During fourth quarter, announced commitments
for $150 million pursuant to a
private placement capital raise to help fund business line
transformation, support the bank's capital position, and support
future growth
CHARLOTTESVILLE, Va., Jan. 31,
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 and year ended December 31, 2023.
For the fourth quarter of 2023, the Company reported a net loss
of $5.8 million, or $0.30 per diluted common share, compared to a net
loss of $41.4 million, or
$2.18 per diluted common share, for
the third quarter of 2023, and a net loss of $4.3 million, or $0.23 per diluted common share, for the fourth
quarter of 2022.
For the year ended December 31,
2023, the Company reported a net loss from continuing
operations of $51.8 million, or
$2.73 per diluted common share,
compared to net income from continuing operations of $17.0 million, or $0.90 per diluted common share, for the year
ended December 31, 2022.
The fourth quarter of 2023 net loss of $5.8 million included a $1.2 million after-tax loss on the sale of an
equity investment in a fintech company and a $1.7 million after-tax loss on the fair value of
mortgage servicing rights, while the third quarter of 2023 net loss
of $41.4 million included an
after-tax goodwill impairment charge of $26.8 million and a $4.8
million after-tax settlement reserve for the Employee Stock
Ownership Plan ("ESOP") litigation assumed in the 2019 acquisition
of Virginia Community Bankshares, Inc. Excluding these items and
regulatory remediation costs, the net loss for the fourth and third
quarters of 2023 was $0.4 million and
$6.9 million, respectively.
A Message From Blue Ridge Bankshares, Inc. President and CEO,
G. William "Billy" Beale:
"During 2023, we initiated a period of aggressive and essential
transformation to restore Blue Ridge Bank to its fundamental
strengths and position it for the future. These efforts, which
continue into 2024, involve parallel initiatives across the entire
organization to rationalize our businesses, tighten our lending
focus, bolster our leadership talent, and assertively address our
regulatory remediation efforts.
"To these ends, we made additional progress in the fourth
quarter. Most notably, we announced capital commitments totaling
$150 million pursuant to a private
placement of our common stock. We intend to use this capital for a
variety of purposes, from repositioning our business lines around
our core strengths, to helping facilitate organic growth and
supporting our capital position. We also continued our efforts to
reinforce our risk management function through key hires:
Harry Golliday, who joins us as
Deputy Chief Credit Officer, and Rebecca
Robertson, who serves as Bank Secrecy Act (BSA) Officer.
Their talents and deep expertise will greatly enhance our
compliance rigor and the integrity that these functions are meant
to provide.
"While we have made many important steps forward, there is much
more progress to be made. I have great confidence in the potential
of Blue Ridge Bank and we are leaving no stone unturned in our
efforts to return the bank to profitability and growth. Completing
the private placement capital raise and diligently working to
satisfy the most recent demands of our regulators will be important
milestones on our journey over the next year. The goal of these
collective efforts is a reinvigorated Blue Ridge Bank that is
stronger and more resilient, has improved clarity of purpose, more
focused business lines, and is well governed."
OCC Consent Order and Private Placement Stock
Offering
On January 25, 2024, the Company
announced that Blue Ridge Bank had consented to the issuance of a
consent order (the "Order") by the Office of the Comptroller of the
Currency (the "OCC"), the Bank's primary banking
regulator. The Order replaces the formal written agreement
entered into by the Bank and the OCC on August 29, 2022 (the "Written Agreement"). The
Order generally incorporates the provisions of the Written
Agreement, as well as adding new provisions. The Order requires the
Bank to submit to the OCC a strategic plan and a capital plan, and
places further restrictions on the Bank's fintech operations. The
Order also requires the Bank to maintain a leverage ratio of 10.00%
and a total capital ratio of 13.00%. These individual minimum
capital ratios ("IMCRs") set forth in the Order are consistent with
the IMCR directives previously disclosed by the Company. A complete
copy of the Order was included in a Current Report on a Form 8-K
filed by the Company with the Securities and Exchange Commission
("SEC") on January 25, 2024 and can
be accessed on the SEC's website (www.sec.gov) and the Company's
website (www.mybrb.com).
On December 22, 2023, the Company
announced the signing of a definitive Securities Purchase Agreement
(the "Securities Purchase Agreement") with Kenneth R. Lehman, Castle Creek Capital Partners
VIII, L.P., other institutional investors, and certain directors
and executive officers of the Company (collectively, the
"Purchasers") pursuant to which the Company has agreed to issue and
sell to the Purchasers (i) 60 million shares of the Company's
common stock at a purchase price of $2.50 per share and, (ii) for the Purchasers
other than directors and executive officers, warrants to purchase
approximately 29.4 million shares of common stock at an exercise
price of $2.50 per share in a private
placement (the "Private Placement"), for gross proceeds of
$150,000,000. The Private Placement
is subject to the satisfaction or waiver of certain closing
conditions set forth in the Securities Purchase Agreement,
including approval of the Company's shareholders, and is expected
to close in March 2024.
Q4 2023 Highlights
(Comparisons for Fourth Quarter
2023 are relative to Third Quarter 2023 unless otherwise
noted.)
Net Income:
- The net loss in the quarter was $5.8
million, or $0.30 per diluted
common share, compared to a net loss of $41.4 million, or $2.18 per diluted common share, for the prior
quarter. The quarter pre-tax loss of $7.5
million included a $1.6
million loss on the sale of an equity investment in a
fintech company, a $2.2 million loss
due to a decline in fair value of mortgage serving rights, and
$3.2 million of regulatory
remediation expenses. Excluding these items, pre-tax loss for the
quarter would be approximately $0.5
million. The prior quarter pre-tax loss of $46.1 million included a goodwill impairment
charge of $26.8 million, $6.0 million for the ESOP litigation settlement
reserve, and $3.8 million of
regulatory remediation expenses. Excluding these items, the pre-tax
loss for the prior quarter would be approximately $9.5 million.
Asset Quality:
- Nonperforming loans totaled $62.6
million, or 2.01% of total assets at quarter-end compared to
$81.8 million, or 2.51% of total
assets, at the prior quarter-end. Elevated nonperforming loans
reflect, as previously disclosed, a group of specialty finance
loans on nonaccrual status. These specific loans have carrying
values totaling $34.2 million, for
which the Company holds reserves of $9.6
million as of December 31,
2023. Of the $48.2 million of
these loans reported as of September 30,
2023, $12.5 million were fully
charged-off in the fourth quarter. Subsequent to December 31, 2023, the Company received cash
payments totaling $1.5 million
pursuant to a forbearance agreement under which the largest of the
specialty finance loans is subject. These cash payments were
applied to the book principal balance of the loan.
- The provision for credit losses was $2.8
million, compared to $11.1
million for the prior quarter. Net loan charge-offs were
$17.3 million in the quarter,
representing an annualized net charge-off rate of 2.84% of average
loans held for investment, compared to $0.5
million, representing an annualized net charge-off rate of
0.09% of average loans held for investment, for the prior quarter.
The increase in net charge-offs and the annualized net charge-off
rate was primarily attributable to the charge-off of specialty
finance loans noted above, which were fully reserved for in the
prior quarter.
- The allowance for credit losses ("ACL") as a percentage of
total loans held for investment was 1.48% at quarter-end, compared
to 2.03% at the prior quarter-end. Specific reserves associated
with the aforementioned specialty finance loans totaled
$9.6 million and $21.8 million at December
31, 2023 and September 30,
2023, respectively.
Capital:
- The ratio of tangible stockholders' equity to tangible total
assets was 5.8%1, compared to 5.5%1 at the
prior quarter-end. Tangible book value per common share was
$9.471, compared to
$9.301 at the prior
quarter-end. The increase was primarily due to a decline in the
after-tax unrealized loss on the Company's portfolio of securities
available for sale.
- For the quarter ended December 31,
2023, the Bank's tier 1 leverage ratio, tier 1 risk-based
capital ratio, common equity tier 1 capital ratio, and total
risk-based capital ratio were 7.49%, 9.09%, 9.09%, and 10.25%,
respectively, compared to 7.63%, 9.18%, 9.18%, and 10.44%,
respectively, at the prior quarter-end.
Net Interest Income / Net Interest Margin:
- Net interest income was $21.8
million, a decline of $0.4
million from the prior quarter. Increasing loan yields in
the quarter, which increased 14 basis points, were offset by higher
funding costs, which increased by 18 basis points, primarily due to
rates paid on wholesale time deposits obtained in the quarter. Net
interest margin was 2.92% for both the current and prior
quarters.
Balance Sheet:
- Total deposit balances decreased $210.1
million from the prior quarter-end, due primarily to a
decline in fintech-related balances, partially offset by
$129.5 million of brokered deposits
obtained in the quarter.
- Deposits related to fintech relationships were $465.9 million at December
31, 2023, compared to $720.8
million at the prior quarter-end. Of the decline,
approximately one-half were indirect depository partner
(banking-as-a-service) deposits, while the other half was due to
the timing of funds flow with one of the Bank's indirect lending
partners. Fintech-related deposits represented 18.2% of total
deposits at December 31, 2023,
compared to 26.0% of total deposits at the prior quarter-end.
Excluding wholesale funding, deposits related to fintech
relationships represented 22.7% and 30.5% of total deposits at
December 31, 2023 and September 30, 2023, respectively. The Company is
actively reducing its banking-as-a-service fintech activities.
- Loans held for investment were $2.43
billion, a slight decline from the prior quarter-end. The
held for investment loan-to-deposit ratio measured 94.7% at
quarter-end compared to 88.1% at the prior quarter-end.
Noninterest Income / Noninterest Expense:
- Noninterest income was $4.1
million compared to $7.4
million for the prior quarter, a decline of $3.3 million. Lower noninterest income in the
quarter was primarily due to fair value adjustments on mortgage
servicing rights, which were a negative $2.0
million in the quarter compared to a positive adjustment of
$0.9 million in the prior quarter,
the decline due to lower expected future interest rates.
Additionally, the Company realized a $1.6
million loss on the sale of an equity investment in a
fintech company, recorded in fair value adjustments of other equity
investments on the consolidated statement of operations. The
Company recorded an unrealized gain of $5.8
million on the investment in a prior year. Partially
offsetting these declines was a higher gain on the sale of
government guaranteed loans in the current quarter.
- Noninterest expense was $30.6
million compared to $64.6
million for the prior quarter, a decrease of $34.0 million. Excluding the third quarter
$26.8 million goodwill impairment
charge and $6.0 million reserve for
the proposed settlement of the ESOP litigation, noninterest expense
declined $1.2 million from the prior
quarter. The decline was primarily attributable to lower regulatory
remediation expenses, legal fees, and salaries and employee
benefits, partially offset by higher audit and accounting fees,
other contractual services, and FDIC insurance assessments.
Income Statement:
Net Interest Income
Net interest income was $21.8
million for the fourth quarter of 2023, compared to
$22.2 million for the third quarter
of 2023, and $28.1 million for the
fourth quarter of 2022. Relative to both the prior quarter and
year-ago period, net interest income declined due to the impact of
higher interest rates on deposits and overall funding costs, and
actions taken to add balance sheet liquidity following the early
2023 market events and as the Bank rationalizes its
banking-as-a-service partners. Relative to the year-ago period,
these developments were partially offset by an increase in average
interest-earning asset balances at higher loan yields.
Total interest income was $43.2
million for the fourth quarter of 2023, $42.5 million for the third quarter of 2023, and
$36.5 million for the fourth quarter
of 2022. The increase relative to the prior year reflects higher
average balances of and yields on interest-earning asset balances,
partially offset by lower income from purchase accounting
adjustments. The yield on average loans held for investment,
excluding Paycheck Protection Program ("PPP") loans, was 6.33% for
the fourth quarter of 2023, compared to 6.19% for the third quarter
of 2023, and 5.72% for the fourth quarter of 2022.
Total interest expense was $21.4
million for the fourth quarter of 2023, compared to
$20.3 million for the third quarter
of 2023, and $8.3 million for the
fourth quarter of 2022. The increase relative to the prior quarter
and the year-ago period reflects higher deposit costs and overall
funding costs due to higher market interest rates and greater
balances of and a shift in the mix of average interest-bearing
liabilities, primarily to higher-cost wholesale funding.
Average balances of interest-earning assets decreased
$59.7 million to $2.98 billion in the fourth quarter of 2023,
relative to the prior quarter, and increased $166.2 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 total securities.
Relative to the year-ago period, the increase in average
interest-earning asset balances was due primarily to higher
balances of loans held for investment and interest-earning deposits
at other banks, partially offset by lower average balances of
securities.
Average balances of interest-bearing liabilities increased
$8.4 million to $2.36 billion in the fourth quarter of 2023,
relative to the prior quarter, and increased $585.4 million from the year-ago period. Relative
to the prior quarter, the increase reflected higher average
balances of time deposits, primarily attributable to wholesale
funding, partially offset by lower average balances of
interest-bearing demand and money market deposits and FHLB
borrowings. Relative to the prior year, the increase primarily
reflected higher average balances of interest-bearing deposits.
Cost of funds was 2.91% for the fourth quarter of 2023, compared
to 2.73% for the third quarter of 2023, and 1.22% for the fourth
quarter of 2022, while cost of deposits was 2.73%, 2.46%, and
0.85%, for the same respective periods. Higher deposit costs and
overall funding costs reflect the impact of higher market interest
rates and a shift in the mix of funding. Cost of deposits excluding
wholesale deposits was 2.26% for the quarter compared to 2.13% in
the prior quarter and 0.82% in the year-ago period.
Net interest margin was 2.92% for the fourth and third quarters
of 2023 compared to 4.00% for the fourth quarter of 2022. The
decline in net interest margin relative to the prior year reflects
the impact of higher interest rates on funding costs and less
benefit from purchase accounting adjustments. These declines were
partially offset by higher yields on loans.
Provision for Credit Losses
The Company recorded a provision for credit losses of
$2.8 million for the fourth quarter
of 2023, compared to $11.1 million
for the third quarter of 2023, and $11.8
million for the fourth quarter of 2022. Provision for the
fourth quarter of 2023 was primarily resulting from charge-offs and
reserve needs for a select group of purchased consumer loans,
partially offset by a recovery of the allowance for credit losses
on unfunded commitments due to lower available balances of
commercial and construction lines of credit. Provision in the third
quarter of 2023 and the fourth quarter of 2022 was primarily
attributable to specific reserves on the aforementioned group of
specialty finance loans.
Noninterest Income
Noninterest income was $4.1
million for the fourth quarter of 2023, compared to
$7.4 million for the third quarter of
2023, and $5.8 million for the fourth
quarter of 2022. The decline in the fourth quarter period was
primarily due to negative fair value adjustments on mortgage
servicing rights, recorded within residential mortgage banking
income, and the $1.6 million loss on
the sale of an equity investment in a fintech company, recorded in
fair value adjustments of other equity investments. The declines
were partially offset by a higher gain on sale of government
guaranteed loans. The Company recorded a $5.8 million unrealized gain on the sold fintech
investment in a prior year.
Noninterest Expense
Noninterest expense was $30.6
million for the fourth quarter of 2023, compared to
$64.6 million for the third quarter
of 2023, and $27.6 million for the
fourth quarter of 2022. Excluding the $26.8
million goodwill impairment charge, the $6.0 million reserve for the proposed settlement
of the ESOP litigation, and regulatory remediation costs,
noninterest expense declined $0.6
million from the prior quarter and increased $2.8 million from the year-ago period, on a
comparative basis. The increase relative to the year-ago period
primarily reflects higher salaries and employee benefits, FDIC
insurance assessments, audit and accounting fees, and other
contractual services, partially offset by lower legal expenses. In
the fourth quarter of 2023, the Company recorded a recovery of
previously expensed legal costs in connection with the ESOP
litigation.
Balance Sheet:
Loans
Loans held for investment, excluding PPP loans, were
$2.43 billion at December 31, 2023, compared to $2.44 billion at September
30, 2023, and $2.40 billion at
December 31, 2022. While loan
balances were relatively flat with the prior quarter level, the
Company selectively replaced the amortization of balances with
higher yielding loans. Additionally, the Company reduced unfunded
loan commitments to $474.9 million as
of December 31, 2023 from
$574.3 million as of September 30, 2023 and $744.8 million as of December 31, 2022.
Deposits
Total deposits were $2.57 billion
at December 31, 2023, a decrease of
$210.1 million from the prior
quarter-end, and an increase of $63.5
million from the year-ago period. Relative to the prior
quarter, the decrease reflected a decrease in interest-bearing
demand and money market deposits, primarily attributable to fintech
relationships, and, to a lesser extent, decreases in noninterest
bearing deposits, partially offset by higher time deposits,
primarily wholesale deposits. Fintech-related deposits declined
$254.9 million in the fourth quarter,
partially due to fewer banking-as-a-service partners and partially
due to the timing of funds flows related to one of the Bank's
indirect lending partners. Excluding fintech-related deposits and
wholesale funding, total deposits during the quarter decreased
$61.2 million, or 3.7%, from the
prior quarter-end.
Noninterest-bearing deposits represented 19.7%, 20.6%, and 25.6%
of total deposits at December 31,
2023, September 30, 2023, and
December 31, 2022, respectively.
Fintech-related balances represented 18.2%, 26.0%, and 27.6% of
total deposits as of the same respective periods.
The held for investment loan-to-deposit ratio was 94.7% at
December 31, 2023, compared to 88.1%
at the prior quarter-end, and 96.3% at the year-ago period-end.
Fintech Business:
Interest and fee income related to fintech partnerships
represented approximately $3.7
million, $3.6 million, and
$3.1 million of total revenue for the
Company for the fourth quarter of 2023, the third quarter of 2023,
and the fourth quarter of 2022, respectively.
Deposits related to fintech relationships were $465.9 million at December
31, 2023, compared to $720.8
million at the prior quarter-end. Included in deposits
related to fintech relationships were assets managed by BRB
Financial Group's trust division of $71.8
million as of December 31,
2023.
Other Matters:
On May 15, 2023, the Company sold
its wholesale mortgage business operating as LenderSelect Mortgage
Group ("LSMG") to a third-party for $250
thousand in cash. The Company recorded a loss on the sale of
LSMG of $553 thousand, which is
reported in other noninterest income in the consolidated statements
of operations for the year ended December 31, 2023.
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. 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, including tangible assets, tangible
common equity, and tangible book value per share, to supplement the
evaluation of the Company's financial condition and performance.
Management believes presentations of these non-GAAP financial
measures provide useful supplemental information that is essential
to a proper understanding of the financial condition, capital
position, and operating results of the Company's core businesses.
These non-GAAP disclosures should not be viewed as a substitute for
financial measures determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies. Reconciliations of GAAP to non-GAAP
measures are included at the end of this release.
Forward-Looking Statements:
This release of the Company contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements represent plans,
estimates, objectives, goals, guidelines, expectations, intentions,
projections, and statements of the Company's beliefs concerning
future events, business plans, objectives, expected operating
results and the assumptions upon which those statements are based.
Forward-looking statements include, without limitation, any
statement that may predict, forecast, indicate, or imply future
results, performance or achievements, and are typically identified
with words such as "may," "could," "should," "will," "would,"
"believe," "anticipate," "estimate," "expect," "aim," "intend,"
"plan," or words or phases of similar meaning. The Company cautions
that the forward-looking statements are based largely on its
expectations and are subject to a number of known and unknown risks
and uncertainties that are subject to change based on factors which
are, in many instances, beyond the Company's control. Actual
results, performance or achievements could differ materially from
those contemplated, expressed or implied by the forward-looking
statements.
The following factors, among others, could cause the Company's
financial performance to differ materially from that expressed in
such forward-looking statements:
- the strength of the United
States economy in general and the strength of the local
economies in which the Company conducts operations;
- the effects of, and changes in, the macroeconomic environment
and financial market conditions, including monetary and fiscal
policies, interest rates and inflation;
- the Company's ability to satisfy the conditions to closing of,
and consummate, the Private Placement;
- the impact of, and the ability to comply with, the terms of the
Order with the OCC, including the heightened capital requirements
and other restrictions therein, and other regulatory
directives;
- the imposition of additional regulatory actions or restrictions
for noncompliance with the Order or otherwise;
- the Company's involvement in, and the outcome of, any
litigation, legal proceedings or enforcement actions that may be
instituted against the Company;
- reputational risk and potential adverse reactions of the
Company's customers, suppliers, employees, or other business
partners;
- the Company's ability to manage its fintech relationships,
including implementing enhanced controls and procedures, complying
with OCC directives and applicable laws and regulations,
maintaining deposit levels and the quality of loans associated with
these relationships and, in certain cases, winding down certain of
these partnerships;
- the quality and composition of the Company's loan and
investment portfolios, including changes in the level of the
Company's nonperforming assets and charge-offs;
- the Company's management of risks inherent in its loan
portfolio, the credit quality of its borrowers, and the risk of a
prolonged downturn in the real estate market, which could impair
the value of the Company's collateral and its ability to sell
collateral upon any foreclosure;
- the ability to maintain adequate liquidity by retaining
deposits and secondary funding sources, especially if the Company's
or industry's reputation become damaged;
- maintaining capital levels adequate to support the Company's
business and to comply with OCC directives;
- the timely development of competitive new products and services
and the acceptance of these products and services by new and
existing customers;
- changes in consumer spending and savings habits;
- the willingness of users to substitute competitors' products
and services for the Company's products and services;
- deposit flows;
- technological and social media changes;
- potential exposure to fraud, negligence, computer
theft, and cyber-crime;
- the effects of acquisitions the Company may make, including,
without limitation, the failure to achieve the expected revenue
growth and/or expense savings from such transactions;
- adverse developments in the financial industry generally, such
as recent bank failures, responsive measures to mitigate and manage
such developments, related supervisory and regulatory actions and
costs, and related impacts on customer and client behavior;
- changing bank regulatory conditions, policies or programs,
whether arising as new legislation or regulatory initiatives, that
could lead to restrictions on activities of banks generally, or
Blue Ridge Bank in particular, more restrictive regulatory capital
requirements, increased costs, including deposit insurance
premiums, regulation or prohibition of certain income producing
activities or changes in the secondary market for loans and other
products;
- the impact of changes in financial services policies, laws, and
regulations, including laws, regulations and policies concerning
taxes, banking, securities, real estate and insurance, and the
application thereof by regulatory bodies;
- the effect of changes in accounting standards, policies and
practices as may be adopted from time to time;
- estimates of the fair value and other accounting values,
subject to impairment assessments, of certain of the Company's
assets and liabilities;
- geopolitical conditions, including acts or threats of terrorism
and/or military conflicts, or actions taken by the United States or other governments in
response to acts or threats of terrorism and/or military conflicts,
which could impact business and economic conditions in the United States and abroad;
- the occurrence or continuation of widespread health emergencies
or pandemics, significant natural disasters, severe weather
conditions, floods and other catastrophic events; and
- other risks and factors identified in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors" sections and elsewhere in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2022, as amended, the
Company's Quarterly Report on Form 10-Q for the most recently ended
fiscal quarter and in filings the Company makes from time to time
with the SEC.
The foregoing factors should not be considered exhaustive and
should be read together with other cautionary statements that are
included in filings the Company makes from time to time with the
SEC. Any one of these risks or factors could have a material
adverse impact on the Company's results of operations or financial
condition, or cause the Company's actual results, performance or
achievements to differ materially from those expressed in, or
implied by, forward-looking information and statements contained in
this release. Moreover, new risks and uncertainties emerge from
time to time, and it is not possible for the Company to predict all
risks and uncertainties that could have an impact on its
forward-looking statements. Therefore, the Company cautions not to
place undue reliance on its forward-looking information and
statements, which speak only as of the date of this release. The
Company does not undertake to, and will not, update or revise these
forward-looking statements after the date hereof, whether as a
result of new information, future events, or otherwise.
1 Non-GAAP financial measure. Further information can
be found at the end of this press release.
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
Consolidated Balance
Sheets
|
|
|
|
|
(Dollars in
thousands, except share data)
|
|
(Unaudited)
December 31, 2023
|
|
(As
restated) December
31, 2022 (1)
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
110,491
|
|
$
77,274
|
Federal funds
sold
|
|
4,451
|
|
1,426
|
Restricted
cash
|
|
10,660
|
|
—
|
Securities available
for sale, at fair value
|
|
321,081
|
|
354,341
|
Restricted equity
investments
|
|
18,621
|
|
21,257
|
Other equity
investments
|
|
12,905
|
|
23,776
|
Other
investments
|
|
29,467
|
|
24,672
|
Loans held for
sale
|
|
46,337
|
|
69,534
|
Paycheck Protection
Program loans
|
|
2,386
|
|
11,967
|
Loans held for
investment, net of deferred fees and costs
|
|
2,428,561
|
|
2,399,092
|
Less: allowance for
credit losses
|
|
(35,893)
|
|
(30,740)
|
Loans held for
investment, net
|
|
2,392,668
|
|
2,368,352
|
Accrued interest
receivable
|
|
14,967
|
|
11,569
|
Other real estate
owned
|
|
—
|
|
195
|
Premises and equipment,
net
|
|
22,348
|
|
23,152
|
Right-of-use
asset
|
|
8,738
|
|
6,903
|
Bank owned life
insurance
|
|
48,453
|
|
47,245
|
Goodwill
|
|
—
|
|
26,826
|
Other intangible
assets
|
|
5,382
|
|
6,583
|
Mortgage servicing
rights, net
|
|
27,114
|
|
28,991
|
Deferred tax asset,
net
|
|
21,556
|
|
12,227
|
Other assets
|
|
19,929
|
|
14,175
|
Total assets
|
|
$
3,117,554
|
|
$
3,130,465
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
demand
|
|
$
506,248
|
|
$
640,101
|
Interest-bearing demand
and money market deposits
|
|
1,049,536
|
|
1,318,799
|
Savings
|
|
117,923
|
|
151,646
|
Time
deposits
|
|
892,325
|
|
391,961
|
Total
deposits
|
|
2,566,032
|
|
2,502,507
|
FHLB
borrowings
|
|
210,000
|
|
311,700
|
FRB
borrowings
|
|
65,000
|
|
51
|
Subordinated notes,
net
|
|
39,855
|
|
39,920
|
Lease
liability
|
|
9,619
|
|
7,860
|
Other
liabilities
|
|
41,059
|
|
19,634
|
Total
liabilities
|
|
2,931,565
|
|
2,881,672
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock, no par
value; 50,000,000 shares authorized at December 31, 2023 and
December 31, 2022; 19,198,379 and 18,950,329 shares issued and
outstanding at December 31, 2023 and December 31, 2022,
respectively
|
|
197,636
|
|
195,960
|
Additional paid-in
capital
|
|
252
|
|
252
|
Retained
earnings
|
|
33,157
|
|
97,682
|
Accumulated other
comprehensive loss, net of tax
|
|
(45,056)
|
|
(45,101)
|
Total stockholders'
equity
|
|
185,989
|
|
248,793
|
Total liabilities and
stockholders' equity
|
|
$
3,117,554
|
|
$
3,130,465
|
(1) Derived from
audited December 31, 2022 consolidated financial statements, as
amended.
|
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
|
|
Consolidated
Statements of Operations (unaudited)
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
|
|
|
As
restated
|
(Dollars in
thousands, except per share data)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
Interest
income:
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
38,933
|
|
$
38,551
|
|
$
33,110
|
Interest on taxable
securities
|
|
2,457
|
|
2,492
|
|
2,508
|
Interest on nontaxable
securities
|
|
56
|
|
72
|
|
89
|
Interest on deposit
accounts and federal funds sold
|
|
1,714
|
|
1,370
|
|
754
|
Total interest
income
|
|
43,160
|
|
42,485
|
|
36,461
|
Interest
expense:
|
|
|
|
|
|
|
Interest on
deposits
|
|
17,899
|
|
16,115
|
|
5,131
|
Interest on
subordinated notes
|
|
543
|
|
566
|
|
547
|
Interest on FHLB and
FRB borrowings
|
|
2,955
|
|
3,612
|
|
2,651
|
Total interest
expense
|
|
21,397
|
|
20,293
|
|
8,329
|
Net interest
income
|
|
21,763
|
|
22,192
|
|
28,132
|
Provision for credit
losses - loans
|
|
3,600
|
|
11,600
|
|
11,793
|
Provision for (recovery
of) credit losses - unfunded commitments
|
(830)
|
|
(550)
|
|
—
|
Total provision for
credit losses
|
|
2,770
|
|
11,050
|
|
11,793
|
Net interest income
after provision for credit losses
|
|
18,993
|
|
11,142
|
|
16,339
|
Noninterest
income:
|
|
|
|
|
|
|
Fair value adjustments
of other equity investments
|
|
(1,469)
|
|
55
|
|
78
|
Residential mortgage
banking income, including MSRs
|
|
591
|
|
3,811
|
|
1,961
|
Gain on sale of
government guaranteed loans
|
|
905
|
|
6
|
|
204
|
Wealth and trust
management
|
|
483
|
|
462
|
|
451
|
Service charges on
deposit accounts
|
|
366
|
|
365
|
|
293
|
Increase in cash
surrender value of BOLI
|
|
310
|
|
311
|
|
402
|
Bank and purchase card,
net
|
|
446
|
|
357
|
|
866
|
Loss on sale of
securities available for sale
|
|
(71)
|
|
(442)
|
|
—
|
Other
|
|
2,546
|
|
2,490
|
|
1,585
|
Total noninterest
income
|
|
4,107
|
|
7,415
|
|
5,840
|
Noninterest
expense:
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
13,711
|
|
14,640
|
|
11,863
|
Occupancy and
equipment
|
|
1,549
|
|
1,475
|
|
1,509
|
Data
processing
|
|
1,499
|
|
1,710
|
|
1,441
|
Legal
|
|
(286)
|
|
912
|
|
1,300
|
Advertising and
marketing
|
|
184
|
|
350
|
|
318
|
Communications
|
|
927
|
|
1,181
|
|
1,064
|
Audit and accounting
fees
|
|
1,381
|
|
791
|
|
476
|
FDIC
insurance
|
|
1,762
|
|
1,322
|
|
543
|
Intangible
amortization
|
|
297
|
|
308
|
|
365
|
Other contractual
services
|
|
2,064
|
|
1,492
|
|
1,334
|
Other taxes and
assessments
|
|
809
|
|
802
|
|
716
|
Regulatory
remediation
|
|
3,155
|
|
3,782
|
|
2,884
|
Goodwill
impairment
|
|
—
|
|
26,826
|
|
—
|
ESOP
litigation
|
|
—
|
|
6,000
|
|
—
|
Other
|
|
3,531
|
|
3,030
|
|
3,739
|
Total noninterest
expense
|
|
30,583
|
|
64,621
|
|
27,552
|
Loss before income
tax
|
|
$
(7,483)
|
|
$
(46,064)
|
|
$
(5,373)
|
Income tax
benefit
|
|
(1,724)
|
|
(4,693)
|
|
(1,097)
|
Net
loss
|
|
$
(5,759)
|
|
$
(41,371)
|
|
$
(4,276)
|
Basic and diluted
loss per common share
|
|
$
(0.30)
|
|
$
(2.18)
|
|
$
(0.23)
|
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
|
|
For the Twelve
Months Ended
|
|
|
(unaudited)
|
|
As restated
(1)
|
(Dollars in
thousands, except per share data)
|
|
December 31,
2023
|
|
December 31,
2022
|
Interest
income:
|
|
|
|
|
Interest and fees on
loans
|
|
$
152,942
|
|
$
111,002
|
Interest on taxable
securities
|
|
10,120
|
|
8,744
|
Interest on nontaxable
securities
|
|
313
|
|
334
|
Interest on deposit
accounts and federal funds sold
|
|
5,620
|
|
1,572
|
Total interest
income
|
|
168,995
|
|
121,652
|
Interest
expense:
|
|
|
|
|
Interest on
deposits
|
|
59,969
|
|
11,260
|
Interest on
subordinated notes
|
|
2,209
|
|
2,215
|
Interest on FHLB and
FRB borrowings
|
|
13,776
|
|
3,610
|
Total interest
expense
|
|
75,954
|
|
17,085
|
Net interest
income
|
|
93,041
|
|
104,567
|
Provision for credit
losses - loans
|
|
24,703
|
|
25,687
|
Provision for (recovery
of) credit losses - unfunded commitments
|
|
(2,380)
|
|
—
|
Total provision for
credit losses
|
|
22,323
|
|
25,687
|
Net interest income
after provision for credit losses
|
|
70,718
|
|
78,880
|
Noninterest
income:
|
|
|
|
|
Fair value adjustments
of other equity investments
|
|
(1,746)
|
|
9,306
|
Residential mortgage
banking income, including MSRs
|
|
10,000
|
|
20,647
|
Gain on sale of
government guaranteed loans
|
|
5,704
|
|
4,734
|
Wealth and trust
management
|
|
1,839
|
|
1,769
|
Service charges on
deposit accounts
|
|
1,423
|
|
1,289
|
Increase in cash
surrender value of BOLI
|
|
1,195
|
|
1,348
|
Bank and purchase card,
net
|
|
1,703
|
|
2,240
|
Loss on sale of
securities available for sale
|
|
(513)
|
|
—
|
Other
|
|
8,936
|
|
6,759
|
Total noninterest
income
|
|
28,541
|
|
48,092
|
Noninterest
expense:
|
|
|
|
|
Salaries and employee
benefits
|
|
58,158
|
|
56,006
|
Occupancy and
equipment
|
|
6,506
|
|
5,916
|
Data
processing
|
|
5,686
|
|
4,593
|
Legal
|
|
4,613
|
|
3,004
|
Advertising and
marketing
|
|
1,157
|
|
1,460
|
Communications
|
|
4,410
|
|
3,825
|
Audit and accounting
fees
|
|
2,821
|
|
1,304
|
FDIC
insurance
|
|
5,059
|
|
1,340
|
Intangible
amortization
|
|
1,295
|
|
1,525
|
Other contractual
services
|
|
7,713
|
|
3,137
|
Other taxes and
assessments
|
|
3,216
|
|
2,668
|
Regulatory
remediation
|
|
10,459
|
|
7,442
|
Merger-related
|
|
—
|
|
50
|
Goodwill
impairment
|
|
26,826
|
|
—
|
ESOP
litigation
|
|
6,000
|
|
—
|
Other
|
|
14,184
|
|
12,506
|
Total noninterest
expense
|
|
158,103
|
|
104,776
|
(Loss) income from
continuing operations before income tax
|
|
(58,844)
|
|
22,196
|
Income tax (benefit)
expense
|
|
(7,071)
|
|
5,199
|
Net (loss) income
from continuing operations
|
|
$
(51,773)
|
|
$
16,997
|
Discontinued
operations:
|
|
|
|
|
Income from
discontinued operations before income taxes
|
|
—
|
|
426
|
Income tax
expense
|
|
—
|
|
89
|
Net income from
discontinued operations
|
|
$
—
|
|
$
337
|
Net (loss)
income
|
|
$
(51,773)
|
|
$
17,334
|
Net income from
discontinued operations attributable to noncontrolling
interest
|
|
—
|
|
(1)
|
Net (loss) income
attributable to Blue Ridge Bankshares, Inc.
|
|
$
(51,773)
|
|
$
17,333
|
Net (loss) income
available to common stockholders
|
|
$
(51,773)
|
|
$
17,333
|
Basic and diluted
(loss) earnings per common share from continuing
operations
|
|
$
(2.73)
|
|
$
0.90
|
(1) Derived from
audited December 31, 2022 consolidated financial statements, as
amended.
|
Blue Ridge
Bankshares, Inc.
|
|
|
|
|
|
|
|
|
|
|
Quarter Summary of
Selected Financial Data (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the
Three Months Ended
|
|
|
|
|
|
|
As
restated
|
|
As
restated
|
|
As
restated
|
(Dollars and
shares in thousands, except per share data)
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
Income Statement
Data:
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
Interest
income
|
|
$
43,160
|
|
$
42,485
|
|
$
42,460
|
|
$
40,890
|
|
$
36,461
|
Interest
expense
|
|
21,397
|
|
20,293
|
|
18,570
|
|
15,694
|
|
8,329
|
Net interest
income
|
|
21,763
|
|
22,192
|
|
23,890
|
|
25,196
|
|
28,132
|
Provision for (recovery
of) credit losses
|
|
2,770
|
|
11,050
|
|
10,013
|
|
(1,510)
|
|
11,793
|
Net interest income
after provision for credit losses
|
|
18,993
|
|
11,142
|
|
13,877
|
|
26,706
|
|
16,339
|
Noninterest
income
|
|
4,107
|
|
7,415
|
|
9,736
|
|
7,283
|
|
5,840
|
Noninterest expense,
excluding goodwill impairment
|
|
30,583
|
|
37,795
|
|
34,052
|
|
28,847
|
|
27,552
|
Goodwill
impairment
|
|
—
|
|
26,826
|
|
—
|
|
—
|
|
—
|
(Loss) income before
income taxes
|
|
(7,483)
|
|
(46,064)
|
|
(10,439)
|
|
5,142
|
|
5,373
|
Income tax (benefit)
expense
|
|
(1,724)
|
|
(4,693)
|
|
(1,826)
|
|
1,172
|
|
(1,097)
|
Net (loss)
income
|
|
$
(5,759)
|
|
$
(41,371)
|
|
$
(8,613)
|
|
$
3,970
|
|
$
(4,276)
|
Per Common Share
Data:
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share - basic and diluted
|
|
$
(0.30)
|
|
$
(2.18)
|
|
$
(0.45)
|
|
$
0.21
|
|
$
(0.23)
|
Dividends declared per
common share
|
|
—
|
|
—
|
|
—
|
|
0.1225
|
|
0.1225
|
Book value per common
share
|
|
9.69
|
|
9.53
|
|
12.21
|
|
13.03
|
|
13.13
|
Tangible book value per
common share - Non-GAAP
|
|
9.47
|
|
9.30
|
|
10.55
|
|
11.36
|
|
11.44
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
3,117,554
|
|
$
3,262,713
|
|
$
3,214,424
|
|
$
3,324,060
|
|
$
3,130,465
|
Average
assets
|
|
3,165,886
|
|
3,249,112
|
|
3,277,282
|
|
3,270,110
|
|
3,020,371
|
Average
interest-earning assets
|
|
2,979,065
|
|
3,038,795
|
|
3,064,103
|
|
3,060,534
|
|
2,812,898
|
Loans held for
investment (including PPP loans)
|
|
2,430,947
|
|
2,446,370
|
|
2,454,431
|
|
2,452,783
|
|
2,411,059
|
Loans held for
investment (excluding PPP loans)
|
|
2,428,561
|
|
2,439,956
|
|
2,447,197
|
|
2,444,795
|
|
2,399,092
|
Allowance for credit
losses
|
|
35,893
|
|
49,631
|
|
38,567
|
|
35,961
|
|
30,740
|
Purchase accounting
adjustments (discounts) on acquired loans
|
5,117
|
|
5,831
|
|
6,381
|
|
6,724
|
|
7,872
|
Loans held for
sale
|
|
46,337
|
|
69,640
|
|
64,102
|
|
76,528
|
|
69,534
|
Securities available
for sale, at fair value
|
|
321,081
|
|
313,930
|
|
340,617
|
|
351,990
|
|
354,341
|
Noninterest-bearing
demand deposits
|
|
506,248
|
|
572,969
|
|
575,989
|
|
594,518
|
|
640,101
|
Total
deposits
|
|
2,566,032
|
|
2,776,152
|
|
2,613,094
|
|
2,761,047
|
|
2,502,507
|
Subordinated notes,
net
|
|
39,855
|
|
39,871
|
|
39,888
|
|
39,904
|
|
39,920
|
FHLB and FRB
advances
|
|
275,000
|
|
215,000
|
|
284,100
|
|
239,100
|
|
311,751
|
Average
interest-bearing liabilities
|
|
2,362,774
|
|
2,354,360
|
|
2,346,722
|
|
2,169,643
|
|
1,777,391
|
Total stockholders'
equity
|
|
185,989
|
|
182,837
|
|
231,271
|
|
246,735
|
|
248,793
|
Average stockholders'
equity
|
|
223,840
|
|
238,530
|
|
257,117
|
|
259,911
|
|
263,826
|
Weighted average common
shares outstanding - basic
|
|
19,033
|
|
19,015
|
|
18,851
|
|
18,856
|
|
18,857
|
Weighted average common
shares outstanding - diluted
|
|
19,033
|
|
19,015
|
|
18,851
|
|
18,860
|
|
18,857
|
Financial
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
-0.73 %
|
|
-5.09 %
|
|
-1.05 %
|
|
0.49 %
|
|
-0.57 %
|
Return on average
equity (1)
|
|
-10.29 %
|
|
-69.38 %
|
|
-13.40 %
|
|
6.11 %
|
|
-6.48 %
|
Total loan to deposit
ratio
|
|
96.5 %
|
|
90.6 %
|
|
96.4 %
|
|
91.6 %
|
|
99.1 %
|
Held for investment
loan to deposit ratio
|
|
94.7 %
|
|
88.1 %
|
|
93.9 %
|
|
88.8 %
|
|
96.3 %
|
Net interest margin
(1)
|
|
2.92 %
|
|
2.92 %
|
|
3.12 %
|
|
3.30 %
|
|
4.00 %
|
Cost of deposits
(1)
|
|
2.73 %
|
|
2.46 %
|
|
2.21 %
|
|
1.74 %
|
|
0.85 %
|
Cost of funds
(1)
|
|
2.91 %
|
|
2.73 %
|
|
2.49 %
|
|
2.11 %
|
|
1.22 %
|
Efficiency
ratio
|
|
118.2 %
|
|
127.7 %
|
|
101.3 %
|
|
88.8 %
|
|
81.1 %
|
Regulatory remediation
expenses
|
|
3,155
|
|
3,782
|
|
2,388
|
|
1,134
|
|
2,884
|
Capital and Asset
Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity to average assets
|
|
7.1 %
|
|
7.3 %
|
|
7.8 %
|
|
7.9 %
|
|
8.7 %
|
Allowance for credit
losses to loans held for investment, excluding PPP loans
|
|
1.48 %
|
|
2.03 %
|
|
1.58 %
|
|
1.47 %
|
|
1.28 %
|
Ratio of net
charge-offs to average loans outstanding (1)
|
|
2.84 %
|
|
0.09 %
|
|
1.29 %
|
|
0.17 %
|
|
0.28 %
|
Nonperforming loans to
total assets
|
|
2.01 %
|
|
2.51 %
|
|
2.54 %
|
|
2.63 %
|
|
2.69 %
|
Nonperforming assets to
total assets
|
|
2.01 %
|
|
2.51 %
|
|
2.54 %
|
|
2.63 %
|
|
2.70 %
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common
Equity:
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
$
185,989
|
|
$
182,837
|
|
$
231,271
|
|
$
246,735
|
|
$
248,793
|
Less: Goodwill and
other intangibles, net of deferred tax liability (2)
|
|
(4,179)
|
|
(4,286)
|
|
(31,427)
|
|
(31,637)
|
|
(32,027)
|
Tangible common equity
(Non-GAAP)
|
|
$
181,810
|
|
$
178,551
|
|
$
199,844
|
|
$
215,098
|
|
$
216,766
|
Total shares
outstanding
|
|
19,198
|
|
19,192
|
|
18,934
|
|
18,942
|
|
18,950
|
Book value per common
share
|
|
$
9.69
|
|
$
9.53
|
|
$
12.21
|
|
$
13.03
|
|
$
13.13
|
Tangible book value per
common share (Non-GAAP)
|
|
9.47
|
|
9.30
|
|
10.55
|
|
11.36
|
|
11.44
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
stockholders' equity to tangible total assets
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
3,117,554
|
|
$
3,262,713
|
|
$
3,214,424
|
|
$
3,324,060
|
|
$
3,130,465
|
Less: Goodwill and
other intangibles, net of deferred tax liability (2)
|
|
(4,179)
|
|
(4,286)
|
|
(31,427)
|
|
(31,637)
|
|
(32,027)
|
Tangible total assets
(Non-GAAP)
|
|
$
3,113,375
|
|
$
3,258,427
|
|
$
3,182,997
|
|
$
3,292,423
|
|
$
3,098,438
|
Tangible common equity
(Non-GAAP)
|
|
$
181,810
|
|
$
178,551
|
|
$
199,844
|
|
$
215,098
|
|
$
216,766
|
Tangible stockholders'
equity to tangible total assets (Non-GAAP)
|
|
5.8 %
|
|
5.5 %
|
|
6.3 %
|
|
6.5 %
|
|
7.0 %
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Annualized.
|
|
|
|
|
|
|
|
|
|
|
(2) Excludes mortgage
servicing rights.
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Blue Ridge Bankshares, Inc.