounting standards setting bodies;
(xiv) the impact of the COVID-19 pandemic, including the adverse
impact on our business and operations and on the Company's
customers which may result, among other things, in increased
delinquencies, defaults, foreclosures and losses on loans; (xv) the
occurrence of significant natural disasters, including severe
weather conditions, floods, health related issues, and other
catastrophic events; (xvi) geopolitical conditions, including acts
or threats of terrorism and/or military conflicts, or actions taken
by the U.S. or other governments in response to acts or threats of
terrorism and/or military conflicts, which could impact business
and economic conditions in the U.S. and abroad; (xvii) the timely
development of competitive new products and services and the
acceptance of these products and services by new and existing
customers; (xviii) the willingness of users to substitute
competitors' products and services for the Company's products and
services; (xix) the Company's inability to successfully manage
growth or implement its growth strategy; (xx) reputational risk and
potential adverse reactions of the Company's customers, suppliers,
employees or other business partners; (xxi) the effect of
acquisitions the Company may make, including, without limitation,
disruption of employee or customer relationships, and the failure
to achieve the expected revenue growth and/or expense savings from
such acquisitions; (xxii) the Company's participation in the PPP
established by the U.S. government and its administration of the
loans and processing fees earned under the program; (xxiii) the
Company's involvement, from time to time, in legal proceedings, and
examination and remedial actions by regulators; (xxiv) the
Company's potential exposure to fraud, negligence, computer theft,
and cyber-crime; (xxv) the Bank's ability to effectively manage its
fintech partnerships, and the abilities of those fintech companies
to perform as expected; (xxvi) the Bank's ability to pay dividends
to the Company; and (xxvii) other risks and factors identified in
the "Risk Factors" sections and elsewhere in documents the Company
files from time to time with the SEC.
1 Non-GAAP financial measure. Further information can
be found at the end of this press release.
2 The Company holds no ACL on PPP loans as they are
fully guaranteed by the U.S. government.
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
|
|
Consolidated
Statements of Income (unaudited)
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
(Dollars in
thousands, except per common share data)
|
|
March 31,
2023
|
|
December 31,
2022
|
|
March 31,
2022
|
Interest
income:
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
39,294
|
|
$
38,934
|
|
$
23,899
|
Interest on taxable
securities
|
|
2,628
|
|
2,508
|
|
1,770
|
Interest on nontaxable
securities
|
|
92
|
|
89
|
|
75
|
Interest on deposit
accounts and federal funds sold
|
|
1,039
|
|
754
|
|
58
|
Total interest
income
|
|
43,053
|
|
42,285
|
|
25,802
|
Interest
expense:
|
|
|
|
|
|
|
Interest on
deposits
|
|
11,331
|
|
5,131
|
|
1,556
|
Interest on
subordinated notes
|
|
553
|
|
547
|
|
553
|
Interest on FHLB and
FRB borrowings
|
|
3,810
|
|
2,651
|
|
25
|
Total interest
expense
|
|
15,694
|
|
8,329
|
|
2,134
|
Net interest
income
|
|
27,359
|
|
33,956
|
|
23,668
|
Provision for credit
losses - loans
|
|
4,100
|
|
3,992
|
|
2,500
|
Provision for credit
losses - unfunded commitments
|
|
(400)
|
|
—
|
|
—
|
Total provision for
credit losses
|
|
3,700
|
|
3,992
|
|
2,500
|
Net interest income
after provision for credit losses
|
|
23,659
|
|
29,964
|
|
21,168
|
Noninterest
income:
|
|
|
|
|
|
|
Fair value adjustments
of other equity investments
|
|
(51)
|
|
78
|
|
9,364
|
Residential mortgage
banking income, including MSRs
|
|
1,303
|
|
1,961
|
|
9,559
|
Gain on sale of
government guaranteed loans
|
|
2,409
|
|
204
|
|
1,427
|
Wealth and trust
management
|
|
432
|
|
451
|
|
391
|
Service charges on
deposit accounts
|
|
343
|
|
293
|
|
315
|
Increase in cash
surrender value of BOLI
|
|
282
|
|
402
|
|
272
|
Bank and purchase card,
net
|
|
340
|
|
866
|
|
422
|
Other
|
|
2,225
|
|
1,585
|
|
2,344
|
Total noninterest
income
|
|
7,283
|
|
5,840
|
|
24,094
|
Noninterest
expense:
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
15,289
|
|
11,863
|
|
14,096
|
Occupancy and
equipment
|
|
1,569
|
|
1,509
|
|
1,485
|
Data
processing
|
|
1,346
|
|
1,441
|
|
946
|
Legal
|
|
1,234
|
|
1,300
|
|
382
|
Advertising and
marketing
|
|
286
|
|
318
|
|
428
|
Communications
|
|
1,131
|
|
1,064
|
|
799
|
Audit and accounting
fees
|
|
146
|
|
476
|
|
141
|
FDIC
insurance
|
|
729
|
|
543
|
|
231
|
Intangible
amortization
|
|
355
|
|
365
|
|
397
|
Other contractual
services
|
|
939
|
|
1,334
|
|
534
|
Other taxes and
assessments
|
|
802
|
|
716
|
|
570
|
Regulatory
remediation
|
|
1,134
|
|
2,884
|
|
—
|
Merger-related
|
|
—
|
|
—
|
|
50
|
Other
|
|
3,887
|
|
3,739
|
|
2,630
|
Total noninterest
expense
|
|
28,847
|
|
27,552
|
|
22,689
|
Income from
continuing operations before income tax
|
|
2,095
|
|
8,252
|
|
22,573
|
Income tax
expense
|
|
491
|
|
1,948
|
|
5,153
|
Net income from
continuing operations
|
|
1,604
|
|
6,304
|
|
17,420
|
Discontinued
operations:
|
|
|
|
|
|
|
Income from
discontinued operations before income taxes
|
|
—
|
|
—
|
|
426
|
Income tax
expense
|
|
—
|
|
—
|
|
89
|
Net income from
discontinued operations
|
|
—
|
|
—
|
|
337
|
Net
income
|
|
$
1,604
|
|
$
6,304
|
|
$
17,757
|
Net income from
discontinued operations attributable to noncontrolling
interest
|
|
—
|
|
—
|
|
(1)
|
Net income
attributable to Blue Ridge Bankshares, Inc.
|
|
$
1,604
|
|
$
6,304
|
|
$
17,756
|
Net income available
to common stockholders
|
|
$
1,604
|
|
$
6,304
|
|
$
17,756
|
Diluted EPS from
continuing operations
|
|
$
0.09
|
|
$
0.33
|
|
$
0.93
|
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
Consolidated Balance
Sheets
|
|
|
|
|
(Dollars in
thousands, except share data)
|
|
(unaudited)
March 31, 2023
|
|
December
31,
2022
(1)
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
226,374
|
|
$
77,274
|
Federal funds
sold
|
|
1,976
|
|
1,426
|
Securities available
for sale, at fair value
|
|
351,990
|
|
354,341
|
Restricted equity
investments
|
|
18,388
|
|
21,257
|
Other equity
investments
|
|
22,960
|
|
23,776
|
Other
investments
|
|
26,538
|
|
24,672
|
Loans held for
sale
|
|
76,528
|
|
69,534
|
Paycheck Protection
Program loans, net of deferred fees and costs
|
|
7,988
|
|
11,967
|
Loans held for
investment, net of deferred fees and costs
|
|
2,448,992
|
|
2,399,092
|
Less: allowance for
credit losses
|
|
(29,974)
|
|
(22,939)
|
Loans held for
investment, net
|
|
2,419,018
|
|
2,376,153
|
Accrued interest
receivable
|
|
14,915
|
|
12,393
|
Other real estate
owned
|
|
—
|
|
195
|
Premises and equipment,
net
|
|
23,244
|
|
23,152
|
Right-of-use
asset
|
|
6,470
|
|
6,903
|
Bank owned life
insurance
|
|
47,536
|
|
47,245
|
Goodwill
|
|
26,826
|
|
26,826
|
Other intangible
assets
|
|
6,196
|
|
6,583
|
Mortgage servicing
rights, net
|
|
27,095
|
|
28,991
|
Deferred tax asset,
net
|
|
9,605
|
|
9,182
|
Other assets
|
|
21,264
|
|
19,175
|
Total assets
|
|
$
3,334,911
|
|
$
3,141,045
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
demand
|
|
$
594,518
|
|
$
640,101
|
Interest-bearing demand
and money market deposits
|
|
1,326,655
|
|
1,318,799
|
Savings
|
|
143,530
|
|
151,646
|
Time
deposits
|
|
696,344
|
|
391,961
|
Total
deposits
|
|
2,761,047
|
|
2,502,507
|
FHLB
borrowings
|
|
239,100
|
|
311,700
|
FRB
borrowings
|
|
—
|
|
51
|
Subordinated notes,
net
|
|
39,904
|
|
39,920
|
Lease
liability
|
|
7,398
|
|
7,860
|
Other
liabilities
|
|
29,876
|
|
19,634
|
Total
liabilities
|
|
3,077,325
|
|
2,881,672
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock, no par
value; 50,000,000 shares authorized at March 31, 2023
and December 31, 2022;
18,942,091 and 18,950,329 shares issued and
outstanding at March
31, 2023 and December 31, 2022, respectively
|
|
196,498
|
|
195,960
|
Additional paid-in
capital
|
|
252
|
|
252
|
Retained
earnings
|
|
102,071
|
|
108,262
|
Accumulated other
comprehensive loss, net of tax
|
|
(41,235)
|
|
(45,101)
|
Total stockholders'
equity
|
|
257,586
|
|
259,373
|
Total liabilities and
stockholders' equity
|
|
$
3,334,911
|
|
$
3,141,045
|
|
|
|
|
|
(1) Derived from
audited December 31, 2022 Consolidated Financial
Statements.
|
|
|
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
|
|
|
|
|
|
Quarter Summary of
Selected Financial Data (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the
Three Months Ended
|
(Dollars and
shares in thousands, except per common share
data)
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
Income Statement
Data:
|
|
2023
|
|
2022
|
|
2022
|
|
2022
|
|
2022
|
Interest
income
|
|
$
43,053
|
|
$
42,285
|
|
$
33,146
|
|
$
26,243
|
|
$
25,802
|
Interest
expense
|
|
15,694
|
|
8,329
|
|
4,469
|
|
2,153
|
|
2,134
|
Net interest
income
|
|
27,359
|
|
33,956
|
|
28,677
|
|
24,090
|
|
23,668
|
Provision for credit
losses
|
|
3,700
|
|
3,992
|
|
3,900
|
|
7,494
|
|
2,500
|
Net interest income
after provision for loan losses
|
|
23,659
|
|
29,964
|
|
24,777
|
|
16,596
|
|
21,168
|
Noninterest
income
|
|
7,283
|
|
5,840
|
|
7,968
|
|
10,190
|
|
24,094
|
Noninterest
expenses
|
|
28,847
|
|
27,552
|
|
29,208
|
|
25,326
|
|
22,689
|
Income before income
taxes
|
|
2,095
|
|
8,252
|
|
3,537
|
|
1,460
|
|
22,573
|
Income tax
expense
|
|
491
|
|
1,948
|
|
801
|
|
342
|
|
5,153
|
Net income from
continuing operations
|
|
1,604
|
|
6,304
|
|
2,736
|
|
1,118
|
|
17,420
|
Net income from
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
—
|
|
337
|
Net income
|
|
1,604
|
|
6,304
|
|
2,736
|
|
1,118
|
|
17,757
|
Net income from
discontinued operations attributable to noncontrolling
interest
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
Net income attributable
to Blue Ridge Bankshares, Inc.
|
|
$
1,604
|
|
$
6,304
|
|
$
2,736
|
|
$
1,118
|
|
$
17,756
|
Per Common Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Basic EPS from
continuing operations
|
|
$
0.09
|
|
$
0.33
|
|
$
0.15
|
|
$
0.06
|
|
$
0.93
|
Basic EPS from
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.02
|
Basic EPS attributable
to Blue Ridge Bankshares, Inc.
|
|
$
0.09
|
|
$
0.33
|
|
$
0.15
|
|
$
0.06
|
|
$
0.95
|
Diluted EPS from
continuing operations
|
|
$
0.09
|
|
$
0.33
|
|
$
0.15
|
|
$
0.06
|
|
$
0.93
|
Diluted EPS from
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.02
|
Diluted EPS
attributable to Blue Ridge Bankshares, Inc.
|
|
$
0.09
|
|
$
0.33
|
|
$
0.15
|
|
$
0.06
|
|
$
0.95
|
Dividends declared per
common share
|
|
$
0.1225
|
|
$
0.1225
|
|
$
0.1225
|
|
$
0.1225
|
|
$
0.1225
|
Book value per common
share
|
|
13.60
|
|
13.69
|
|
13.22
|
|
13.95
|
|
14.84
|
Tangible book value per
common share - Non-GAAP
|
|
11.93
|
|
12.00
|
|
11.51
|
|
12.21
|
|
13.09
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
$
3,334,911
|
|
$
3,141,045
|
|
$
2,881,451
|
|
$
2,799,643
|
|
$
2,724,584
|
Average
interest-earning assets
|
|
3,060,534
|
|
2,812,898
|
|
2,686,376
|
|
2,482,065
|
|
2,444,099
|
Loans held for
investment (including PPP loans)
|
|
2,456,980
|
|
2,411,059
|
|
2,171,490
|
|
2,064,037
|
|
1,866,197
|
Loans held for
investment (excluding PPP loans)
|
|
2,448,992
|
|
2,399,092
|
|
2,158,342
|
|
2,048,383
|
|
1,843,344
|
Allowance for credit
losses
|
|
29,974
|
|
22,939
|
|
20,534
|
|
17,242
|
|
12,013
|
Purchase accounting
adjustments (discounts) on acquired loans
|
|
6,724
|
|
7,872
|
|
10,373
|
|
12,192
|
|
13,514
|
Loans held for
sale
|
|
76,528
|
|
69,534
|
|
25,800
|
|
32,759
|
|
41,004
|
Securities available
for sale, at fair value
|
|
351,990
|
|
354,341
|
|
359,516
|
|
381,536
|
|
375,484
|
Noninterest-bearing
demand deposits
|
|
594,518
|
|
640,101
|
|
787,514
|
|
785,743
|
|
766,506
|
Total
deposits
|
|
2,761,047
|
|
2,502,507
|
|
2,409,486
|
|
2,335,707
|
|
2,354,081
|
Subordinated notes,
net
|
|
39,904
|
|
39,920
|
|
39,937
|
|
39,953
|
|
39,970
|
FHLB and FRB
advances
|
|
239,100
|
|
311,751
|
|
150,155
|
|
135,060
|
|
25,319
|
Average
interest-bearing liabilities
|
|
2,169,643
|
|
1,777,391
|
|
1,771,246
|
|
1,627,423
|
|
1,632,444
|
Total stockholders'
equity
|
|
257,586
|
|
259,373
|
|
250,502
|
|
261,660
|
|
278,482
|
Weighted average common
shares outstanding - basic
|
|
18,856
|
|
18,857
|
|
18,849
|
|
18,767
|
|
18,772
|
Weighted average common
shares outstanding - diluted
|
|
18,860
|
|
18,863
|
|
18,860
|
|
18,778
|
|
18,789
|
Financial
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.20 %
|
|
0.83 %
|
|
0.38 %
|
|
0.17 %
|
|
2.68 %
|
Operating return on
average assets (1) - Non-GAAP
|
|
0.31 %
|
|
1.14 %
|
|
0.81 %
|
|
0.23 %
|
|
2.68 %
|
Return on average
equity (1)
|
|
2.47 %
|
|
9.56 %
|
|
4.10 %
|
|
1.57 %
|
|
25.84 %
|
Operating return on
average equity (1) - Non-GAAP
|
|
3.85 %
|
|
13.01 %
|
|
8.86 %
|
|
2.14 %
|
|
25.92 %
|
Total loan to deposit
ratio
|
|
91.8 %
|
|
99.1 %
|
|
91.2 %
|
|
89.8 %
|
|
81.0 %
|
Held for investment
loan to deposit ratio
|
|
89.0 %
|
|
96.3 %
|
|
90.1 %
|
|
88.4 %
|
|
79.3 %
|
Net interest margin
(1)
|
|
3.58 %
|
|
4.83 %
|
|
4.27 %
|
|
3.89 %
|
|
3.88 %
|
Cost of deposits
(1)
|
|
1.74 %
|
|
0.85 %
|
|
0.50 %
|
|
0.26 %
|
|
0.27 %
|
Cost of funds
(1)
|
|
2.11 %
|
|
1.22 %
|
|
0.69 %
|
|
0.36 %
|
|
0.36 %
|
Efficiency
ratio
|
|
83.3 %
|
|
69.2 %
|
|
79.7 %
|
|
73.9 %
|
|
47.5 %
|
Operating efficiency
ratio - Non-GAAP
|
|
80.0 %
|
|
62.0 %
|
|
68.7 %
|
|
72.4 %
|
|
47.4 %
|
Regulatory remediation
expenses
|
|
1,134
|
|
2,884
|
|
4,025
|
|
510
|
|
23
|
Merger-related expenses
(MRE)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
Capital and Asset
Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity to average assets
|
|
7.9 %
|
|
8.7 %
|
|
9.2 %
|
|
10.8 %
|
|
10.4 %
|
Allowance for credit
losses to loans held for investment, excluding PPP
loans
|
|
1.22 %
|
|
0.96 %
|
|
0.95 %
|
|
0.84 %
|
|
0.65 %
|
Nonperforming loans to
total assets
|
|
0.92 %
|
|
0.59 %
|
|
0.35 %
|
|
0.44 %
|
|
0.53 %
|
Nonperforming assets to
total assets
|
|
0.92 %
|
|
0.60 %
|
|
0.36 %
|
|
0.44 %
|
|
0.53 %
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common
Equity:
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
$
257,586
|
|
$
259,373
|
|
$
250,502
|
|
$
261,660
|
|
$
278,482
|
Less: Goodwill and
other intangibles, net of deferred tax liability (2)
|
|
(31,637)
|
|
(32,027)
|
|
(32,369)
|
|
(32,632)
|
|
(32,716)
|
Tangible common equity
(Non-GAAP)
|
|
$
225,949
|
|
$
227,346
|
|
$
218,133
|
|
$
229,028
|
|
$
245,766
|
Total shares
outstanding
|
|
18,942
|
|
18,950
|
|
18,946
|
|
18,762
|
|
18,771
|
Book value per common
share
|
|
$
13.60
|
|
$
13.69
|
|
$
13.22
|
|
$
13.95
|
|
$
14.84
|
Tangible book value per
common share (Non-GAAP)
|
|
11.93
|
|
12.00
|
|
11.51
|
|
12.21
|
|
13.09
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
stockholders' equity to tangible total assets
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
3,334,911
|
|
$
3,141,045
|
|
$
2,881,451
|
|
$
2,799,643
|
|
$
2,724,584
|
Less: Goodwill and
other intangibles, net of deferred tax liability (2)
|
|
(31,637)
|
|
(32,027)
|
|
(32,369)
|
|
(32,632)
|
|
(32,716)
|
Tangible total assets
(Non-GAAP)
|
|
$
3,303,274
|
|
$
3,109,018
|
|
$
2,849,082
|
|
$
2,767,011
|
|
$
2,691,868
|
Tangible common equity
(Non-GAAP)
|
|
$
225,949
|
|
$
227,346
|
|
$
218,133
|
|
$
229,028
|
|
$
245,766
|
Tangible stockholders'
equity to tangible total assets (Non-GAAP)
|
|
6.8 %
|
|
7.3 %
|
|
7.7 %
|
|
8.3 %
|
|
9.1 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating return on
average assets (annualized)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
1,604
|
|
$
6,304
|
|
$
2,736
|
|
$
1,118
|
|
$
17,755
|
Add: MRE, after-tax
basis (ATB) (3)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
40
|
Add: Regulatory
remediation expenses, ATB (3)
|
|
896
|
|
2,278
|
|
3,180
|
|
403
|
|
18
|
Operating net income
(Non-GAAP)
|
|
$
2,500
|
|
$
8,582
|
|
$
5,916
|
|
$
1,521
|
|
$
17,813
|
Average
assets
|
|
$
3,270,110
|
|
$
3,020,371
|
|
$
2,903,447
|
|
$
2,646,874
|
|
$
2,653,987
|
Operating return on
average assets (annualized) (Non-GAAP)
|
|
0.31 %
|
|
1.14 %
|
|
0.81 %
|
|
0.23 %
|
|
2.68 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating return on
average equity (annualized)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
1,604
|
|
$
6,304
|
|
$
2,736
|
|
$
1,118
|
|
$
17,755
|
Add: MRE, ATB
(3)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
40
|
Add: Regulatory
remediation expenses, ATB (3)
|
|
896
|
|
2,278
|
|
3,180
|
|
403
|
|
18
|
Operating net income
(Non-GAAP)
|
|
$
2,500
|
|
$
8,582
|
|
$
5,916
|
|
$
1,521
|
|
$
17,813
|
Average stockholders'
equity
|
|
$
259,911
|
|
$
263,826
|
|
$
267,057
|
|
$
284,913
|
|
$
274,887
|
Operating return on
average equity (annualized) (Non-GAAP)
|
|
3.85 %
|
|
13.01 %
|
|
8.86 %
|
|
2.14 %
|
|
25.92 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating efficiency
ratio
|
|
|
|
|
|
|
|
|
|
|
Total noninterest
expense
|
|
$
28,847
|
|
$
27,552
|
|
$
29,208
|
|
$
25,326
|
|
$
22,691
|
Less: MRE
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
Less: Regulatory
remediation expenses
|
|
1,134
|
|
2,884
|
|
4,025
|
|
510
|
|
23
|
Noninterest expense,
adjusted (Non-GAAP)
|
|
$
27,713
|
|
$
24,668
|
|
$
25,183
|
|
$
24,816
|
|
$
22,618
|
Net interest
income
|
|
27,359
|
|
33,956
|
|
28,677
|
|
24,090
|
|
23,668
|
Noninterest
income
|
|
7,283
|
|
5,840
|
|
7,968
|
|
10,190
|
|
24,094
|
Total of net interest
income and noninterest income
|
|
$
34,642
|
|
$
39,796
|
|
$
36,645
|
|
$
34,280
|
|
$
47,762
|
Operating efficiency
ratio (Non-GAAP)
|
|
80.0 %
|
|
62.0 %
|
|
68.7 %
|
|
72.4 %
|
|
47.4 %
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Annualized.
|
|
|
|
|
|
|
|
|
|
|
(2) Excludes mortgage
servicing rights.
|
|
|
|
|
|
|
|
|
|
|
(3) Assumes an income
tax rate of 21% and full deductibility.
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Blue Ridge Bankshares, Inc.