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  Title	Blue Ridge Bankshares, Inc. Announces 2025 Second Quarter Results
  ID	11882944
  External ID	7920845749
  Author	Unknown
  Published Date	July 24, 2025, 4:24 a.m.
  Summary	Reports net income for the quarter and continued progress on regulatory remediation efforts RICHMOND, Va., /PRNewswire/ -- Blue Ridge Bankshares, Inc. (the "Company") (NYSE American: BRBS), the holdin
  Tags	press-release
  URL	https://www.ricentral.com/online_features/press_releases/blue-ridge-bankshares-inc-announces-2025-second-quarter-results/article_c1b6847f-3e45-5e04-8900-4c2ff1774f49.html
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  Content ID	7599706
  Key	49af3393-37b1-488c-aa54-d532f709ed96
  Content	Reports net income for the quarter and continued progress on regulatory remediation efforts RICHMOND, Va., /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., today announced financial results for the quarter ended June 30, 2025. For the quarter ended June 30, 2025, the Company reported net income of $1.3 million, or $0.01 per diluted common share, compared to a net loss of $0.4 million, or ($0.01) per diluted common share, for the quarter ended March 31, 2025, and a net loss of $11.4 million, or ($0.47) per diluted common share, for the second quarter of 2024. For the first half of 2025, the Company reported net income of $0.9 million, or $0.01 per diluted common share, compared to a net loss of $14.3 million, or ($0.66) per diluted common share, for the first half of 2024. A Message From Blue Ridge Bankshares, Inc. President and CEO, G. William "Billy" Beale: "In our earnings release for first quarter 2025, I mentioned the results were a harbinger for future sustainable and increasing profitability. I am pleased to report that the Company earned $1.3 million for the second quarter and became profitable for the first half of 2025. "There are several encouraging trends. Our net interest margin, driven primarily by lower deposit costs, grew to 3.15% for the quarter, notwithstanding a smaller balance sheet. Noninterest income from service charges on deposit accounts improved through our efforts to align to market level pricing. "Reduction in noninterest expense remains a focus. The quarter reflected an improvement or reduction in expenses of almost $1.0 million from the first quarter. Included in our noninterest expenses are the salary and benefit savings we expected from the headcount reductions made in the prior quarter. These reductions in expense were masked in the quarter by additional costs relating to a component of our incentive plan, which is tied to annual profitability targets. Headcount reductions in the first half of 2025 were 109 and 170 since the end of the second quarter of 2024. We expect to report further reductions in noninterest expenses in future quarters, as we continue to focus on operational improvements and believe we are nearing the completion of regulatory remediation activities. We continue to expect to achieve an annualized run rate of noninterest expense to assets of less than 3% by the fourth quarter of this year. "With significant progress made toward remediation of the January 2024 consent order, we have turned our focus to growing our community bank. To date, the runoff of non-core loans and deposits exceeds new loans and deposits generated within our footprint. We expect this trend to continue, but at a slower pace in the third quarter. "I am encouraged by what I see in the financials; however, I am more encouraged by my teammates and their energy as we turn from a team of 'fixers' to a team of 'growers'." Sale of Monarch Mortgage On March 27, 2025, the Company completed the previously announced sale of its mortgage division operating as Monarch Mortgage. The sale, which included the transfer of certain assets and leases to an unrelated mortgage company, resulted in a $0.2 million loss, reported in other noninterest income in the year-to-date 2025 period. As of June 30, 2025, the Company had closed, funded, and sold the loans that were in process at the time of the sale. Q2 2025 Highlights (Comparisons for Second Quarter 2025 are relative to First Quarter 2025 unless otherwise noted.) Net Income: per diluted common share, compared to a net loss of per diluted common share, for the prior quarter. The second quarter income before income taxes of – primarily the recovery of non-credit-related amounts reserved for in the prior year – as the Company concluded outstanding exit activities with a former fintech banking-as-a-service ("BaaS") partner. The prior quarter loss before income taxes of in severance costs and a loss on the mortgage division sale. Net Interest Income / Net Interest Margin: Net interest income totaled for the second and first quarters, respectively. Interest income decreased by in the second quarter, primarily due to the decline in average balances of interest earning assets, which declined $94.9 million from the prior quarter. Interest expense declined by $1.5 million, largely driven by the decline in average balances and costs of interest-bearing deposits, which declined $74.3 million and 19 basis points, respectively, from the prior quarter. Net interest margin improved to 3.15% during the quarter from 2.90% in the prior quarter, primarily reflecting the decline in the cost of deposits. June 1, 2025, the initial redemption date, the Company completed the redemption of its $15.0 million fixed-to-floating rate subordinated note with a final maturity date of June 1, 2030 (the "2030 Note"). The interest rate on the 2030 Note was 6.0% up to the redemption date. Interest expense on the 2030 Note was $0.2 million for both the second and first quarters of 2025. , the Company provided to the holders of its of subordinated notes maturing October 15, 2029 (the "2029 Notes") a notice of partial redemption at the next interest payment date of of the 2029 Notes. On, the Company completed the partial redemption. On, the rate on the 2029 Notes reset to 8.59%, which was the then three-month Secured Overnight Funding Rate ("SOFR") plus 433.5 basis points. Interest expense and the effective interest rate on the 2029 Notes were and 7.86%, respectively, for the second quarter of 2025, compared to and 8.05% for the first quarter. Capital: The ratio of tangible common stockholders' equity to tangible total assets was 13.4% at the prior quarter end. The increase in this ratio was primarily driven by the exercise of warrants for one million common shares and a smaller balance sheet. Tangible book value per common share ("TBV") was at the end of the current and prior quarters, respectively. TBV does not include the effect of the second quarter grant of performance-based restricted stock awards ("PSAs") totaling 3.4 million shares of common stock to certain executive officers, which would have a, 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 12.89%, 17.86%, 17.86%, and 18.91%, respectively, compared to 12.33%, 16.88%, 16.88%, and 17.93%, respectively, at the prior quarter end. Capital ratios for the Company at for tier 1 leverage ratio, tier 1 risk-based capital ratio, common equity tier 1 capital ratio, and total risk-based capital ratio were 13.93%, 19.29%, 19.29%, and 21.37%, respectively, compared to 13.23%, 18.06%, 18.06%, and 20.83%, respectively, at the prior quarter end. , the Bank's tier 1 leverage and total risk-based capital ratios exceeded 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 minimum tier 1 leverage ratio of 10.00% and a total risk-based capital ratio of 13.00%. Asset Quality: Nonperforming loans, which include nonaccrual loans and loans past due 90 days or more and accruing interest, were, or 0.94% of total assets, at quarter end compared to, or 0.93% of total assets, at the prior quarter end. was reported for the second quarter compared to no provision for or recovery of credit losses for the prior quarter. In the second quarter, lower allowance for credit losses ("ACL") needs were due to loan portfolio balance reductions, partially offset by specific reserves and charge-offs for out-of-market loans purchased in prior years. The ACL as a percentage of total loans held for investment was 1.11% at quarter end compared to 1.12% at the prior quarter end. Net loan charge-offs were for the prior quarter. Net loan charge-offs (recoveries) to average loans outstanding ratio (quarter-to-date annualized) for the second quarter was 0.09% compared to (0.02%) for the prior quarter. Noninterest Income / Noninterest Expense: in the prior quarter. The improvement was primarily due to higher service charges on deposit accounts and a release of reserves upon the receipt of contractually held back sales proceeds from the 2024 mortgage servicing rights ("MSR") asset sales, partially offset by the reduction in the value of the remaining MSR assets. Improved service fee income was primarily due to the execution of a project to more closely align products and pricing with competitors in the markets in which the Bank operates. Noninterest income in the first quarter included a loss on the sale of the mortgage division. Noninterest expense for the quarter was in the prior quarter, a decrease of. The decrease was primarily due to the second quarter recovery of non-credit-related amounts reserved for in the prior year, upon the conclusion of exit activities with a former fintech BaaS partner. Salaries and employee benefits expense totaled in the first quarter, including severance costs of of expense for PSAs, including expense relating to the first quarter of the annual performance period. Excluding these items, there was a decline in salaries and benefits expense quarter over quarter, due to reductions in headcount. As of the end of the second and first quarters, headcount was 333 and 351, respectively. Income Tax: Income tax expense (benefit) for the second and first quarters was, respectively, with an effective income tax rate for the same respective periods of 27.0% and 51.2%. The higher effective income tax rate in the prior quarter was driven by a favorable adjustment related to a change in the state tax rate applied to the accumulated unrealized loss on the available for sale securities portfolio. Excluding this adjustment, the effective income tax rate for the prior quarter was 22.7%. Balance Sheet: Total assets decreased to at the prior quarter end, a reduction of $129.6 million, primarily driven by declines in loans held for investment of $81.1 million, loans held for sale of $11.2 million, and lower cash balances of $42.5 million. Included in the reduction of loans held for investment in the quarter were $16.1 million of out-of-market loans. Total deposits decreased to $2.01 billion from $2.13 billion at the prior quarter end, a decline of $119.2 million. Deposits, excluding wholesale deposits, decreased $76.2 million in the second quarter. Brokered deposit balances declined $43.0 million in the second quarter, as existing brokered time deposits were paid off upon maturity. Sources of liquidity, which consist primarily of on-balance sheet cash, unpledged securities available for sale, and available credit under secured borrowing facilities, totaled, or 183.3% of uninsured deposits as of. Sources of liquidity as of, or 182.9% of uninsured deposits. Income Statement: Net interest income was $19.8 million and $19.0 million for the second and first quarters of 2025, respectively, and $20.1 million for the second quarter of 2024. The decline in the 2025 periods from the 2024 period was primarily attributable to lower interest and fee income on loans due to lower average balances. The decline in interest and fee income was offset by lower average balances and costs of interest-bearing deposit accounts. Average balances of interest-earning assets decreased $94.9 million to $2.53 billion in the second quarter of 2025, relative to the prior quarter, and decreased $360.4 million from the year-ago quarter period. Relative to the prior quarter and the year-ago period, the decrease reflected primarily lower average balances of loans held for investment. The yield on loans held for investment was 5.80% and 5.70% for the second and first quarters of 2025, respectively, and 5.80% for the second quarter of 2024. Average balances of interest-bearing liabilities decreased $79.6 million, to $1.82 billion in the second quarter of 2025, relative to the prior quarter, primarily attributable to the payoff of wholesale deposits ( $43.0 million ), and decreased $408.3 million from the year-ago quarter period. The second quarter of 2025 decline relative to the same period of 2024 was primarily due to the exit of fintech BaaS deposit operations ( $172.5 million ) and the payoff of wholesale deposits ( $168.3 million ) and borrowings ( $67.8 million ). Cost of funds was 2.63% for the second quarter of 2025, compared to 2.78% for the first quarter of 2025, and 3.02% for the second quarter of 2024, while cost of deposits was 2.47%, 2.62%, and 2.84%, for the same respective periods. The decrease in cost of funds relative to the prior quarter was primarily due to lower average balances of higher cost wholesale funding, and relative to the year-ago period, the exit of fintech BaaS deposit operations. Cost of deposits, excluding wholesale deposits, was 1.01% for the quarter compared to 1.34% for the prior quarter and 2.28% for the year-ago period. Net interest margin was 3.15% for the second quarter of 2025 compared to 2.90% for the prior quarter and 2.79% for the second quarter of 2024. The increases over the respective periods was driven primarily by lower funding costs of time deposits, which include wholesale deposits. A recovery of credit losses of $0.7 million was reported for the second quarter of 2025, compared to no recovery of credit losses in the first quarter of 2025 and a provision for credit losses of $3.1 million for the second quarter of 2024. The second quarter of 2025 recovery resulted from declines in balances of loans held for investment, partially offset by specific reserves and charge-offs for out-of-market loans purchased in prior years. The provision for credit losses 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. Noninterest income was $3.2 million for the second quarter of 2025, compared to $3.1 million for the first quarter of 2025, and $0.3 million for the second quarter of 2024. The improvement relative to the prior quarter was primarily due to higher service charges on deposit accounts and $0.3 million for the release of the previously noted MSR sale reserve, partially offset by the reduction in the value of the remaining MSR assets. The Bank has earned improved service fee income due to the previously noted products and pricing initiative. Noninterest income for the second quarter of 2024 included an $8.5 million non-cash negative fair value adjustment of an equity investment the Company holds in a fintech company, partially offset by residential mortgage banking income, including servicing income and gains from the sale of loans originated by the now-sold mortgage division. Noninterest expense was $22.0 million for the second quarter of 2025, compared to $23.0 million for the first quarter of 2025, and $29.3 million for the second quarter of 2024. Noninterest expense decreased $1.0 million from the prior quarter and $7.3 million from the year-ago period. The decline relative to the prior quarter was primarily due to the previously noted cash recovery of amounts reserved for in the prior year due to the exit of activities with a former fintech BaaS partner. Salaries and employee benefits expense included severance of $0.3 million and $0.7 million for the second and first quarters of 2025, respectively, as well as $2.0 million and $0 of expense for PSAs for the same respective periods. The decline in noninterest expense in the second quarter of 2025 compared to the same period of 2024 was primarily due to lower salaries and employee benefits, consulting, and regulatory remediation expenses. These reductions reflect a smaller workforce as the Company continues to right-size its operations, completes certain regulatory directives, and transitions to a more traditional community banking model. Balance Sheet: Loans held for investment were $1.98 billion at June 30, 2025, compared to $2.06 billion at March 31, 2025, and $2.26 billion at June 30, 2024. The decline relative to the prior quarter was partially due to payoffs and paydowns of approximately $16.1 million of out-of-market loans. The second quarter of 2025 decline relative to the same period of 2024 was partially attributable to the Company's plan to purposefully and selectively reduce assets to partially meet the liquidity needs of the fintech BaaS depository operations exit, which was completed at the end of 2024, as well as to transition the Company to a more traditional community banking model. Total deposits were $2.01 billion at June 30, 2025, a decrease of $119.2 million and $315.6 million from March 31, 2025 and June 30, 2024, respectively. Excluding wholesale deposits, total deposits decreased $76.2 million from the prior quarter end and $147.2 million from the second quarter of 2024. The Company previously reported that it was prohibited from the acceptance, renewal, or rollover of brokered deposits as a result of the Consent Order; however, the Company received approvals from the FDIC allowing the Bank to accept, renew, or rollover brokered deposits for a six-month period ending June 2025 and limited to the amount of maturities during this period. In June 2025, the Company received an extension for an additional six-month period, through December 2025. Brokered deposits at June 30, 2025 were $296.1 million, a decline of $43.0 million from March 31, 2025, and a decline of $168.3 million from June 30, 2024. The Company had secured brokered deposits to enhance liquidity during the fintech BaaS wind down. Noninterest-bearing deposits represented 21.5%, 21.3%, and 20.2% of total deposits at June 30, 2025, March 31, 2025, and June 30, 2024, respectively. Excluding brokered deposits, noninterest-bearing deposits represented 24.6%, 25.2%, and 24.5% of total deposits as of the same respective dates. About Blue Ridge Bankshares, Inc.: Blue Ridge Bankshares, Inc. is the holding company for Blue Ridge Bank and BRB Financial Group, Inc. The Company, through its subsidiaries and affiliates, provides a wide range of financial services including retail and commercial banking. The Company also provides investment and wealth management services and management services for personal and corporate trusts, including estate planning and trust administration. Visit www.mybrb.com for more information. Reclassifications: Certain amounts presented in the consolidated financial statements of prior periods have been reclassified to conform to current period presentations. The reclassifications had no effect on net income (loss), net income (loss) per share, or stockholders' equity, as previously reported. 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 and capital position of the Company's business. 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 phrases 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: 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; Consent Order with the OCC, including the heightened capital requirements and other restrictions therein, and other regulatory directives; the imposition of additional regulatory actions or restrictions for noncompliance with the Consent Order or otherwise; the Company's involvement in, and the outcome of, any litigation, legal proceedings, or enforcement actions that may be instituted against the Company; reputational risk and potential adverse reactions of the Company's customers, suppliers, employees, or other business partners; the Company's ability to manage its fintech relationships, including implementing enhanced controls and procedures, complying with the OCC directives and applicable laws and regulations, and managing the wind down 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 growing and retaining deposits and secondary funding sources, especially if the Company's or its industry's reputation become damaged; the ability to maintain capital levels adequate to support the Company's business and to comply with the Consent Order directives; the ability of the Company to implement cost-saving initiatives and efficiency measures, as well as increase earning assets, in order to yield acceptable levels of profitability; the ability to generate sufficient future taxable income for the Company to realize its deferred tax assets, including the net operating loss carryforward; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the willingness of users to substitute competitors' products and services for the Company's products and services; adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, 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 the 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, the application thereof by bank regulatory bodies, and the three branches of the federal government; 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 or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the economic impact of duties, tariffs, or other barriers or restrictions on trade, any retaliatory counter measures, and the volatility and uncertainty arising therefrom; 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 and in filings the Company makes from time to time with the U.S. Securities and Exchange Commission ("SEC"). The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in filings the Company makes from time to time with the SEC. Any one of these risks or factors could have a material adverse impact on the Company's results of operations or financial condition, or cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, forward-looking information and statements contained in this release. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on its forward-looking statements. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements, which speak only as of the date of this release. The Company does not undertake to, and will not, update or revise these forward-looking statements after the date hereof, whether as a result of new information, future events, or otherwise. 1 Non-GAAP financial measure. Further information can be found at the end of this press release. Blue Ridge Bankshares, Inc. Consolidated Balance Sheets (Dollars in thousands, except share data) Securities available for sale, at fair value Restricted equity investments Loans held for investment, net of deferred fees and costs Less: allowance for credit losses Loans held for investment, net Liabilities and Stockholders' Equity Interest-bearing demand and money market deposits Commitments and contingencies Common stock, no par value; 150,000,000 shares authorized at June 30, 2025 and December 31, 2024, respectively; and 92,174,530 and 84,972,610 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively Accumulated other comprehensive loss, net of tax Total liabilities and stockholders' equity
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