CHARLOTTESVILLE, Va., July 31,
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 June
30, 2023.
For the second quarter of 2023, the Company reported net loss
from continuing operations of $19.5
million, or $1.03 per diluted
common share, compared to net income from continuing operations of
$1.6 million, or $0.09 per diluted common share, for the first
quarter of 2023, and net income from continuing operations of
$1.1 million, or $0.06 per diluted common share, for the second
quarter of 2022.
A Message From Blue Ridge Bankshares, Inc. President and CEO,
G. William "Billy" Beale:
"The net loss for the quarter was driven primarily by higher
provision expense and the associated reversal of interest income
related to loans that were placed on nonaccrual during the quarter.
This group of loans, totaling $58.1
million at quarter-end, were sourced by a former lender, and
is best described as specialty finance that we deemed to be not in
keeping with our desired risk profile. I don't believe this asset
quality matter is pervasive within our loan portfolio, and
excluding these loans, measures of asset quality were generally
stable as compared to the prior quarter.
Having recently joined the organization in May 2023, I am pleased to have found Blue Ridge to be a quality bank providing
exceptional service to its customers. My foremost priority, and
that of our team, is to remain focused on our regulatory
remediation efforts, as we continue to work diligently to bring the
Bank's fintech policies, procedures, and operations into conformity
with regulatory directives. At the same time, we want to
re-energize the core banking franchise by attracting new customers
from within our footprint, while supporting our fintech partners
that continue to gain momentum."
Q2 2023 Highlights
(Comparisons for Second Quarter 2023 are relative to First
Quarter 2023 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 $2.4 million
in the second quarter of 2023 compared to $1.1 million in the prior quarter.
Asset Quality:
- Nonperforming loans totaled $86.1
million, or 2.68% of total assets, compared to $30.7 million, or 0.92% of total assets, at the
prior quarter-end. The increase reflects the migration of a group
of specialty finance loans to nonaccrual status during the quarter.
These loans had a 1.79% impact on the nonperforming loans to total
assets ratio for the second quarter.
- The Company recorded a provision for credit losses of
$20.5 million, compared to
$3.7 million last quarter. Net loan
charge-offs were $8.0 million in the
quarter, representing an annualized net charge-off rate of 1.29% of
average loans, compared to $1.1
million, representing an annualized net charge-off rate of
0.17% of average loans, for the prior quarter. Net loan charge-offs
in the quarter were primarily attributable to one loan.
- The allowance for credit losses ("ACL") as a percentage of
total loans held for investment was 1.76% at quarter-end, compared
to 1.22% at the prior quarter-end. Specific reserves associated
with the aforementioned specialty finance loans totaled
$14.1 million at June 30, 2023.
Capital:
- As previously announced, on July 12,
2023, the Board of Directors determined to forego the
declaration and payment of a cash dividend on the Company's common
stock in the third quarter of 2023. The decision was based on the
desire to preserve capital and available cash.
- The ratio of tangible stockholders' equity to tangible total
assets was 6.3%1, compared to 6.8%1 at the
prior quarter-end. Tangible book value per common share was
$10.551, compared to
$11.931 at the prior
quarter-end.
- For the quarter ended June 30,
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 7.86%, 9.27%, 9.27%, and 10.77%,
respectively, compared to 8.50%, 10.06%, 10.06%, and 11.12%,
respectively, at the prior quarter-end. Capital ratios at
quarter-end were within regulatory guidelines to categorize the
Bank as well capitalized.
Net Interest Income / Net Interest Margin:
- Net interest income was $20.4
million, a decline of $7.0
million from the prior quarter, primarily reflecting the
reversal of $4.7 million in interest
income, related to the aforementioned group of specialty finance
loans, and higher funding costs. These impacts were partially
offset by increasing loan yields in the quarter, which increased 5
basis points excluding the effect of the interest income
reversal.
- Net interest margin was 2.67% compared to 3.58% for the prior
quarter. The reversal of interest income noted above had an
approximate negative 60 basis points impact on second quarter net
interest margin.
- Cost of deposits and total cost of funds were 2.21% and 2.49%,
respectively, compared to 1.74% and 2.11%, respectively, for the
prior quarter. Federal Home Loan Bank of Atlanta ("FHLB") and Federal Reserve Bank of
Richmond ("FRB") advances were
$284.1 million at June 30, 2023, compared to $239.1 million at the prior quarter-end. Deposit
costs and overall funding costs increased during the second quarter
of 2023 due primarily to the impact of higher average balances of
wholesale funding secured in late first quarter in response to then
market events, as well as interest rates on deposits that adjust
with changes in federal funds rates.
Balance Sheet:
- Total deposit balances declined $148.0
million, or 5.4%, from the prior quarter-end, due primarily
to a decrease of $93.8 million in
wholesale funding, primarily time deposits and interest-bearing
demand balances. Excluding wholesale funding, total deposits during
the second quarter of 2023 declined by 2.1% from the prior
quarter-end.
- Deposits related to fintech relationships were $708 million at June 30,
2023, compared to $716 million
at the prior quarter-end. These deposits represented 27.1% of total
deposits at June 30, 2023, compared
to 25.9% of total deposits at the prior quarter-end. Excluding
wholesale funding, deposits related to fintech relationships
represented 30.1% and 29.8% of total deposits at June 30, 2023 and March
31, 2023, respectively.
- Loans held for investment, excluding Paycheck Protection
Program ("PPP") loans, were $2.45
billion, essentially level with the prior quarter-end.
- The held for investment loan to deposit ratio measured 94.1% at
quarter-end, compared to 89.0% at the prior quarter-end. The
increase was primarily due to the reduction in wholesale
deposits.
Noninterest Income / Noninterest Expense:
- Noninterest income was $9.7
million, compared to $7.3
million for the prior quarter, due primarily to fair value
adjustments to mortgage servicing rights ("MSRs"), reported in
residential mortgage banking income, which were a positive
$0.8 million, compared to a negative
$2.1 million in the prior
quarter.
- Noninterest expense was $34.1
million, compared to $28.8
million for the prior quarter. Increased expenses primarily
reflected higher other contractual services, legal, regulatory
remediation, and FDIC insurance costs, partially offset by lower
salaries and employee benefits costs. Higher other contractual
services expense was primarily due to outsourced BSA/AML compliance
services as the Bank continues to augment its compliance staff,
while higher legal expense was primarily attributable to corporate,
employee benefit plans, and other employment matters. Higher FDIC
insurance cost relative to the prior quarter was primarily due to
balance sheet growth, while lower salaries and employee benefits
cost was primarily due to continued headcount reduction in the
mortgage division. During the quarter, the Company sold its
wholesale mortgage business operating as LenderSelect Mortgage
Group.
Income Statement:
Net Interest Income
Net interest income was $20.4
million for the second quarter of 2023, compared to
$27.4 million for the first quarter
of 2023, and $24.1 million for the
second quarter of 2022. Relative to both the prior quarter
and year-ago periods, net interest income declined due to a lower
net interest margin resulting primarily from the aforementioned
reversal of interest income related to the specialty finance loans
moved to nonaccrual status during the second quarter of 2023, the
impact of higher interest rates on the Company's deposits and
overall funding costs, and actions taken to add balance sheet
liquidity following the market events of March 2023. Relative to the prior year
period, these developments were partially offset by an increase in
average interest-earning asset balances, and relative to both prior
periods, higher loan yields.
Total interest income was $39.0
million for the second quarter of 2023, compared to
$43.1 million for the first quarter
of 2023, and $26.2 million for the
second quarter of 2022. The decline relative to the prior quarter
reflects the aforementioned reversal of interest income related to
loans placed on nonaccrual status during the second quarter of
2023. The increase relative to the prior year reflects higher
average balances of and yields on interest-earning asset balances,
partially offset by the reversal of interest income on loans moved
to nonaccrual status during the second quarter of 2023, and lower
income from purchase accounting adjustments. The yield on average
loans held for investment, excluding PPP loans, was 5.54% for the
second quarter of 2023, compared to 6.24% for the first quarter of
2023, and 4.97% for the second quarter of 2022. The reversal of
interest income noted above had an approximate negative 75 basis
points impact on the yield on average loans held for investment,
excluding PPP loans, for the second quarter of 2023.
Total interest expense was $18.6
million for the second quarter of 2023, compared to
$15.7 million for the first quarter
of 2023, and $2.2 million for the
second 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 a shift in
the mix of average interest-bearing liabilities, primarily to
higher cost wholesale funding sources.
Average balances of interest-earning assets increased
$3.6 million, or 0.1%, to
$3.06 billion, in the second quarter
of 2023, relative to the prior quarter, and increased by
$582.0 million, or 23.5%, from the
year-ago period. Relative to the prior quarter, average
interest-earning asset balances were relatively flat, reflecting a
slight decline in average total securities and loans held for
investment balances, offset by higher average balances of loans
held for sale and interest-earning deposits in other banks.
Relative to the prior year-ago period, average interest-earning
asset balances increased due primarily to higher balances of loans
held for investment and interest-earning deposits at other banks,
partially offset by lower average securities balances.
Average balances of interest-bearing liabilities increased
$177.1 million, or 8.2%, to
$2.35 billion, in the second quarter
of 2023, relative to the prior quarter, and increased $719.3 million, or 44.2%, relative to the
year-ago period. Relative to the prior quarter, the increase
reflected higher average interest-bearing deposits, primarily
higher average wholesale time deposits, partially offset by lower
average FHLB borrowings. Relative to the prior year, the increase
reflected higher average interest-bearing deposits and higher
average FHLB borrowings.
Cost of funds was 2.49% for the second quarter of 2023, compared
to 2.11% for the first quarter of 2023, and 0.36% for the second
quarter of 2022, while cost of deposits was 2.21%, 1.74%, and
0.26%, for the same respective periods. Higher deposit costs and
overall funding costs reflect the impact of higher market interest
rates, higher average balances and related interest costs of FHLB
borrowings, and a shift in the mix of funding, including an
increase in higher cost time deposits, which includes an increase
in wholesale funding average balances and a decline in average
noninterest-bearing deposits.
Net interest margin was 2.67% for the second quarter of 2023,
compared to 3.58% for the first quarter of 2023, and 3.89% for the
second quarter of 2022. The decline in net interest margin relative
to both prior periods primarily reflects the aforementioned
reversal of interest income related to loans placed on nonaccrual
status during the second quarter of 2023, 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, excluding the reversal of interest
income.
Provision for Credit Losses
The Company recorded a provision for credit losses of
$20.5 million for the second quarter
of 2023, compared to $3.7 million for
the first quarter of 2023, and $7.5
million for the second quarter of 2022. Relative to both
prior periods, the increase in provision is primarily attributable
to specific reserves and charge-offs on the aforementioned group of
specialty finance loans.
Noninterest Income
Noninterest income was $9.7
million for the second quarter of 2023, compared to
$7.3 million for the first quarter of
2023, and $10.2 million for the
second quarter of 2022. Relative to the prior quarter, the increase
reflected higher residential mortgage banking income, primarily due
to the aforementioned fair value adjustments to MSRs, and, to a
lesser extent, higher bank and purchase card income, partially
offset by lower other noninterest income and negative fair value
adjustments of other equity investments. Relative to the year-ago
period, the decline reflected lower residential mortgage banking
income, partially offset by higher other noninterest income and
higher gain on sale of government guaranteed loans.
Noninterest Expense
Noninterest expense was $34.1
million for the second quarter of 2023, compared to
$28.8 million for the first quarter
of 2023, and $25.3 million for the
second quarter of 2022. Relative to the prior quarter and year-ago
period, the increase primarily reflects higher other contractual
services, legal, regulatory remediation, and FDIC insurance costs,
partially offset by lower salaries and employee benefits costs.
Balance Sheet:
Loans
Loans held for investment, excluding PPP loans, were
$2.45 billion at June 30, 2023, compared to $2.45 billion at March 31,
2023, and $2.05 billion at
June 30, 2022. Loan balances were
flat with the prior quarter level, while the Company selectively
replaced the amortization of balances with higher yielding loans.
The increase in loan balances relative to the year ago period
reflected the high level of growth, particularly in the second half
of 2022.
Deposits
Total deposits were $2.61 billion
at June 30, 2023, a decline of
$148.0 million, or 5.4%, from the
prior quarter-end, and an increase of $277.4
million, or 11.9%, from the year-ago period. Relative
to the prior quarter, the decrease reflected a decline in wholesale
funding, primarily time deposits, and, to a lesser extent, declines
in other deposit types. Relative to the year-ago period, the
increase reflected higher wholesale funding balances,
interest-bearing demand and money market deposits, partially offset
by lower noninterest-bearing demand deposits. Noninterest-bearing
deposits declined 3.1% and 26.7% relative to the prior quarter and
year-ago periods, respectively, and represented 22.0%, 21.5%, and
33.6% of total deposits at June 30,
2023, March 31, 2023, and
June 30, 2022, respectively. The
change from the year-ago period was primarily due to certain
fintech-related balances shifting to interest-bearing accounts.
The held for investment loan to deposit ratio was 94.1% at
June 30, 2023, compared to 89.0% at
the prior quarter-end, and 88.4% at the year-ago period-end. The
increase on a linked quarter basis was due primarily to lower
wholesale funding at second quarter-end 2023, while the increase
from the year-ago period end was due to second half 2022 loan
growth.
Fintech Business:
Interest and fee income related to fintech partnerships
represented approximately $3.4
million, $2.9 million, and
$1.8 million of total revenue for the
Company for the second quarter of 2023, the first quarter of 2023,
and the second quarter of 2022, respectively.
Deposits related to fintech relationships were $708 million at June 30,
2023, compared to $716 million
at the prior quarter-end. These deposits represented 27.1% of total
deposits at June 30, 2023, compared
to 25.9% of total deposits at the prior quarter-end. Included in
deposits related to fintech relationships were assets managed by
BRB Financial Group's trust division of $37.2 million as of June
30, 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 three and six months ended June 30,
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 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.
Blue Ridge Bankshares, Inc.
|
|
|
|
|
|
|
Consolidated Statements of Income
(unaudited)
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
(Dollars in thousands, except per common share
data)
|
|
June 30, 2023
|
|
March 31, 2023
|
|
June 30, 2022
|
Interest income:
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
34,839
|
|
$
39,294
|
|
$
23,787
|
Interest on taxable
securities
|
|
2,543
|
|
2,628
|
|
2,129
|
Interest on nontaxable
securities
|
|
94
|
|
92
|
|
89
|
Interest on deposit
accounts and federal funds sold
|
|
1,497
|
|
1,039
|
|
238
|
Total interest income
|
|
38,973
|
|
43,053
|
|
26,243
|
Interest expense:
|
|
|
|
|
|
|
Interest on
deposits
|
|
14,624
|
|
11,331
|
|
1,541
|
Interest on
subordinated notes
|
|
547
|
|
553
|
|
545
|
Interest on FHLB and
FRB borrowings
|
|
3,399
|
|
3,810
|
|
67
|
Total interest expense
|
|
18,570
|
|
15,694
|
|
2,153
|
Net interest income
|
|
20,403
|
|
27,359
|
|
24,090
|
Provision for credit
losses - loans
|
|
21,100
|
|
4,100
|
|
7,494
|
Provision for credit
losses - unfunded commitments
|
|
(600)
|
|
(400)
|
|
—
|
Total provision for
credit losses
|
|
20,500
|
|
3,700
|
|
7,494
|
Net interest income after provision for credit
losses
|
|
(97)
|
|
23,659
|
|
16,596
|
Noninterest income:
|
|
|
|
|
|
|
Fair value adjustments
of other equity investments
|
|
(281)
|
|
(51)
|
|
(86)
|
Residential mortgage
banking income, including MSRs
|
|
4,295
|
|
1,303
|
|
5,960
|
Gain on sale of
government guaranteed loans
|
|
2,384
|
|
2,409
|
|
1,538
|
Wealth and trust
management
|
|
462
|
|
432
|
|
414
|
Service charges on
deposit accounts
|
|
349
|
|
343
|
|
327
|
Increase in cash
surrender value of BOLI
|
|
292
|
|
282
|
|
276
|
Bank and purchase card,
net
|
|
560
|
|
340
|
|
599
|
Other
|
|
1,675
|
|
2,225
|
|
1,162
|
Total noninterest income
|
|
9,736
|
|
7,283
|
|
10,190
|
Noninterest expense:
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
14,518
|
|
15,289
|
|
15,873
|
Occupancy and
equipment
|
|
1,913
|
|
1,569
|
|
1,500
|
Data
processing
|
|
1,131
|
|
1,346
|
|
874
|
Legal
|
|
2,753
|
|
1,234
|
|
618
|
Advertising and
marketing
|
|
337
|
|
286
|
|
412
|
Communications
|
|
1,171
|
|
1,131
|
|
1,030
|
Audit and accounting
fees
|
|
503
|
|
146
|
|
379
|
FDIC
insurance
|
|
1,246
|
|
729
|
|
106
|
Intangible
amortization
|
|
335
|
|
355
|
|
386
|
Other contractual
services
|
|
3,218
|
|
939
|
|
999
|
Other taxes and
assessments
|
|
803
|
|
802
|
|
671
|
Regulatory
remediation
|
|
2,388
|
|
1,134
|
|
—
|
Other
|
|
3,736
|
|
3,887
|
|
2,478
|
Total noninterest expense
|
|
34,052
|
|
28,847
|
|
25,326
|
(Loss) income before income tax
|
|
(24,413)
|
|
2,095
|
|
1,460
|
Income tax (benefit)
expense
|
|
(4,949)
|
|
491
|
|
342
|
Net (loss) income
|
|
(19,464)
|
|
1,604
|
|
1,118
|
Basic and diluted (loss) earnings per common
share
|
|
$
(1.03)
|
|
$
0.09
|
|
$
0.06
|
Blue Ridge Bankshares, Inc.
|
|
|
|
|
Consolidated Statements of Income
(unaudited)
|
|
|
|
|
|
|
For the Six Months Ended
|
(Dollars in thousands except per share
data)
|
|
June 30, 2023
|
|
June 30, 2022
|
Interest income:
|
|
|
|
|
Interest and fees on
loans
|
|
$
74,133
|
|
$
47,686
|
Interest on taxable
securities
|
|
5,171
|
|
3,899
|
Interest on nontaxable
securities
|
|
186
|
|
164
|
Interest on deposit
accounts and federal funds sold
|
|
2,536
|
|
296
|
Total interest income
|
|
82,026
|
|
52,045
|
Interest expense:
|
|
|
|
|
Interest on
deposits
|
|
25,955
|
|
3,097
|
Interest on
subordinated notes
|
|
1,100
|
|
1,098
|
Interest on FHLB and
FRB borrowings
|
|
7,209
|
|
92
|
Total interest expense
|
|
34,264
|
|
4,287
|
Net interest income
|
|
47,762
|
|
47,758
|
Provision for credit
losses - loans
|
|
25,200
|
|
9,994
|
Provision for credit
losses - unfunded commitments
|
|
(1,000)
|
|
—
|
Total provision for
credit losses
|
|
24,200
|
|
9,994
|
Net interest income after provision for credit
losses
|
|
23,562
|
|
37,764
|
Noninterest income:
|
|
|
|
|
Fair value adjustments
of other equity investments
|
|
(332)
|
|
9,278
|
Residential mortgage
banking income, including MSRs
|
|
5,598
|
|
15,519
|
Gain on sale of
government guaranteed loans
|
|
4,793
|
|
2,965
|
Wealth and trust
management
|
|
894
|
|
805
|
Service charges on
deposit accounts
|
|
692
|
|
642
|
Increase in cash
surrender value of BOLI
|
|
574
|
|
548
|
Bank and purchase card,
net
|
|
900
|
|
1,021
|
Other
|
|
3,900
|
|
3,506
|
Total noninterest income
|
|
17,019
|
|
34,284
|
Noninterest expense:
|
|
|
|
|
Salaries and employee
benefits
|
|
29,807
|
|
29,969
|
Occupancy and
equipment
|
|
3,482
|
|
2,985
|
Data
processing
|
|
2,477
|
|
1,820
|
Legal
|
|
3,987
|
|
1,000
|
Advertising and
marketing
|
|
623
|
|
840
|
Communications
|
|
2,302
|
|
1,829
|
Audit and accounting
fees
|
|
649
|
|
520
|
FDIC
insurance
|
|
1,975
|
|
337
|
Intangible
amortization
|
|
690
|
|
783
|
Other contractual
services
|
|
4,157
|
|
1,533
|
Other taxes and
assessments
|
|
1,605
|
|
1,241
|
Regulatory
remediation
|
|
3,522
|
|
—
|
Merger-related
|
|
—
|
|
50
|
Other
|
|
7,623
|
|
5,108
|
Total noninterest expense
|
|
62,899
|
|
48,015
|
(Loss) income from continuing operations before
income tax
|
|
(22,318)
|
|
24,033
|
Income tax (benefit)
expense
|
|
(4,458)
|
|
5,495
|
Net (loss) income from continuing
operations
|
|
$
(17,860)
|
|
$
18,538
|
Discontinued operations:
|
|
|
|
|
Income from
discontinued operations before income taxes (including gain on
disposal of $471 thousand for the six months ended June 30,
2022)
|
|
—
|
|
426
|
Income tax
expense
|
|
—
|
|
89
|
Net income from discontinued
operations
|
|
$
—
|
|
$
337
|
Net (loss) income
|
|
$
(17,860)
|
|
$
18,875
|
Net income from discontinued operations attributable
to noncontrolling interest
|
|
—
|
|
(1)
|
Net (loss) income attributable to Blue Ridge
Bankshares, Inc.
|
|
$
(17,860)
|
|
$
18,874
|
Net (loss) income available to common
stockholders
|
|
$
(17,860)
|
|
$
18,874
|
Basic and diluted (loss) earnings per common share
from continuing operations
|
|
$
(0.95)
|
|
$
0.99
|
Basic and diluted (loss) earnings per common share
from discontinued operations
|
|
$
—
|
|
$
0.02
|
Basic and diluted (loss) earnings per common share
attributable to Blue Ridge Bankshares, Inc.
|
|
$
(0.95)
|
|
$
1.01
|
Blue Ridge Bankshares, Inc.
|
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
|
(Dollars in thousands, except share
data)
|
|
(unaudited)
June 30, 2023
|
|
December 31,
2022 (1)
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
131,843
|
|
$
77,274
|
Federal funds
sold
|
|
2,492
|
|
1,426
|
Securities available
for sale, at fair value
|
|
340,617
|
|
354,341
|
Restricted equity
investments
|
|
17,538
|
|
21,257
|
Other equity
investments
|
|
22,693
|
|
23,776
|
Other
investments
|
|
27,157
|
|
24,672
|
Loans held for
sale
|
|
64,102
|
|
69,534
|
Paycheck Protection
Program loans, net of deferred fees and costs
|
|
7,234
|
|
11,967
|
Loans held for
investment, net of deferred fees and costs
|
|
2,451,697
|
|
2,399,092
|
Less: allowance for
credit losses
|
|
(43,067)
|
|
(22,939)
|
Loans held for
investment, net
|
|
2,408,630
|
|
2,376,153
|
Accrued interest
receivable
|
|
15,474
|
|
12,393
|
Other real estate
owned
|
|
—
|
|
195
|
Premises and equipment,
net
|
|
22,849
|
|
23,152
|
Right-of-use
asset
|
|
5,744
|
|
6,903
|
Bank owned life
insurance
|
|
47,828
|
|
47,245
|
Goodwill
|
|
26,826
|
|
26,826
|
Other intangible
assets
|
|
5,925
|
|
6,583
|
Mortgage servicing
rights, net
|
|
28,246
|
|
28,991
|
Deferred tax asset,
net
|
|
11,051
|
|
9,182
|
Other assets
|
|
28,175
|
|
19,175
|
Total assets
|
|
$
3,214,424
|
|
$
3,141,045
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
demand
|
|
$
575,989
|
|
$
640,101
|
Interest-bearing demand
and money market deposits
|
|
1,293,754
|
|
1,318,799
|
Savings
|
|
131,332
|
|
151,646
|
Time
deposits
|
|
612,019
|
|
391,961
|
Total
deposits
|
|
2,613,094
|
|
2,502,507
|
FHLB
borrowings
|
|
219,100
|
|
311,700
|
FRB
borrowings
|
|
65,000
|
|
51
|
Subordinated notes,
net
|
|
39,888
|
|
39,920
|
Lease
liability
|
|
6,765
|
|
7,860
|
Other
liabilities
|
|
39,306
|
|
19,634
|
Total
liabilities
|
|
2,983,153
|
|
2,881,672
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock, no par
value; 50,000,000 shares authorized at June 30,
2023 and December 31, 2022; 18,933,637 and 18,950,329 shares
issued and outstanding at June 30, 2023 and December 31, 2022,
respectively
|
|
196,990
|
|
195,960
|
Additional paid-in
capital
|
|
252
|
|
252
|
Retained
earnings
|
|
80,287
|
|
108,262
|
Accumulated other
comprehensive loss, net of tax
|
|
(46,258)
|
|
(45,101)
|
Total stockholders'
equity
|
|
231,271
|
|
259,373
|
Total liabilities and
stockholders' equity
|
|
$
3,214,424
|
|
$
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)
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
Income Statement Data:
|
|
2023
|
|
2023
|
|
2022
|
|
2022
|
|
2022
|
Interest
income
|
|
$
38,973
|
|
$
43,053
|
|
$
42,285
|
|
$
33,146
|
|
$
26,243
|
Interest
expense
|
|
18,570
|
|
15,694
|
|
8,329
|
|
4,469
|
|
2,153
|
Net interest
income
|
|
20,403
|
|
27,359
|
|
33,956
|
|
28,677
|
|
24,090
|
Provision for credit
losses
|
|
20,500
|
|
3,700
|
|
3,992
|
|
3,900
|
|
7,494
|
Net interest income
after provision for credit losses
|
|
(97)
|
|
23,659
|
|
29,964
|
|
24,777
|
|
16,596
|
Noninterest
income
|
|
9,736
|
|
7,283
|
|
5,840
|
|
7,968
|
|
10,190
|
Noninterest
expenses
|
|
34,052
|
|
28,847
|
|
27,552
|
|
29,208
|
|
25,326
|
(Loss) income before
income taxes
|
|
(24,413)
|
|
2,095
|
|
8,252
|
|
3,537
|
|
1,460
|
Income tax (benefit)
expense
|
|
(4,949)
|
|
491
|
|
1,948
|
|
801
|
|
342
|
Net (loss)
income
|
|
$
(19,464)
|
|
$
1,604
|
|
$
6,304
|
|
$
2,736
|
|
$
1,118
|
Per Common Share Data:
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share - basic and diluted
|
|
$
(1.03)
|
|
$
0.09
|
|
$
0.33
|
|
$
0.15
|
|
$
0.06
|
Dividends declared per
common share
|
|
—
|
|
0.1225
|
|
0.1225
|
|
0.1225
|
|
0.1225
|
Book value per common
share
|
|
12.21
|
|
13.60
|
|
13.69
|
|
13.22
|
|
13.95
|
Tangible book value per
common share - Non-GAAP
|
|
10.55
|
|
11.93
|
|
12.00
|
|
11.51
|
|
12.21
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
3,214,424
|
|
$
3,334,911
|
|
$
3,141,045
|
|
$
2,881,451
|
|
$
2,799,643
|
Average
assets
|
|
3,277,282
|
|
3,270,110
|
|
3,020,371
|
|
2,903,447
|
|
2,646,874
|
Average
interest-earning assets
|
|
3,064,103
|
|
3,060,534
|
|
2,812,898
|
|
2,686,376
|
|
2,482,065
|
Loans held for
investment (including PPP loans)
|
|
2,458,931
|
|
2,456,980
|
|
2,411,059
|
|
2,171,490
|
|
2,064,037
|
Loans held for
investment (excluding PPP loans)
|
|
2,451,697
|
|
2,448,992
|
|
2,399,092
|
|
2,158,342
|
|
2,048,383
|
Allowance for credit
losses
|
|
43,067
|
|
29,974
|
|
22,939
|
|
20,534
|
|
17,242
|
Purchase accounting
adjustments (discounts) on acquired loans
|
|
6,381
|
|
6,724
|
|
7,872
|
|
10,373
|
|
12,192
|
Loans held for
sale
|
|
64,102
|
|
76,528
|
|
69,534
|
|
25,800
|
|
32,759
|
Securities available
for sale, at fair value
|
|
340,617
|
|
351,990
|
|
354,341
|
|
359,516
|
|
381,536
|
Noninterest-bearing
demand deposits
|
|
575,989
|
|
594,518
|
|
640,101
|
|
787,514
|
|
785,743
|
Total
deposits
|
|
2,613,094
|
|
2,761,047
|
|
2,502,507
|
|
2,409,486
|
|
2,335,707
|
Subordinated notes,
net
|
|
39,888
|
|
39,904
|
|
39,920
|
|
39,937
|
|
39,953
|
FHLB and FRB
advances
|
|
284,100
|
|
239,100
|
|
311,751
|
|
150,155
|
|
135,060
|
Average
interest-bearing liabilities
|
|
2,346,722
|
|
2,169,643
|
|
1,777,391
|
|
1,771,246
|
|
1,627,423
|
Total stockholders'
equity
|
|
231,271
|
|
257,586
|
|
259,373
|
|
250,502
|
|
261,660
|
Average stockholders'
equity
|
|
257,117
|
|
259,911
|
|
263,826
|
|
267,057
|
|
284,913
|
Weighted average common
shares outstanding - basic
|
|
18,851
|
|
18,856
|
|
18,857
|
|
18,849
|
|
18,767
|
Weighted average common
shares outstanding - diluted
|
|
18,851
|
|
18,860
|
|
18,863
|
|
18,860
|
|
18,778
|
Financial Ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
-2.38 %
|
|
0.20 %
|
|
0.83 %
|
|
0.38 %
|
|
0.17 %
|
Return on average
equity (1)
|
|
-30.28 %
|
|
2.47 %
|
|
9.56 %
|
|
4.10 %
|
|
1.57 %
|
Total loan to deposit
ratio
|
|
96.6 %
|
|
91.8 %
|
|
99.1 %
|
|
91.2 %
|
|
89.8 %
|
Held for investment
loan to deposit ratio
|
|
94.1 %
|
|
89.0 %
|
|
96.3 %
|
|
90.1 %
|
|
88.4 %
|
Net interest margin
(1)
|
|
2.67 %
|
|
3.58 %
|
|
4.83 %
|
|
4.27 %
|
|
3.89 %
|
Cost of deposits
(1)
|
|
2.21 %
|
|
1.74 %
|
|
0.85 %
|
|
0.50 %
|
|
0.26 %
|
Cost of funds
(1)
|
|
2.49 %
|
|
2.11 %
|
|
1.22 %
|
|
0.69 %
|
|
0.36 %
|
Efficiency
ratio
|
|
113.0 %
|
|
83.3 %
|
|
69.2 %
|
|
79.7 %
|
|
73.9 %
|
Regulatory remediation
expenses
|
|
2,388
|
|
1,134
|
|
2,884
|
|
4,025
|
|
510
|
Capital and Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity to average assets
|
|
7.8 %
|
|
7.9 %
|
|
8.7 %
|
|
9.2 %
|
|
10.8 %
|
Allowance for credit
losses to loans held for investment, excluding
PPP loans
|
|
1.76 %
|
|
1.22 %
|
|
0.96 %
|
|
0.95 %
|
|
0.84 %
|
Nonperforming loans to
total assets
|
|
2.68 %
|
|
0.92 %
|
|
0.59 %
|
|
0.35 %
|
|
0.44 %
|
Nonperforming assets to
total assets
|
|
2.68 %
|
|
0.92 %
|
|
0.60 %
|
|
0.36 %
|
|
0.44 %
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity:
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
$
231,271
|
|
$
257,586
|
|
$
259,373
|
|
$
250,502
|
|
$
261,660
|
Less: Goodwill and
other intangibles, net of deferred tax liability (2)
|
|
(31,427)
|
|
(31,637)
|
|
(32,027)
|
|
(32,369)
|
|
(32,632)
|
Tangible common equity
(Non-GAAP)
|
|
$
199,844
|
|
$
225,949
|
|
$
227,346
|
|
$
218,133
|
|
$
229,028
|
Total shares
outstanding
|
|
18,934
|
|
18,942
|
|
18,950
|
|
18,946
|
|
18,762
|
Book value per common
share
|
|
$
12.21
|
|
$
13.60
|
|
$
13.69
|
|
$
13.22
|
|
$
13.95
|
Tangible book value per
common share (Non-GAAP)
|
|
10.55
|
|
11.93
|
|
12.00
|
|
11.51
|
|
12.21
|
|
|
|
|
|
|
|
|
|
|
|
Tangible stockholders' equity to tangible total
assets
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
3,214,424
|
|
$
3,334,911
|
|
$
3,141,045
|
|
$
2,881,451
|
|
$
2,799,643
|
Less: Goodwill and
other intangibles, net of deferred tax liability (2)
|
|
(31,427)
|
|
(31,637)
|
|
(32,027)
|
|
(32,369)
|
|
(32,632)
|
Tangible total assets
(Non-GAAP)
|
|
$
3,182,997
|
|
$
3,303,274
|
|
$
3,109,018
|
|
$
2,849,082
|
|
$
2,767,011
|
Tangible common equity
(Non-GAAP)
|
|
$
199,844
|
|
$
225,949
|
|
$
227,346
|
|
$
218,133
|
|
$
229,028
|
Tangible stockholders'
equity to tangible total assets (Non-GAAP)
|
|
6.3 %
|
|
6.8 %
|
|
7.3 %
|
|
7.7 %
|
|
8.3 %
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Annualized.
|
|
|
|
|
|
|
|
|
|
|
(2) Excludes mortgage
servicing rights.
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Blue Ridge Bankshares, Inc.