Blue Ridge Bankshares Swings to Profit, Shrinks Balance Sheet

Ticker: BRBS · Form: 10-Q · Filed: Nov 4, 2025 · CIK: 842717

Sentiment: mixed

Topics: Regional Banking, Financial Performance, Regulatory Compliance, Share Repurchase, Asset Reduction, Deposit Trends, Fintech Risk

Related Tickers: BRBS

TL;DR

**BRBS is cleaning house and turning a profit, but regulatory overhang remains a concern.**

AI Summary

BLUE RIDGE BANKSHARES, INC. reported a significant turnaround in net income for the nine months ended September 30, 2025, reaching $6.465 million, a substantial improvement from a net loss of $13.382 million in the same period of 2024. For the three months ended September 30, 2025, net income was $5.603 million, up from $0.946 million in Q3 2024. Total assets decreased to $2.497 billion as of September 30, 2025, from $2.737 billion at December 31, 2024, primarily due to a reduction in loans held for investment, net, from $2.089 billion to $1.892 billion. Total deposits also declined from $2.179 billion to $1.951 billion. The company initiated a $15.0 million share repurchase program on August 25, 2025, and repurchased 659,949 shares for $2.8 million during Q3 2025. Key business changes include the sale of its mortgage division, Monarch Mortgage, on March 27, 2025, resulting in a $0.2 million loss. Regulatory risks persist with an OCC Consent Order from January 24, 2024, requiring enhanced controls for fintech partnerships and specific capital ratios, which the Bank currently exceeds with a leverage ratio of 10.0% and a total capital ratio of 13.0%.

Why It Matters

This filing reveals a strategic shift for Blue Ridge Bankshares, moving from a significant loss to profitability, which is crucial for investor confidence. The reduction in total assets and deposits, alongside a decrease in loans held for investment, suggests a deleveraging strategy, potentially to de-risk the balance sheet and improve capital efficiency. The share repurchase program signals management's belief in the company's undervaluation and could provide support for the stock price. However, the ongoing OCC Consent Order highlights persistent regulatory scrutiny, which could impact future growth and operational flexibility, especially in its fintech partnerships, a competitive area for regional banks.

Risk Assessment

Risk Level: medium — The company faces medium risk due to ongoing regulatory scrutiny from the OCC Consent Order, which requires enhanced controls and specific capital ratios. While the Bank currently exceeds the minimum capital ratios of 10.0% leverage and 13.0% total capital, failure to fully comply with other directives could lead to further penalties or operational restrictions. Additionally, the significant decrease in total assets by $240.311 million and total deposits by $228.363 million from December 31, 2024, to September 30, 2025, indicates a shrinking balance sheet, which could impact future revenue growth.

Analyst Insight

Investors should monitor BRBS's progress on the OCC Consent Order and its ability to stabilize its deposit base and loan portfolio. The share repurchase program is a positive signal, but the shrinking balance sheet warrants caution. Consider holding if already invested, but new investors might wait for clearer signs of sustained growth and full regulatory compliance before initiating a position.

Financial Highlights

total Assets
$2.497B
net Income
$6.465M
eps
$0.06

Key Numbers

Key Players & Entities

FAQ

What were Blue Ridge Bankshares' net income and revenue trends for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, Blue Ridge Bankshares reported a net income of $6.465 million, a substantial improvement from a net loss of $13.382 million in the same period of 2024. Total interest income decreased to $106.299 million from $122.387 million, while total interest expense also decreased to $45.557 million from $62.852 million, resulting in a net interest income of $60.742 million, up from $59.535 million.

How has Blue Ridge Bankshares' asset base changed between December 31, 2024, and September 30, 2025?

Blue Ridge Bankshares' total assets decreased from $2.737 billion as of December 31, 2024, to $2.497 billion as of September 30, 2025. This $240.311 million reduction was primarily driven by a decrease in loans held for investment, net, from $2.089 billion to $1.892 billion, and a decrease in cash and due from banks from $173.533 million to $121.032 million.

What is the status of the OCC Consent Order for Blue Ridge Bankshares?

The Bank entered into a consent order with the Office of the Comptroller of the Currency (OCC) on January 24, 2024. This order requires the Bank to enhance controls for assessing and managing third-party, Bank Secrecy Act/Anti-Money Laundering, and information technology risks from its fintech partnerships. It also mandates minimum capital ratios of 10.0% leverage and 13.0% total capital, which the Bank exceeded as of September 30, 2025, and December 31, 2024.

What strategic actions has Blue Ridge Bankshares taken regarding its common stock?

On August 25, 2025, Blue Ridge Bankshares announced a share repurchase program authorizing the purchase of up to $15.0 million of its common stock. During the three months ended September 30, 2025, the Company repurchased 659,949 shares at a weighted average price of $4.16 per share, totaling $2.8 million. Additionally, 3,903,000 warrants to purchase common stock were exercised during the nine months ended September 30, 2025.

Did Blue Ridge Bankshares sell any major business divisions recently?

Yes, on March 27, 2025, Blue Ridge Bankshares completed the sale of its mortgage division, operating as Monarch Mortgage. This transaction involved the transfer of certain assets and leases to an unrelated mortgage company and resulted in a $0.2 million loss, which was reported in other noninterest income.

How have Blue Ridge Bankshares' deposits changed over the past nine months?

Total deposits for Blue Ridge Bankshares decreased from $2.179 billion at December 31, 2024, to $1.951 billion at September 30, 2025. This decline was primarily driven by a decrease in time deposits from $1.027 billion to $818.411 million and noninterest-bearing demand deposits from $452.690 million to $411.100 million.

What was the basic and diluted income (loss) per common share for Blue Ridge Bankshares for Q3 2025?

For the three months ended September 30, 2025, Blue Ridge Bankshares reported basic and diluted income per common share of $0.06. This is an increase from the $0.01 income per common share reported for the same period in 2024.

What is the current number of outstanding common shares for Blue Ridge Bankshares?

As of October 31, 2025, Blue Ridge Bankshares had 91,488,661 shares of common stock, no par value per share, outstanding. This is an increase from 84,972,610 shares issued and outstanding at December 31, 2024.

How has Blue Ridge Bankshares' noninterest expense trended?

Total noninterest expense for Blue Ridge Bankshares decreased significantly for both the three and nine months ended September 30, 2025. For the three months, it fell to $20.041 million from $26.454 million in 2024. For the nine months, it decreased to $65.001 million from $88.199 million in 2024, reflecting reductions in salaries and employee benefits, FDIC insurance, and other contractual services.

What are the remaining exercise terms for Blue Ridge Bankshares' outstanding warrants?

As of September 30, 2025, the warrants issued on April 3, 2024, have a remaining exercise term of 3.51 years, with 25,124,999 warrants outstanding. The warrants issued on June 13, 2024, have a remaining exercise term of 3.70 years, with 2,424,000 warrants outstanding.

Risk Factors

Industry Context

The banking industry is navigating a complex environment characterized by evolving regulatory landscapes and strategic adjustments. Companies are increasingly evaluating their business lines, as evidenced by Blue Ridge Bankshares' sale of its mortgage division. Maintaining strong capital ratios remains paramount, especially for institutions under regulatory scrutiny.

Regulatory Implications

Blue Ridge Bankshares operates under an OCC Consent Order, necessitating strict adherence to enhanced controls for fintech partnerships and specific capital ratio requirements. While currently compliant with its 10.0% leverage ratio and 13.0% total capital ratio, ongoing regulatory oversight requires continuous monitoring and robust risk management.

What Investors Should Do

  1. Monitor compliance with the OCC Consent Order.
  2. Evaluate the impact of the mortgage division sale.
  3. Observe the execution of the share repurchase program.

Key Dates

Glossary

Leverage Ratio
A measure of a bank's capital adequacy, calculated as Tier 1 capital divided by average total assets. It indicates the bank's ability to absorb losses. (The company's leverage ratio of 10.0% meets the requirements of the OCC Consent Order, demonstrating a baseline level of financial stability.)
Total Capital Ratio
A measure of a bank's capital adequacy, calculated as total capital (Tier 1 and Tier 2) divided by risk-weighted assets. It reflects a bank's overall financial strength. (The company's total capital ratio of 13.0% meets the requirements of the OCC Consent Order, indicating sufficient capital reserves against potential risks.)
Monarch Mortgage
The former mortgage division of Blue Ridge Bankshares, Inc. that was sold on March 27, 2025. (The sale of this division resulted in a $0.2 million loss and represents a strategic change in the company's business operations.)

Year-Over-Year Comparison

Blue Ridge Bankshares has demonstrated a significant financial turnaround, swinging from a $13.382 million net loss in the first nine months of 2024 to a $6.465 million net income in the same period of 2025. This improvement is accompanied by a contraction in total assets, loans, and deposits, suggesting a strategic balance sheet adjustment. The company also initiated a share repurchase program, signaling confidence, while continuing to manage risks associated with a prior OCC Consent Order.

Filing Stats: 4,399 words · 18 min read · ~15 pages · Grade level 18.4 · Accepted 2025-11-04 17:01:19

Filing Documents

Financial Statements

Financial Statements 3 Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 3 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited) 4 Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024 (unaudited) 5 Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 (unaudited) 6 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited) 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 54 Item 4.

Controls and Procedures

Controls and Procedures 54 PART II OTHER INFORMATION 56 Item 1.

Legal Proceedings

Legal Proceedings 56 Item 1A.

Risk Factors

Risk Factors 56 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 56 Item 3. Defaults Upon Senior Securities 56 Item 4. Mine Safety Disclosures 56 Item 5. Other Information 56 Item 6. Exhibits 57

FINAN CIAL INFORMATION

PART I. FINAN CIAL INFORMATION

Financi al Statements

Item 1. Financi al Statements Blue Ridge Bankshares, Inc. Consolidated B alance Sheets (unaudited) (Dollars in thousands except share and per share data) September 30, 2025 December 31, 2024 (1) ASSETS Cash and due from banks $ 121,032 $ 173,533 Restricted cash — 2,459 Federal funds sold 7,773 838 Securities available for sale, at fair value 341,354 312,035 Restricted equity investments 18,988 19,275 Other equity investments 4,853 4,834 Other investments 20,804 19,405 Loans held for sale 12,819 30,976 Loans held for investment, net of deferred fees and costs 1,912,726 2,111,797 Less: allowance for credit losses ( 20,503 ) ( 23,023 ) Loans held for investment, net 1,892,223 2,088,774 Accrued interest receivable 11,012 12,537 Premises and equipment, net 21,087 21,394 Right-of-use asset 6,927 7,962 Other intangible assets 2,941 3,859 Deferred tax asset, net 24,171 27,312 Other assets 10,965 12,067 Total assets $ 2,496,949 $ 2,737,260 LIABILITIES & STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing demand $ 411,100 $ 452,690 Interest-bearing demand and money market 621,268 598,875 Savings 100,300 100,857 Time 818,411 1,027,020 Total deposits 1,951,079 2,179,442 FHLB borrowings 150,000 150,000 Subordinated notes, net 14,731 39,789 Lease liabilities 7,580 8,613 Other liabilities 18,054 31,628 Total liabilities 2,141,444 2,409,472 Commitments and contingencies (Note 7) Stockholders' Equity: Common stock, no par value; 150,000,000 shares authorized at September 30, 2025 and December 31, 2024, respectively; and 91,636,533 and 84,972,610 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 333,356 322,791 Additional paid-in capital 29,687 29,687 Retained earnings 24,237 17,772 Accumulated other comprehensive loss, net o

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1 – Organization and Basis of Presentation Blue Ridge Bankshares, Inc. (the "Company") conducts its business activities primarily through its wholly-owned subsidiary bank, Blue Ridge Bank, National Association (the "Bank") and its wealth and trust management subsidiary, BRB Financial Group, Inc. (the "Financial Group"). The Company exists primarily for the purposes of holding the stock of its subsidiaries, the Bank and the Financial Group. The accompanying unaudited consolidated financial statements of the Company include the accounts of the Bank and the Financial Group and were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and general practices within the banking industry. All significant intercompany balances and transactions have been eliminated in consolidation. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). The Company's significant accounting policies are disclosed in Note 2 of the audited financial statements for the year ended December 31, 2024 included in the 2024 Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2024. Certain amounts presented in the consolidated financial statements of prior periods have been reclassified to conform to current year presentations. The reclassifications had no effect on net income, net income per share, total assets, total liabilities, or stockholders' equity as previously reported. Share Repurchase Program On August 25, 2025, the Company announced the adoption of a share repurchase program (the "Repurchase Program") pursuant to which the Company may purchase up to $ 15.0 million of the Company's common sto

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