Blue Ridge Bankshares, Inc. Announces Fourth Quarter and Full Year 2022 Results

$BRBS
Major Banks
Finance
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CHARLOTTESVILLE, Va., Feb. 2, 2023 /PRNewswire/ -- Blue Ridge Bankshares, Inc. (the "Company") (NYSE: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 and full year ended December 31, 2022. 

For the fourth quarter of 2022, the Company reported net income from continuing operations of $6.3 million, or $0.33 earnings per diluted common share, compared to $2.7 million, or $0.15 earnings per diluted common share, for the third quarter of 2022, and $12.8 million, or $0.68 earnings per diluted common share, for the fourth quarter of 2021.  

For the year ended December 31, 2022, the Company reported net income from continuing operations of $27.6 million, or $1.47 earnings per diluted common share, compared to $52.6 million, or $2.95 earnings per diluted common share, for 2021.

"Our team had both a productive and challenging year," said Brian K. Plum, President and Chief Executive Officer of the Company. "We saw meaningful success and growth in our commercial banking efforts, and at the same time we appreciate the need to improve our fintech division operations, practices, and procedures to conform to the formal written agreement entered into with the Office of the Comptroller of the Currency. We are committed to doing the things necessary to rise to this challenge and lay the groundwork for future success."

"We announced in early January that Kirsten Muetzel has been named President of Blue Ridge Bank's Fintech Division," Plum continued. "Kirsten's background as a banking regulator, fintech executive, and bank consultant is perfectly suited for her new responsibilities overseeing our fintech division, managing a portfolio of partners, strengthening regulatory compliance, and working to advance our fintech strategy."

Plum added, "As we look ahead to 2023, we are preparing for a macroeconomic environment with credit pressure and increasing funding costs. We are emphasizing credit discipline and have calibrated incentive plans to further reward noninterest deposit growth.  We continue driving efforts to increase noninterest income to supplement net interest margin compression from the industry's expected rising funding costs."

Key highlights for the fourth quarter:

  • Update on formal written agreement; Regulatory remediation costs decline
    • 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 furnished in a 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 is actively working to bring the Bank's fintech policies, procedures, and operations into conformity with OCC directives and believes its work to date has been delivered on schedule.
    • Remediation costs related to regulatory matters were $2.9 million for the fourth quarter of 2022, compared to $4.0 million for the third quarter of 2022, and $0 for the fourth quarter of 2021.
  • Balance sheet growth and net interest margin expansion drive higher net interest income
    • Net interest income was $34.0 million for the fourth quarter of 2022, an increase of $5.3 million, or 18.4%, from the third quarter of 2022, and $13.1 million, or 62.6%, from the fourth quarter of 2021.
      • Purchase accounting adjustments ("PAA"), attributable primarily to the Company's 2021 merger with Bay Banks of Virginia, Inc., added $2.9 million to net interest income for the fourth quarter of 2022, compared to $1.1 million for the third quarter of 2022, and $1.5 million for the fourth quarter of 2021. The beneficial effect of PAA is likely to decline in 2023 from 2022 levels.
    • Loans held for investment, excluding Paycheck Protection Program ("PPP") loans, were $2.40 billion at December 31, 2022, an increase of $240.8 million, or 11.2%, from September 30, 2022, and $621.9 million, or 35.0%, from December 31, 2021. Loan growth as compared with the prior quarter and year-ago periods was mostly driven equally between the Company's investment in its government guaranteed, middle market, and specialized lending teams and its traditional core banking markets.
    • Deposits were $2.50 billion at December 31, 2022, an increase of $93.0 million, or 3.9%, from September 30, 2022, and $204.7 million, or 8.9%, from December 31, 2021. Deposit growth on a linked quarter basis was primarily driven by interest-bearing demand and money market deposits, partially offset by lower noninterest-bearing demand deposit balances. Deposit growth on a year-over-year basis was driven almost entirely by interest-bearing demand and money market deposits, partially offset by lower time deposit and noninterest-bearing demand deposit balances.
      • Deposits related to fintech relationships were approximately $690 million as of December 31, 2022, an increase of $161 million, or 30.0%, from September 30, 2022, and $501 million, or 265.1%, from December 31, 2021. Deposits related to fintech relationships represented 27.6% of total deposits at December 31, 2022, compared to 22.0% at September 30, 2022, and 8.2% at December 31, 2021. During the 2022 periods, there was a notable shift in the mix of fintech deposits (to interest-bearing from noninterest-bearing), as certain of the Company's fintech partners sought to optimize profitability amidst a more challenging operating environment.
    • Net interest margin was 4.83% for the fourth quarter of 2022, compared to 4.27% for the third quarter of 2022, and 3.39% for the fourth quarter of 2021. Net interest margin expansion during the fourth quarter of 2022, relative to both prior periods, reflected strong loan growth, higher loan and other interest-earning asset yields, a positive shift in the mix of interest-earning assets, and favorable PAA, partially offset by higher funding costs. 
      • PAA added 41 basis points, 17 basis points, and 24 basis points to net interest margin for the fourth quarter of 2022, third quarter of 2022, and fourth quarter of 2021, respectively. 
  • Credit and capital stability provide stable foundation; Value creation through strong growth in tangible book value per share
    • Nonperforming loans, which include nonaccrual loans and loans 90 days or more past due and accruing interest1, totaled $18.6 million, representing 0.59% of total assets, at December 31, 2022, compared to $10.1 million, representing 0.35% of total assets, at September 30, 2022, and $16.1 million, representing 0.60% of total assets at December 31, 2021.
    • The Company recorded a provision for loan losses of $4.0 million for the fourth quarter of 2022, compared to $3.9 million for the third quarter of 2022, and $0.1 million for the fourth quarter of 2021. Provision for the fourth quarter of 2022 was primarily attributable to loan growth and specific reserves for impaired loans.
    • The Company's allowance for loan losses represented 0.96%2 of gross loans held for investment (excluding PPP loans) at December 31, 2022, compared to 0.95%2 at September 30, 2022, and 0.68%2 at December 31, 2021. The increase in this ratio from December 31, 2021 to December 31, 2022, was primarily attributable to additional allowance for loan growth during 2022 and greater qualitative factor adjustments, mainly due to less favorable economic conditions. Remaining acquired loan discounts related to loans acquired in the Company's completed mergers were $7.9 million as of December 31, 2022, $10.4 million as of September 30, 2022, and $16.2 million as of December 31, 2021.
    • The ratio of tangible stockholders' equity to tangible total assets was 7.3%3 at December 31, 2022, compared to 7.7%3 at September 30, 2022, and 9.3%3 at December 31, 2021. Tangible book value per common share was $12.003 at December 31, 2022, compared to $11.513 at September 30, 2022, and $13.013 at December 31, 2021. The after-tax effect of the unrealized loss in the Company's available for sale investment portfolio was $45.1 million at December 31, 2022, compared to $49.4 million at September 30, 2022, and $3.6 million at December 31, 2021. The effect of the after-tax unrealized loss on tangible book value per common share was $2.38, $2.60, and $0.19, as of each of these respective period ends.
  • Lower expenses reflect decline in regulatory remediation and personnel costs
    • Noninterest expense was $27.6 million for the fourth quarter of 2022, a decline of $1.7 million, or 5.7%, from the third quarter of 2022, and an increase of $2.4 million, or 9.6%, from the fourth quarter of 2021.
    • The decline relative to the prior quarter primarily reflects lower remediation costs related to the Agreement and lower salaries and employee benefit costs, primarily due to downward adjustments of incentive expense. The increase relative to the fourth quarter of the prior year primarily reflects higher regulatory remediation costs and legal, issuer, and regulatory filing costs, partially offset by lower salaries and employee benefit costs, primarily due to lower headcount in the Company's mortgage division.
  • Cyclical challenges continue to pressure fee-based revenues
    • Noninterest income was $5.8 million for the fourth quarter of 2022, a decline of $2.1 million from the third quarter of 2022, and $16.1 million from the fourth quarter of 2021.
    • The decline in noninterest income on a linked quarter basis primarily reflects negative fair value adjustments to mortgage servicing rights, and lower gain on sale of government-guaranteed loans, due to the timing of sales of these loans. The decline relative to the fourth quarter of the prior year also reflects lower mortgage-related income, lower fair value adjustments of other equity investments, and a gain on the termination of interest rate swaps that occurred during the fourth quarter of 2021. 
    • Mortgage sale volumes were $52.4 million and $83.0 million for the fourth and third quarters of 2022, respectively, compared to $234.5 million for the fourth quarter of 2021.

Income Statement

Net Interest Income

Net interest income was $34.0 million for the fourth quarter of 2022, compared to $28.7 million for the third quarter of 2022 and $20.9 million for the fourth quarter of 2021. Accretion of PAA related to acquired loans included in interest income was $2.6 million, $0.8 million, and $0.8 million for the same respective periods. Amortization of PAA on assumed time deposits and borrowings, which reduced interest expense, was $0.3 million, $0.4 million, and $0.7 million for the same respective periods.

Interest income for the fourth quarter of 2022 increased $9.1 million from the third quarter of 2022, while interest expense increased $3.9 million in the same comparative period. Interest income in the fourth quarter of 2022 benefited from higher average balances of and yields and fees on loans held for investment, while funding costs increased primarily due to repricing of select interest-bearing deposit accounts (primarily from fintech relationships) and higher average balances and cost on Federal Home Loan Bank of Atlanta advances.

Average balances of interest-earning assets increased $126.5 million in the fourth quarter of 2022 from the third quarter of 2022, primarily due to higher average balances of loans held for investment (excluding PPP loans), which increased $176.0 million over the same period. Yields on average loans held for investment (excluding PPP loans) increased to 6.74% for the fourth quarter of 2022 from 5.67% for the third quarter of 2022, primarily due to recent loan growth, the re-pricing of variable-rate loans in the higher rate environment, and higher fee income.

Cost of funds was 1.22% and 0.69% for the fourth and third quarters of 2022, and 0.42% for the fourth quarter of 2021, while cost of deposits was 0.85%, 0.50%, and 0.29%, for the same respective periods. The targeted federal funds rate increased from 0.00% to 0.25% in the fourth quarter of 2021 to 4.25% to 4.50% in the fourth quarter of 2022.

Net interest margin for the fourth and third quarters of 2022 and the fourth quarter of 2021 was 4.83%, 4.27%, and 3.39%, respectively. Accretion and amortization of PAA had a 41 basis point, 17 basis point, and 24 basis point positive effect on net interest margin for the same respective periods.

Net interest income was $110.4 million and $92.5 million for the years ended December 31, 2022 and 2021, respectively, while net interest margin was 4.22% and 3.51% for the same respective periods. Accretion and amortization of PAA and contributions from PPP loans, including the corresponding funding, had a 34 basis point and 39 basis point positive effect on net interest margin for the years ended December 31, 2022 and 2021, respectively.

Provision for Loan Losses

The Company recorded a provision for loan losses of $4.0 million for the fourth quarter of 2022, compared to $3.9 million for the third quarter of 2022, and $0.1 million for the fourth quarter of 2021. Provision for loan losses for the years ended December 31, 2022 and 2021 was $17.9 million and $0.1 million, respectively. Provision for loan losses in the 2022 periods was primarily attributable to reserves for loan growth, qualitative factor adjustments due to changes in economic conditions, and higher specific reserves for impaired loans.

Noninterest Income

Noninterest income for the fourth and third quarters of 2022 was $5.8 million and $8.0 million, respectively, compared to $21.9 million for the fourth quarter of 2021. Lower noninterest income in the fourth quarter of 2022 compared to both comparative periods was primarily attributable to lower income from the Company's mortgage division, including mortgage servicing rights, and lower gain on sale of government guaranteed loans due to the variability in the timing of loan sales. Additionally, the fourth quarter of 2021 had higher reported fair value adjustments on other equity investments and a gain on the termination of interest rate swaps, totaling $13.5 million.

Noninterest income for the years ended December 31, 2022 and 2021 was $48.1 million and $87.0 million, respectively. Of the decline of $39.0 million over these comparative periods, $24.3 million was due to the gain on the sale of PPP loans and $6.2 million was due to a gain on termination of interest rate swaps. The remainder of the decline was primarily due to lower income from the Company's mortgage division of $16.4 million, partially offset by higher gain on sale of government guaranteed loans of $2.7 million.

Noninterest Expense

Noninterest expense for the fourth and third quarters of 2022 was $27.6 million and $29.2 million, respectively, compared to $25.1 million for the fourth quarter of 2021. Excluding expenses incurred in the remediation of regulatory matters, noninterest expense decreased $0.5 million in the fourth quarter of 2022 from the third quarter of 2022. Lower salaries and employee benefit cost, primarily due to the reduction in incentive expense, was partially offset by higher legal, issuer, and regulatory filing and contractual services expenses. The Company's efficiency ratio for the fourth and third quarters of 2022 was 69.2% and 79.7%, respectively. Excluding regulatory remediation expenses, the efficiency ratio for the same respective periods was 62.0%3 and 68.7%3.

Noninterest expense for the years ended December 31, 2022 and 2021 was $104.8 million and $111.0 million, respectively. Excluding regulatory remediation expenses in the 2022 period and merger-related expenses in both the 2022 and 2021 periods, noninterest expense was $97.3 million and $99.1 million for the same respective periods.

Balance Sheet

Loans

Loans held for investment, excluding PPP loans, were $2.40 billion at December 31, 2022, an increase of $240.8 million, or 11.2%, from the prior quarter-end, and $621.9 million, or 35.0%, from the year-ago period-end. The Company experienced some degree of softening in the loan pipeline over the course of the fourth quarter of 2022, reflecting a combination of increased selectivity and macroeconomic factors.

Deposits

Deposits were $2.50 billion at December 31, 2022, an increase of $93.0 million, or 3.9%, from the prior quarter-end, and $204.7 million, or 8.9%, from the year-ago period-end. Noninterest-bearing deposits comprised 25.6% of total deposits as of December 31, 2022, compared to 32.7% as of the prior quarter-end, and 29.8% as of the year-ago period-end.

The total loan-to-deposit ratio was 99.1% at December 31, 2022, compared to 91.2% at the prior quarter-end, and 84.1% at the year-ago period-end. The held-for-investment loan-to-deposit ratio was 96.3%, compared to 90.1% at the prior quarter-end, and 78.7% at the year-ago period-end. 

Capital

The Company previously announced that on January 10, 2023, its board of directors declared a $0.1225 per common share quarterly dividend, which was paid on January 31, 2023, to shareholders of record as of January 20, 2023.

Blue Ridge Bank's regulatory capital ratios as of December 31, 2022 were 11.15%, 10.25%, 10.25%, and 9.25% for total risk-based capital, tier 1 risk-based capital, common equity tier 1 risk-based capital, and tier 1 leverage, respectively, compared to 13.11%, 12.49%, 12.49%, and 10.05% for the same respective capital ratios as of December 31, 2021.

Fintech Business

Interest and fee income related to fintech partnerships represented approximately $3.1 million and $2.9 million of total revenue for the Company for the fourth and third quarters of 2022, respectively. Included in deposits related to fintech relationships were assets managed by BRB Financial Group's trust division of $49.5 million as of December 31, 2022.

Other Matters

In the first quarter of 2022, the Company sold its majority interest in MoneyWise Payroll Solutions, Inc. ("MoneyWise") to the holder of the minority interest in MoneyWise. Asset and liability balances and income statement amounts related to MoneyWise are reported as discontinued operations for all periods presented.

The Company completed the merger of Bay Banks of Virginia, Inc. ("Bay Banks"), the holding company of Virginia Commonwealth Bank, into the Company on January 31, 2021. Immediately following the completion of the merger, Virginia Commonwealth Bank was merged into Blue Ridge Bank. Earnings for the year ended December 31, 2021 included the earnings of Bay Banks from the effective date of the merger.

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; 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 Excludes purchased credit-impaired loans.

2 The Company holds no allowance for loan losses on PPP loans as they are fully guaranteed by the U.S. government.

3 Non-GAAP financial measures are defined below. 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)



December 31, 2022



September 30, 2022



December 31, 2021

Interest income:













Interest and fees on loans



$                         38,934



$                          30,206



$                         21,685

Interest on taxable securities



2,508



2,337



1,612

Interest on nontaxable securities



89



81



62

Interest on deposit accounts and federal funds sold



754



522



45

Total interest income



42,285



33,146



23,404

Interest expense:













Interest on deposits



5,131



3,032



1,593

Interest on subordinated notes



547



570



485

Interest on FHLB and FRB borrowings



2,651



867



448

Total interest expense



8,329



4,469



2,526

Net interest income



33,956



28,677



20,878

Provision for loan losses



3,992



3,900



117

Net interest income after provision for loan losses



29,964



24,777



20,761

Noninterest income:













Fair value adjustments of other equity investments



78



(50)



7,316

Residential mortgage banking income, net



2,832



2,570



4,365

Mortgage servicing rights



(871)



597



1,493

Gain on sale of government guaranteed loans



204



1,565



680

Gain on termination of interest rate swaps







6,221

Wealth and trust management



451



513



439

Service charges on deposit accounts



293



354



391

Increase in cash surrender value of bank owned life insurance



402



398



253

Bank and purchase card, net



866



353



709

Other



1,585



1,668



75

Total noninterest income



5,840



7,968



21,942

Noninterest expense:













Salaries and employee benefits



11,863



14,174



15,362

Occupancy and equipment



1,509



1,422



1,520

Data processing



1,441



1,332



1,107

Legal, issuer, and regulatory filing 



1,300



804



299

Advertising and marketing



318



302



405

Communications 



1,064



932



1,011

Audit and accounting fees



476



308



227

FDIC insurance



543



460



175

Intangible amortization



365



377



412

Other contractual services



1,334



703



631

Other taxes and assessments



716



711



638

Regulatory remediation



2,884



4,025



Merger-related







171

Other



3,739



3,658



3,185

Total noninterest expense



27,552



29,208



25,143

Income from continuing operations before income tax



8,252



3,537



17,560

Income tax expense



1,948



801



4,733

Net income from continuing operations



6,304



2,736



12,827

Discontinued operations:













Loss from discontinued operations before income taxes 







(41)

Income tax benefit







(9)

Net loss from discontinued operations







(32)

Net income



$                           6,304



$                            2,736



$                         12,795

Net loss from discontinued operations attributable to noncontrolling interest







(2)

Net income attributable to Blue Ridge Bankshares, Inc.



$                           6,304



$                            2,736



$                         12,793

Net income available to common stockholders



$                           6,304



$                            2,736



$                         12,793

Basic and diluted EPS from continuing operations



$                             0.33



$                              0.15



$                             0.68















 

Blue Ridge Bankshares, Inc.











Consolidated Statements of Income (unaudited)















For the Twelve Months Ended 

(Dollars in thousands, except per common share data)



December 31, 2022



December 31, 2021



Interest income:











Interest and fees on loans



$                       116,826



$                          97,933



Interest on taxable securities



8,744



5,192



Interest on nontaxable securities



334



239



Interest on deposit accounts and federal funds sold



1,572



182



Total interest income



127,476



103,546



Interest expense:











Interest on deposits



11,260



6,437



Interest on subordinated notes



2,215



2,627



Interest on FHLB and FRB borrowings



3,610



2,001



Total interest expense



17,085



11,065



Net interest income



110,391



92,481



Provision for loan losses



17,886



117



Net interest income after provision for loan losses



92,505



92,364



Noninterest income:











Fair value adjustments of other equity investments



9,306



7,316



Gain on sale of PPP loans





24,315



Residential mortgage banking income, net



12,609



28,624



Mortgage servicing rights



8,038



8,398



Gain on sale of government guaranteed loans



4,734



2,005



Gain on termination of interest rate swaps





6,221



Wealth and trust management



1,769



2,373



Service charges on deposit accounts



1,289



1,464



Increase in cash surrender value of bank owned life insurance



1,348



932



Bank and purchase card, net



2,240



1,805



Other



6,759



3,535



Total noninterest income



48,092



86,988



Noninterest expense:











Salaries and employee benefits



56,006



61,481



Occupancy and equipment



5,916



6,413



Data processing



4,593



4,233



Legal, issuer, and regulatory filing 



3,004



1,736



Advertising and marketing



1,460



1,364



Communications 



3,825



2,810



Audit and accounting fees



1,304



902



FDIC insurance



1,340



1,014



Intangible amortization



1,525



1,671



Other contractual services



3,137



2,783



Other taxes and assessments



2,668



2,607



Regulatory remediation



7,442





Merger-related



50



11,868



Other



12,506



12,106



Total noninterest expense



104,776



110,988



Income from continuing operations before income tax



35,821



68,364



Income tax expense



8,244



15,740



Net income from continuing operations



27,577



52,624



Discontinued operations:











Income (loss) from discontinued operations before income taxes (including gain on

disposal of $471 thousand for the twelve months ended December 31, 2022)



426



(183)



Income tax expense (benefit)



89



(39)



Net income (loss) from discontinued operations



337



(144)



Net income



$                         27,914



$                          52,480



Net income from discontinued operations attributable to noncontrolling interest



(1)



(3)



Net income attributable to Blue Ridge Bankshares, Inc.



$                         27,913



$                          52,477



Net income available to common stockholders



$                         27,913



$                          52,477



Basic and diluted EPS from continuing operations 



$                             1.47



$                              2.95















 

Blue Ridge Bankshares, Inc.









Consolidated Balance Sheets









(Dollars in thousands, except share data)



(unaudited)

December 31, 2022



December 31, 2021 (1)

Assets









Cash and due from banks



$              77,274



$            130,548

Federal funds sold



1,426



43,903

Securities available for sale, at fair value



354,341



373,532

Restricted equity investments



21,257



8,334

Other equity investments



23,776



14,184

Other investments



24,672



12,681

Loans held for sale



69,534



121,943

Paycheck Protection Program loans, net of deferred fees and costs



11,967



30,406

Loans held for investment, net of deferred fees and costs



2,399,092



1,777,172

Less: allowance for loan losses



(22,939)



(12,121)

Loans held for investment, net



2,376,153



1,765,051

Accrued interest receivable



12,393



9,573

Other real estate owned



195



157

Premises and equipment, net



23,152



26,624

Right-of-use asset



6,903



6,317

Bank owned life insurance



47,245



46,545

Goodwill



26,826



26,826

Other intangible assets



6,583



7,594

Mortgage derivative asset



112



1,876

Mortgage servicing rights, net



28,991



16,469

Mortgage brokerage receivable



176



4,064

Deferred tax asset, net



9,182



150

Other assets



18,887



17,061

Assets of discontinued operations





1,301

Total assets



$         3,141,045



$         2,665,139

Liabilities and Stockholders' Equity









Deposits:









Noninterest-bearing demand



$            640,101



$            685,801

Interest-bearing demand and money market deposits



1,318,799



962,092

Savings



151,646



150,376

Time deposits



391,961



499,502

Total deposits



2,502,507



2,297,771

FHLB borrowings



311,700



10,111

FRB borrowings



51



17,901

Subordinated notes, net



39,920



39,986

Lease liability



7,860



7,651

Other liabilities



19,634



14,543

Liabilities of discontinued operations





37

Total liabilities



2,881,672



2,388,000

Commitments and contingencies









Stockholders' Equity:









Common stock, no par value; 50,000,000 and 25,000,000 shares

authorized at December 31, 2022 and December 31, 2021,

respectively; 18,950,329 and 18,774,082 shares issued and outstanding

at December 31, 2022 and December 31, 2021, respectively



195,960



194,309

Additional paid-in capital



252



252

Retained earnings



108,262



85,982

Accumulated other comprehensive loss



(45,101)



(3,632)

 Total Blue Ridge Bankshares, Inc. stockholders' equity



259,373



276,911

Noncontrolling interest of discontinued operations





228

Total stockholders' equity



259,373



277,139

Total liabilities and stockholders' equity



$         3,141,045



$         2,665,139











(1) Derived from audited December 31, 2021 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)



December 31,



September 30,



June 30,



March 31,



December 31,

Income Statement Data:



2022



2022



2022



2022



2021

Interest income



$                42,285



$                33,146



$                26,243



$                25,802



$                23,404

Interest expense



8,329



4,469



2,153



2,134



2,526

Net interest income



33,956



28,677



24,090



23,668



20,878

Provision for loan losses



3,992



3,900



7,494



2,500



117

Net interest income after provision for loan losses



29,964



24,777



16,596



21,168



20,761

Noninterest income



5,840



7,968



10,190



24,094



21,942

Noninterest expenses



27,552



29,208



25,326



22,689



25,143

Income before income taxes



8,252



3,537



1,460



22,573



17,560

Income tax expense



1,948



801



342



5,153



4,733

Net income from continuing operations



6,304



2,736



1,118



17,420



12,827

Net income (loss) from discontinued operations









337



(32)

Net income



6,304



2,736



1,118



17,757



12,795

Net (income) loss from discontinued operations attributable to

noncontrolling interest









(1)



(2)

Net income attributable to Blue Ridge Bankshares, Inc.



$                  6,304



$                  2,736



$                  1,118



$                17,756



$                12,793

Per Common Share Data:





















Basic EPS from continuing operations



$                    0.33



$                    0.15



$                    0.06



$                    0.93



$                    0.68

Basic EPS from discontinued operations 









0.02



Basic EPS attributable to Blue Ridge Bankshares, Inc. 



$                    0.33



$                    0.15



$                    0.06



$                    0.95



$                    0.68

Diluted EPS from continuing operations



$                    0.33



$                    0.15



$                    0.06



$                    0.93



$                    0.68

Diluted EPS from discontinued operations 









0.02



Diluted EPS attributable to Blue Ridge Bankshares, Inc. 



$                    0.33



$                    0.15



$                    0.06



$                    0.95



$                    0.68

Dividends declared per common share



$                0.1255



$                0.1255



$                0.1255



$                0.1225



$                      —

Book value per common share 



13.69



13.22



13.95



14.84



14.76

Tangible book value per common share - Non-GAAP



12.00



11.51



12.21



13.09



13.01

Balance Sheet Data:





















Assets



$           3,141,045



$           2,881,451



$           2,799,643



$           2,724,584



$           2,665,139

Loans held for investment (including PPP loans)



2,411,059



2,171,490



2,064,037



1,866,197



1,807,578

Loans held for investment (excluding PPP loans)



2,399,092



2,158,342



2,048,383



1,843,344



1,777,172

Allowance for loan losses  



22,939



20,534



17,242



12,013



12,121

Purchase accounting adjustments (discounts) on acquired loans



7,872



10,373



12,192



13,514



16,203

Loans held for sale



69,534



25,800



32,759



41,004



121,943

Securities available for sale, at fair value



354,341



359,516



381,536



375,484



373,532

Noninterest-bearing demand deposits



640,101



787,514



785,743



766,506



685,801

Total deposits



2,502,507



2,409,486



2,335,707



2,354,081



2,297,771

Subordinated notes, net 



39,920



39,937



39,953



39,970



39,986

FHLB and FRB advances



311,751



150,155



135,060



25,319



28,012

Total stockholders' equity



259,373



250,502



261,660



278,482



277,139

Weighted average common shares outstanding - basic 



18,857



18,849



18,767



18,772



18,774

Weighted average common shares outstanding - diluted



18,863



18,860



18,778



18,789



18,795

Financial Ratios:





















Return on average assets (1)



0.83 %



0.38 %



0.17 %



2.68 %



1.90 %

Operating return on average assets (1) - Non-GAAP



1.14 %



0.81 %



0.23 %



2.68 %



1.92 %

Return on average equity (1)



9.56 %



4.10 %



1.57 %



25.84 %



18.90 %

Operating return on average equity (1) - Non-GAAP



13.01 %



8.86 %



2.14 %



25.92 %



19.10 %

Total loan to deposit ratio



99.1 %



91.2 %



89.8 %



81.0 %



84.1 %

Held for investment loan to deposit ratio



96.3 %



90.1 %



88.4 %



79.3 %



78.7 %

Net interest margin (1)



4.83 %



4.27 %



3.89 %



3.88 %



3.39 %

Cost of deposits (1)



0.85 %



0.50 %



0.26 %



0.27 %



0.29 %

Cost of funds (1)



1.22 %



0.69 %



0.36 %



0.36 %



0.42 %

Efficiency ratio



69.2 %



79.7 %



73.9 %



47.5 %



59.1 %

Operating efficiency ratio - Non-GAAP



62.0 %



68.7 %



72.4 %



47.4 %



58.7 %

Regulatory remediation expenses



2,884



4,025



510



23



Merger-related expenses (MRE)









50



171

Capital and Asset Quality Ratios:





















Average stockholders' equity to average assets



8.7 %



9.2 %



10.8 %



10.4 %



10.1 %

Allowance for loan losses to loans held for investment, excluding

PPP loans



0.96 %



0.95 %



0.84 %



0.65 %



0.68 %

Nonperforming loans to total assets



0.59 %



0.35 %



0.44 %



0.53 %



0.60 %

Nonperforming assets to total assets



0.60 %



0.36 %



0.44 %



0.53 %



0.61 %























Reconciliation of Non-GAAP Financial Measures (unaudited):











































Tangible Common Equity:





















Total stockholders' equity 



$              259,373



$              250,502



$              261,660



$              278,482



$              277,139

Less: Goodwill and other intangibles, net of deferred tax liability (2)



(32,027)



(32,369)



(32,632)



(32,716)



(32,942)

Tangible common equity (Non-GAAP)



$              227,346



$              218,133



$              229,028



$              245,766



$              244,197

Total shares outstanding 



18,950



18,946



18,762



18,771



18,774

Book value per common share 



$                  13.69



$                  13.22



$                  13.95



$                  14.84



$                  14.76

Tangible book value per common share (Non-GAAP)



12.00



11.51



12.21



13.09



13.01























Tangible stockholders' equity to tangible total assets





















Total assets 



$           3,141,045



$           2,881,451



$           2,799,643



$           2,724,584



$           2,665,139

Less: Goodwill and other intangibles, net of deferred tax liability (2)



(32,027)



(32,369)



(32,632)



(32,716)



(32,942)

Tangible total assets (Non-GAAP)



$           3,109,018



$           2,849,082



$           2,767,011



$           2,691,868



$           2,632,197

Tangible common equity (Non-GAAP)



$              227,346



$              218,133



$              229,028



$              245,766



$              244,197

Tangible stockholders' equity to tangible total assets (Non-GAAP)



7.3 %



7.7 %



8.3 %



9.1 %



9.3 %























Operating return on average assets (annualized)





















Net income 



$                  6,304



$                  2,736



$                  1,118



$                17,755



$                12,795

Add: MRE, after-tax basis (ATB) (3)









40



135

Add: Regulatory remediation expenses, ATB (3)



2,278



3,180



403



18



Operating net income (Non-GAAP)



$                  8,582



$                  5,916



$                  1,521



$                17,813



$                12,930

Average assets



$           3,020,371



$           2,903,447



$           2,646,874



$           2,653,987



$           2,687,204

Operating return on average assets (annualized) (Non-GAAP)



1.14 %



0.81 %



0.23 %



2.68 %



1.92 %























Operating return on average equity (annualized)





















Net income 



$                  6,304



$                  2,736



$                  1,118



$                17,755



$                12,795

Add: MRE, ATB (3)









40



135

Add: Regulatory remediation expenses, ATB (3)



2,278



3,180



403



18



Operating net income (Non-GAAP)



$                  8,582



$                  5,916



$                  1,521



$                17,813



$                12,930

Average stockholders' equity



$              263,826



$              267,057



$              284,913



$              274,887



$              270,730

Operating return on average equity (annualized) (Non-GAAP)



13.01 %



8.86 %



2.14 %



25.92 %



19.10 %























Operating efficiency ratio





















Total noninterest expense 



$                27,552



$                29,208



$                25,326



$                22,691



$                25,445

Less: MRE









50



171

Less: Regulatory remediation expenses



2,884



4,025



510



23



Noninterest expense, adjusted (Non-GAAP)



$                24,668



$                25,183



$                24,816



$                22,618



$                25,274

Net interest income 



33,956



28,677



24,090



23,668



20,878

Noninterest income



5,840



7,968



10,190



24,094



22,203

Total of net interest income and noninterest income



$                39,796



$                36,645



$                34,280



$                47,762



$                43,081

Operating efficiency ratio (Non-GAAP)



62.0 %



68.7 %



72.4 %



47.4 %



58.7 %























(1) Annualized.





















(2) Excludes mortgage servicing rights.





















(3) Assumes an income tax rate of 21% and full deductibility.











































 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/blue-ridge-bankshares-inc-announces-fourth-quarter-and-full-year-2022-results-301737947.html

SOURCE Blue Ridge Bankshares, Inc.

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