# Blue Ridge Bankshares, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Blue Ridge Bankshares, Inc.](/companies/brbs.md) (CIK 842717)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:22 ET
- Period: 2025-06-30
- Accession: 0000950170-25-104110
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/842717/000095017025104110/brbs-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/842717/000095017025104110/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $480.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $25.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $1.3m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $862.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.01 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.01 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.01 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.01 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 88,582,343 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 87,310,546 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $7.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $152.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Total assets | at 2025-06-30 | $2.56bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $2.21bn | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $344.3m | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 85,973 characters.

*The following presents management’s discussion and analysis of the Company’s consolidated financial condition and the results of the Company's operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the notes thereto included in this Form 10-Q and the audited consolidated financial statements and the 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”). Results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results of operations for the balance of 2025, or for any other period. As used in this report, the terms “the Company,” “we,” “us,” and “our” refer to Blue Ridge Bankshares, Inc. and its consolidated subsidiaries. The term “Bank” refers to Blue Ridge Bank, National Association.*

### Cautionary Note About Forward-Looking Statements

The Company makes certain forward-looking statements in this Form 10-Q that are subject to risks and uncertainties. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of management’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 management’s 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 its control. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.

The following factors, among others, could cause the Company’s financial performance to differ materially from that expressed in such forward-looking statements:

- the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations;
- the effects of, and changes in, the macroeconomic environment and financial market conditions, including monetary and fiscal policies, interest rates, and inflation;
- the impact of, and the ability to comply with, the terms of the Consent Order, as defined below, with the Office of the Comptroller of the Currency ("OCC"), including the heightened capital requirements and other restrictions therein, and other regulatory directives;
- the imposition of additional regulatory actions or restrictions for noncompliance with the Consent Order or otherwise;
- the Company’s involvement in, and the outcome of, any litigation, legal proceedings, or enforcement actions that may be instituted against the Company;
- reputational risk and potential adverse reactions of the Company’s customers, suppliers, employees, or other business partners;
- the Company’s ability to manage its fintech relationships, including implementing enhanced controls, complying with the OCC directives and applicable laws and regulations, and managing the final phases of the wind down of these partnerships;
- the quality and composition of the Company’s loan and investment portfolios, including changes in the level of the Company’s nonperforming assets and charge-offs;
- the Company’s management of risks inherent in its loan portfolio, the credit quality of its borrowers, and the risk of a prolonged downturn in the real estate market, which could impair the value of the Company’s collateral and its ability to sell collateral upon any foreclosure;
- the ability to maintain adequate liquidity by growing and retaining deposits and secondary funding sources, especially if the Company's or its industry's reputation become damaged;
- the ability to maintain capital levels adequate to support the Company's business and to comply with the Consent Order directives;
- the ability of the Company to implement cost-saving initiatives and efficiency measures, as well as increase earning assets, in order to yield acceptable levels of profitability;
- the ability to generate sufficient future taxable income for the Company to realize its deferred tax assets, including the net operating loss carryforward;
- the timely development of competitive products and services and the acceptance of these products and services by new and existing customers;
- changes in consumer spending and savings habits;
- the willingness of users to substitute competitors’ products and services for the Company’s products and services;
- the impact of unanticipated outflows of deposits;
- technological and social media changes;
- potential exposure to fraud, negligence, computer theft, and cyber-crime;
- adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, supervisory and regulatory actions and costs, and related impacts on customer and client behavior;
- changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or the Bank in particular, more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products;
- the impact of changes in financial services policies, laws, and regulations, including laws, regulations, and policies concerning taxes, banking, securities, real estate and insurance, the application thereof by bank regulatory bodies, and the three branches of the federal government;
- the effect of changes in accounting standards, policies, and practices as may be adopted from time to time;
- estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Company’s assets and liabilities;
- geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad;
- the economic impact of duties, tariffs, or other barriers or restrictions on trade, any retaliatory countermeasures, and the volatility and uncertainty arising therefrom;
- the occurrence or continuation of widespread health emergencies or pandemics, significant natural disasters, severe weather conditions, floods, and other catastrophic events;
- other risks and factors identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections and elsewhere in the 2024 Form 10-K and in this Form 10-Q and in filings the Company makes from time to time with the Securities and Exchange Commission (“SEC”).

The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in the 2024 Form 10-K and this Form 10-Q, including those discussed in the section entitled "Risk Factors" in those filings. If one or more of the factors affecting forward-looking information and statements proves incorrect, then actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this Form 10-Q. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements. The Company will not update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how these risks and uncertainties will affect it.

### Sale of Mortgage Division

On March 27, 2025, the Company completed the previously announced sale of its mortgage division operating as Monarch Mortgage. The sale, which included the transfer of certain assets and leases, resulted in a $0.2 million loss, primarily due to the write-off of fixed assets and lease impairment, and is reported in other noninterest income. As of June 30, 2025, the Company had closed, funded, and sold the loans that were in process at the time of the sale.

This transaction did not meet the criteria for classification as a discontinued operation under Accounting Standards Codification ("ASC") 205-20, Presentation of Financial Statements – Discontinued Operations, and is therefore reported within continuing operations as of and for all periods stated herein.

### Regulatory Matters

On January 24, 2024, the Bank consented to the issuance of the Consent Order by the OCC ("Consent Order"). The Consent Order generally incorporates the provisions of the formal written agreement (the "Written Agreement") entered into between the Bank and the OCC on August 29, 2022, as well as adding new provisions. The Written Agreement principally concerned the Bank’s fintech operations and required the Bank to continue enhancing its controls for assessing and managing the third-party, Bank Secrecy Act/Anti-Money Laundering, and information technology risks stemming from its fintech partnerships. The Consent Order adds time frames by which certain of the directives are required, requires the Bank to submit a strategic plan and a capital plan, and places further restrictions on the Company’s fintech operations. The Consent Order also requires the Bank to maintain a leverage ratio of 10.0% and a total capital ratio of 13.0%, referred to as minimum capital ratios. As of June 30, 2025 and December 31, 2024, the Bank’s capital ratios exceeded these minimum capital ratios. The Company believes it has made significant progress towards meeting the requirements of the Consent Order. Complete copies of the Written Agreement and the Consent Order are included as Exhibits 10.9 and 10.10, respectively, of the 2024 Form 10-K.

### Private Placements

In the second quarter of 2024, the Company closed private placements in which it issued and sold shares of its common and preferred stock for gross proceeds of $161.6 million (collectively, the "Private Placements"). On June 20, 2024, the Company’s shareholders approved an amendment to the Company's articles of incorporation authorizing the issuance of additional shares of common stock, thus enabling the conversion of the preferred shares issued in the Private Placements into shares of the Company’s common stock. The conversion occurred on June 28, 2024 and November 7, 2024. Capital proceeds received, net of issuance costs, from the Private Placements totaled $152.1 million. The Private Placements also included the issuance of warrants to purchase common stock at $2.50 per share.

The table below presents information pertaining to warrants to purchase the Company’s common stock as of and for the period stated.

|  | As of and for the six months ended June 30, 2025 Warrants Issued April 3, 2024 | Warrants Issued June 13, 2024 | Total Warrants |
| --- | ---: | ---: | ---: |
| Warrants outstanding at beginning of period | 29,027,999 | 2,424,000 | 31,451,999 |
| Warrants exercised during the period (1) | (3,778,000) | — | (3,778,000) |
| Warrants outstanding at end of period | 25,249,999 | 2,424,000 | 27,673,999 |
| Remaining exercise term (years) | 3.76 | 3.95 |  |
| (1) 1,016,000 warrants were exercised during the three months ended June 30, 2025. |  |  |  |

### General

There were no changes to the Critical Accounting Policies disclosed in Item 7 of the 2024 Form 10-K.

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.

### Comparison of Financial Condition as of June 30, 2025 and December 31, 2024

Total assets were $2.56 billion as of June 30, 2025, a decrease of $181.8 million from $2.74 billion as of December 31, 2024. Most of this decrease was attributable to a decline in loans held for investment, which decreased $133.2 million to $1.98 billion as of June 30, 2025, from $2.11 billion as of December 31, 2024. Of the decline in loans held for investment, $35.1 million was due to a continuation of the Company's actions beginning in 2024 to purposefully and selectively reduce balances of loans where borrowers did not represent in-market relationships. The allowance for credit losses ("ACL") was $22.0 million and $23.0 million as of June 30, 2025 and December 31, 2024, respectively.

Total deposits were $2.01 billion as of June 30, 2025, a net decrease of $169.2 million from December 31, 2024. The decline in the first six months of 2025 was primarily due to a $106.4 million decrease in brokered time deposits.

Total stockholders’ equity increased by $16.5 million to $344.3 million as of June 30, 2025, compared to $327.8 million at December 31, 2024, primarily due to additional capital of $9.4 million from the exercise of warrants to purchase common stock and a $3.8 million decrease in after-tax unrealized losses in the Company’s portfolio of securities available for sale.

### Comparison of Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

For the three months ended June 30, 2025, the Company reported net income of $1.3 million, or $0.01 per diluted common share, compared to a net loss of $11.4 million, or ($0.47) per diluted common share, for the same period of 2024.

For the six months ended June 30, 2025, the Company reported net income of $0.9 million, or $0.01 per diluted common share, compared to a net loss of $14.3 million, or ($0.66) per diluted common share, for the same period of 2024.

Net income for the six months ended June 30, 2025 included after-tax severance costs of $0.8 million and an after-tax benefit of $1.0 million – primarily the recovery of non-credit-related amounts in the second quarter of 2025 reserved for in the prior year – as the Company concluded outstanding exit activities with a former fintech banking-as-a-service (“BaaS”) partner. The net loss for the six months ended June, 30, 2024 included a $6.7 million after-tax negative fair value adjustment recorded for an equity investment in a fintech company. After-tax regulatory remediation expenses in connection with the Consent Order for both the three and six months ended June 30, 2025 were $0, compared to $1.1 million and $3.1 million of after tax-costs incurred for the same respective periods in 2024. Net interest income for the three and six months ended June 30, 2025 was $19.8 million and $38.8 million, respectively, a decline of $0.2 million and $1.6 million from the same periods in 2024.

Interest income for the three and six months ended June 30, 2025 was $34.7 million and $70.1 million, a decrease of $5.9 million and $13.1 million from the same respective periods in 2024, primarily due to the decline in average balances of interest earning assets. Interest expense was $14.9 million and $31.3 million for the three and six months ended June 30, 2025, a decrease of $5.7 million and $11.5 million from the same respective periods in 2024, largely driven by the decline in average balances and costs of interest-bearing deposits.

*Net Interest Income.* Net interest income is the excess of interest earned on loans, investments, and other interest-earning assets less the interest paid on deposits and borrowings and is the Company’s primary revenue source. Net interest income is thereby affected by overall balance sheet size, changes in interest rates, and changes in the mix of investments, loans, deposits, and borrowings.

The following table presents the average balance sheets for the three months ended June 30, 2025 and 2024. Also shown are the amounts of interest earned on interest-earning assets, with related tax-equivalent yields, and interest expense on interest-bearing liabilities, with related rates, as well as a volume and rate analysis of changes in net interest income for the periods stated.

*(Dollars in thousands)*

| Average Assets | Average Balances, Income and Expense, Yields and Rates For the three months ended June 30, 2025 Average Balance | Interest | Yield/ Rate (1) | 2024 Average Balance | Interest | Yield/ Rate (1) | Total Increase/ (Decrease) | Increase/(Decrease) Due to Volume (2) | Rate (2) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Taxable securities | $336,749 | $2,574 | 3.06% | $324,381 | $2,399 | 2.96% | $175 | $91 | $84 |
| Tax-exempt securities (3) | 12,346 | 82 | 2.66% | 12,570 | 80 | 2.55% | 2 | (1) | 3 |
| Total securities | 349,095 | 2,656 | 3.04% | 336,951 | 2,479 | 2.94% | 177 | 90 | 87 |
| Interest-earning deposits in other banks | 127,656 | 1,359 | 4.26% | 135,283 | 1,891 | 5.59% | (532) | (107) | (425) |
| Federal funds sold | 860 | 10 | 4.65% | 6,079 | 83 | 5.46% | (73) | (71) | (2) |
| Loans held for sale | 24,150 | 1,394 | 23.09% | 64,379 | 2,212 | 13.74% | (818) | (1,382) | 564 |
| Loans held for investment (4,5,6) | 2,024,075 | 29,336 | 5.80% | 2,343,495 | 33,984 | 5.80% | (4,648) | (4,632) | (16) |
| Total average interest-earning assets | 2,525,836 | 34,755 | 5.50% | 2,886,187 | 40,649 | 5.63% | (5,894) | (6,102) | 208 |
| Less: allowance for credit losses | (23,091) |  |  | (34,594) |  |  |  |  |  |
| Total noninterest-earning assets | 128,153 |  |  | 233,544 |  |  |  |  |  |
| Total average assets | $2,630,898 |  |  | $3,085,137 |  |  |  |  |  |
| **Average Liabilities and Stockholders’ Equity:** |  |  |  |  |  |  |  |  |  |
| Interest-bearing demand, money market, and savings | $729,730 | $3,162 | 1.73% | $958,671 | $6,170 | 2.57% | $(3,008) | $(1,473) | $(1,535) |
| Time (7) | 905,453 | 9,640 | 4.26% | 980,324 | 11,102 | 4.53% | (1,462) | (848) | (614) |
| Total interest-bearing deposits | 1,635,183 | 12,802 | 3.13% | 1,938,995 | 17,272 | 3.56% | (4,470) | (2,321) | (2,149) |
| FHLB borrowings | 150,000 | 1,447 | 3.86% | 221,359 | 2,410 | 4.35% | (963) | (777) | (186) |
| FRB borrowings | — | — | — | 27,857 | 313 | 4.49% | (313) | (313) | — |
| Subordinated notes and other borrowings (8) | 34,553 | 646 | 7.48% | 39,860 | 551 | 5.53% | 95 | (73) | 168 |
| Total average interest-bearing liabilities | 1,819,736 | 14,895 | 3.27% | 2,228,071 | 20,546 | 3.69% | (5,651) | (3,484) | (2,167) |
| Noninterest-bearing demand deposits | 441,422 |  |  | 494,762 |  |  |  |  |  |
| Other noninterest-bearing liabilities | 30,609 |  |  | 44,262 |  |  |  |  |  |
| Stockholders' equity | 339,131 |  |  | 318,042 |  |  |  |  |  |
| Total average liabilities and stockholders’ equity | $2,630,898 |  |  | $3,085,137 |  |  |  |  |  |
| Net interest income and margin (9) |  | $19,860 | 3.15% |  | $20,103 | 2.79% | $(243) | $(2,618) | $2,375 |
| Cost of funds (10) |  |  | 2.63% |  |  | 3.02% |  |  |  |
| Net interest spread (11) |  |  | 2.23% |  |  | 1.95% |  |  |  |
| (1) Annualized. |  |  |  |  |  |  |  |  |  |
| (2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each. |  |  |  |  |  |  |  |  |  |
| (3) Computed on a fully taxable equivalent basis assuming a 22.32% and 21.89% income tax rate for the three months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (4) Includes deferred loan fees/costs. |  |  |  |  |  |  |  |  |  |
| (5) Non-accrual loans have been included in the computations of average loan balances. |  |  |  |  |  |  |  |  |  |
| (6) Includes accretion of fair value adjustments (discounts) on acquired loans of $370 thousand and $274 thousand for the three months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $25 thousand and $81 thousand for the three months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (8) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $25 thousand for both the three months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (9) Net interest margin is net interest income divided by average interest-earning assets. |  |  |  |  |  |  |  |  |  |
| (10) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits. |  |  |  |  |  |  |  |  |  |
| (11) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities. |  |  |  |  |  |  |  |  |  |

Average balances of interest-earning assets decreased $360.4 million to $2.53 billion for the three months ended June 30, 2025 compared to $2.89 billion for the same period of 2024. Relative to the year-ago period, this decrease reflected primarily lower average balances of loans held for investment. The yield on average loans held for investment was 5.80% for both the second quarter of 2025 and the second quarter of 2024. Interest income for the three months ended June 30, 2025 and 2024 included accretion of discounts on acquired loans of $0.4 million and $0.3 million, respectively.

Average balances of interest-bearing liabilities decreased $408.3 million to $1.82 billion for the three months ended June 30, 2025 compared to $2.23 billion for the same period of 2024. The decline relative to the comparative periods was primarily due to the exit of fintech Banking-as-a-Service ("BaaS") deposit operations and the payoff of wholesale funding.

Cost of funds was 2.63% for the second quarter of 2025 compared to 3.02% for the second quarter of 2024, while cost of deposits was 2.47% and 2.84%, for the same respective periods. Lower cost of funds and lower cost of deposits in the 2025 periods relative to the year-ago periods were primarily due to the exit of higher cost fintech BaaS deposit operations and the reduction in wholesale deposits. Cost of deposits, excluding wholesale deposits, was 1.01% for the second quarter of 2025 compared to 2.28% for the second quarter of 2024.

Net interest income (on a taxable equivalent basis) for the three months ended June 30, 2025 was $19.9 million compared to $20.1 million for the same period in 2024. The decline in the second quarter of 2025 compared to the second quarter of 2024 was primarily attributable to lower interest and fee income on loans due to lower average balances. This decline was partially offset by lower average balances and rates paid on interest-bearing demand accounts and lower average balances of wholesale funding. Net interest margin was 3.15% and 2.79% for the second quarter of 2025 and 2024, respectively. Accretion and amortization of purchase accounting adjustments had a 7 and 5 basis point positive effect on net interest margin for the same respective periods.

The following table presents the average balance sheets for the six months ended June 30, 2025 and 2024. Also shown are the amounts of interest earned on interest-earning assets, with related tax-equivalent yields, and interest expense on interest-bearing liabilities, with related rates, as well as a volume and rate analysis of changes in net interest income for the periods stated.

*(Dollars in thousands)*

| Average Assets | Average Balances, Income and Expense, Yields and Rates For the six months ended June 30, 2025 Average Balance | Interest | Yield/ Rate (1) | 2024 Average Balance | Interest | Yield/ Rate (1) | Total Increase/ (Decrease) | Increase/(Decrease) Due to Volume (2) | Rate (2) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Taxable securities | $330,945 | $4,994 | 3.02% | $331,110 | $4,837 | 2.92% | $157 | $(2) | $159 |
| Tax-exempt securities (3) | 12,410 | 163 | 2.63% | 12,596 | 157 | 2.49% | 6 | (2) | 8 |
| Total securities | 343,355 | 5,157 | 3.00% | 343,706 | 4,994 | 2.91% | 163 | (4) | 168 |
| Interest-earning deposits in other banks | 145,116 | 3,057 | 4.21% | 132,324 | 3,447 | 5.21% | (390) | 333 | (723) |
| Federal funds sold | 1,121 | 25 | 4.46% | 7,874 | 213 | 5.41% | (188) | (183) | (5) |
| Loans held for sale | 26,788 | 2,760 | 20.61% | 61,012 | 4,132 | 13.54% | (1,372) | (2,318) | 946 |
| Loans held for investment (4,5,6) | 2,056,638 | 59,124 | 5.75% | 2,381,423 | 70,410 | 5.91% | (11,286) | (9,603) | (1,682) |
| Total average interest-earning assets | 2,573,018 | 70,123 | 5.45% | 2,926,339 | 83,196 | 5.69% | (13,073) | (11,775) | (1,297) |
| Less: allowance for credit losses | (22,920) |  |  | (35,234) |  |  |  |  |  |
| Total noninterest-earning assets | 125,957 |  |  | 233,679 |  |  |  |  |  |
| Total average assets | $2,676,055 |  |  | $3,124,784 |  |  |  |  |  |
| **Average Liabilities and Stockholders’ Equity:** |  |  |  |  |  |  |  |  |  |
| Interest-bearing demand, money market, and savings | $724,909 | $6,512 | 1.80% | $1,035,366 | $13,838 | 2.67% | $(7,326) | $(4,149) | $(3,177) |
| Time (7) | 947,238 | 20,482 | 4.32% | 975,637 | 21,919 | 4.49% | (1,437) | (638) | (799) |
| Total interest-bearing deposits | 1,672,147 | 26,994 | 3.23% | 2,011,003 | 35,757 | 3.56% | (8,763) | (4,787) | (3,976) |
| FHLB borrowings | 150,000 | 2,879 | 3.84% | 222,592 | 4,779 | 4.29% | (1,900) | (1,559) | (341) |
| FRB borrowings | — | — | — | 46,429 | 1,080 | 4.65% | (1,080) | (1,080) | — |
| Subordinated notes and other borrowings (8) | 37,159 | 1,382 | 7.44% | 39,853 | 1,112 | 5.58% | 270 | (75) | 345 |
| Total average interest-bearing liabilities | 1,859,306 | 31,255 | 3.36% | 2,319,877 | 42,728 | 3.68% | (11,473) | (7,501) | (3,972) |
| Noninterest-bearing demand deposits | 449,743 |  |  | 507,619 |  |  |  |  |  |
| Other noninterest-bearing liabilities | 29,210 |  |  | 46,317 |  |  |  |  |  |
| Stockholders' equity | 337,796 |  |  | 250,971 |  |  |  |  |  |
| Total average liabilities and stockholders’ equity | $2,676,055 |  |  | $3,124,784 |  |  |  |  |  |
| Net interest income and margin (9) |  | $38,868 | 3.02% |  | $40,468 | 2.77% | $(1,600) | $(4,274) | $2,675 |
| Cost of funds (10) |  |  | 2.71% |  |  | 3.02% |  |  |  |
| Net interest spread (11) |  |  | 2.09% |  |  | 2.00% |  |  |  |
| (1) Annualized. |  |  |  |  |  |  |  |  |  |
| (2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each. |  |  |  |  |  |  |  |  |  |
| (3) Computed on a fully taxable equivalent basis assuming a 22.32% and 21.89% income tax rate for the six months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (4) Includes deferred loan fees/costs. |  |  |  |  |  |  |  |  |  |
| (5) Non-accrual loans have been included in the computations of average loan balances. |  |  |  |  |  |  |  |  |  |
| (6) Includes accretion of fair value adjustments (discounts) on acquired loans of $736 thousand and $603 thousand for the six months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $60 thousand and $178 thousand for the six months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (8) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $49 thousand and $50 thousand for the six months ended June 30, 2025 and 2024, respectively. |  |  |  |  |  |  |  |  |  |
| (9) Net interest margin is net interest income divided by average interest-earning assets. |  |  |  |  |  |  |  |  |  |
| (10) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits. |  |  |  |  |  |  |  |  |  |
| (11) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities. |  |  |  |  |  |  |  |  |  |

Average interest-earning assets were $2.57 billion for the six months ended June 30, 2025 compared to $2.93 billion for the same period of 2024, a $353.3 million decrease. This decrease was primarily attributable to declines in average balances of loans held for investment and loans held for sale, which decreased $324.8 million and $34.2 million, respectively, partially offset by higher average balances of interest-earning deposits in other banks. Total interest income (on a taxable equivalent basis) decreased $13.1 million for the six months ended June 30, 2025 from the same period of 2024. This decrease was primarily due to lower average balances on loans held for investment and loans held for sale. Interest income on loans held for investment for the six months ended June 30, 2024 included $0.7 million of interest received as a result of the payoff of a nonaccrual loan, which had a 6 and 5 basis point positive effect on the yield on loans held for investment and net interest margin, respectively. Interest income for the six months ended June 30, 2025 and 2024 included accretion of discounts on acquired loans of $0.7 million and $0.6 million, respectively.

Average interest-bearing liabilities were $1.86 billion for the six months ended June 30, 2025 compared to $2.32 billion for the same period of 2024, a $460.6 million decrease. Interest expense decreased by $11.5 million to $31.3 million for the six months ended June 30, 2025 compared to the same period of 2024. Cost of interest-bearing liabilities decreased to 3.36% for the second half of 2025 from 3.68% for the second half of 2024, while cost of funds were 2.71% and 3.02% for the same respective periods. Lower cost of funds in the 2025 period was primarily due to the exit of higher cost fintech BaaS deposit operations. Interest expense in the first halves of 2025 and 2024 included the amortization of fair value adjustments (premium) on assumed time deposits of $0.1 million and $0.2 million, respectively, which was a reduction to interest expense.

Net interest income (on a taxable equivalent basis) was $38.9 million for the six months ended June 30, 2025 compared to $40.5 million for the same period in 2024. Net interest margin was 3.02% and 2.77% for the first halves of 2025 and 2024, respectively. Accretion and amortization of purchase accounting adjustments had a 7 basis point and 6 basis point positive effect on net interest margin for the same respective periods.

*Provision for Credit Losses*. A recovery of credit losses of $0.7 million was reported for both the three and six months ended June 30, 2025, compared to a $3.1 million provision for credit losses for both the three and six months ended June 30, 2024. The recovery in the 2025 periods resulted from declines in balances of loans held for investment, partially offset by specific reserves and charge-offs for two out-of-market loans purchased in prior years. The provision for credit losses in the 2024 periods was related primarily to certain purchased loans and increased reserves for the non-guaranteed portion of government-guaranteed loans, which offset lower reserve needs due to loan portfolio balance reductions.

*Noninterest Income*. The following table presents a summary of noninterest income and the dollar and percentage change for the periods presented.

*(Dollars in thousands)*

|  | For the three months ended June 30, 2025 | June 30, 2024 | Change $ | Change % |
| --- | ---: | ---: | ---: | ---: |
| Fair value adjustments of other equity investments | $(82) | $(8,537) | $8,455 | (99.0%) |
| Residential mortgage banking income | 312 | 3,090 | (2,778) | (89.9%) |
| Mortgage servicing rights ("MSRs") | (139) | 2,019 | (2,158) | (106.9%) |
| Wealth and trust management | 409 | 623 | (214) | (34.3%) |
| Service charges on deposit accounts | 721 | 386 | 335 | 86.8% |
| Increase in cash surrender value of bank owned life insurance | 8 | 333 | (325) | (97.6%) |
| Bank and purchase card, net | 626 | 513 | 113 | 22.0% |
| Other | 1,389 | 1,845 | (456) | (24.7%) |
| Total noninterest income | $3,244 | $272 | $2,972 | 1,092.6% |

*(Dollars in thousands)*

|  | For the six months ended June 30, 2025 | June 30, 2024 | Change $ | Change % |
| --- | ---: | ---: | ---: | ---: |
| Fair value adjustments of other equity investments | $(155) | $(8,544) | $8,389 | (98.2%) |
| Residential mortgage banking income | 1,268 | 5,754 | (4,486) | (78.0%) |
| Mortgage servicing rights ("MSRs") | (137) | 2,748 | (2,885) | (105.0%) |
| Wealth and trust management | 863 | 1,143 | (280) | (24.5%) |
| Service charges on deposit accounts | 1,178 | 747 | 431 | 57.7% |
| Increase in cash surrender value of bank owned life insurance | 16 | 670 | (654) | (97.6%) |
| Bank and purchase card, net | 1,193 | 755 | 438 | 58.0% |
| Other | 2,090 | 4,787 | (2,697) | (56.3%) |
| Total noninterest income | $6,316 | $8,060 | $(1,744) | (21.6%) |

The decline in mortgage banking income in the three and six months ended June 30, 2025 compared to the same periods of 2024 was due to the previously mentioned sale of the mortgage division, and the decline in mortgage servicing income over the same period was attributable to the sale of the majority of MSR assets portfolio in the third and fourth quarters of 2024. Higher service charges on deposits accounts in the 2025 periods compared to the same periods of 2024 were primarily due to the execution of a project to more closely align products and pricing with competitors in the markets in which the Bank operates. The decline in bank owned life insurance income in the 2025 periods compared to the same periods of 2024 was due to the surrender of policies at their cash surrender values impacting the last half of 2024. The decline in other noninterest income was driven by the decrease in the number of fintech indirect lending relationships, which contributed $0.5 million and $2.5 million of noninterest income in the six months ended June 30, 2025 and 2024, respectively.

*Noninterest Expense.* The following table presents a summary of noninterest expense and the dollar and percentage change for the periods stated.

*(Dollars in thousands)*

|  | For the three months ended June 30, 2025 | June 30, 2024 | Change $ | Change % |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $13,000 | $14,932 | $(1,932) | (12.9%) |
| Occupancy and equipment | 1,129 | 1,303 | (174) | (13.4%) |
| Technology and communication | 2,565 | 2,332 | 233 | 10.0% |
| Legal and regulatory filings | 395 | 363 | 32 | 8.8% |
| Advertising and marketing | 128 | 183 | (55) | (30.1%) |
| Audit fees | 459 | 295 | 164 | 55.6% |
| FDIC insurance | 1,027 | 1,817 | (790) | (43.5%) |
| Intangible amortization | 234 | 276 | (42) | (15.2%) |
| Other contractual services | 433 | 1,857 | (1,424) | (76.7%) |
| Other taxes and assessments | 955 | 588 | 367 | 62.4% |
| Regulatory remediation | — | 1,397 | (1,397) | (100.0%) |
| Other | 1,684 | 3,965 | (2,281) | (57.5%) |
| Total noninterest expense | $22,009 | $29,308 | $(7,299) | (24.9%) |

*(Dollars in thousands)*

|  | For the six months ended June 30, 2025 | June 30, 2024 | Change $ | Change % |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $25,610 | $30,977 | $(5,367) | (17.3%) |
| Occupancy and equipment | 2,510 | 2,827 | (317) | (11.2%) |
| Technology and communication | 5,349 | 4,611 | 738 | 16.0% |
| Legal and regulatory filings | 834 | 810 | 24 | 3.0% |
| Advertising and marketing | 319 | 480 | (161) | (33.5%) |
| Audit fees | 1,037 | 1,450 | (413) | (28.5%) |
| FDIC insurance | 2,124 | 3,194 | (1,070) | (33.5%) |
| Intangible amortization | 478 | 563 | (85) | (15.1%) |
| Other contractual services | 1,028 | 3,665 | (2,637) | (72.0%) |
| Other taxes and assessments | 1,876 | 1,531 | 345 | 22.5% |
| Regulatory remediation | — | 4,041 | (4,041) | (100.0%) |
| Other | 3,795 | 7,596 | (3,801) | (50.0%) |
| Total noninterest expense | $44,960 | $61,745 | $(16,785) | (27.2%) |

Excluding regulatory remediation, noninterest expense decreased $5.9 million and $12.7 million for the three and six months ended June 30, 2025, respectively, from the same periods of 2024. These declines relative to the prior periods were primarily due to lower expenses for salaries and employee benefits, other contractual services, and other noninterest expense. The decline in salaries and employee benefits in the three and six months ended June 30, 2025 reflected a reduction in headcount as the Company continues to right-size its workforce, with the completion of certain regulatory directives and the transitioning to a more traditional community banking model. As of June 30, 2025 and 2024, the Company had 333 and 503 employees, respectively. Included in salaries and employee benefits expense were severance costs of $0.3 million and $1.0 million for the three and six months ended June 30, 2025, compared to $0 for the same respective periods in 2024. Also included in salaries and employee benefits expense for the three and six months ended June 30, 2025 was $2.0 million of expense for performance-based restricted stock awards relating to 3,400,000 shares of the Company's common stock granted to certain executive officers, which vest contingent upon the Company achieving specified profitability thresholds over three one-year performance measurement periods.

The decrease in other noninterest expense was partially due to the second quarter of 2025 recovery of non-credit-related amounts reserved for in the prior year, upon the conclusion of exit activities with a former fintech BaaS partner. Also contributing to the decline in other noninterest expense in the 2025 periods compared to the same periods of 2024 were lower mortgage servicing fees due to the first quarter of 2025 sale of Monarch Mortgage, in addition to the 2024 periods including $0.9 million of excise taxes related to the surrender of bank owned life insurance policies. Lower regulatory remediation costs and contractual services in the 2025 period reflect a reduction in the use of outside consulting services, also due to the completion of certain regulatory directives.

*Income Tax Expense*. For the three and six months ended June 30, 2025, effective tax rates were 27.0% and 2.8%, respectively, compared to 5.1% and 6.7% for the three and six months ended June 30, 2024. The higher effective income tax rate for the three months ended June 30, 2025 was primarily driven by the potential elimination of deductibility of compensation costs in future taxable periods, while the lower effective rate for the six months ended June 30, 2025 was primarily driven by the effects of a $0.3 million favorable adjustment related to a change in the state tax rate applied to the accumulated unrealized loss on the available for sale securities portfolio. The effective income tax rates for both 2024 periods were primarily attributable to $2.0 million of provision expense recognized in the second quarter of 2024 upon surrendering bank owned life insurance policies, representing the tax effect of the life-to-date income earned on the policies. Taxes on such earnings were previously permanently deferred but became subject to tax upon the surrender of the policies.

### Analysis of Financial Condition

*Loan Portfolio.* The Company makes loans to commercial entities and to individuals. Loan terms vary as to interest rate, repayment, and collateral requirements based on the type of loan and the creditworthiness of the borrower. Credit risk tends to be geographically concentrated in that a majority of the loans are to borrowers located in the markets served by the Company. All loans are underwritten within specific lending policy guidelines that are designed to maximize the Company’s profitability within an acceptable level of business risk.

The following table presents the Company’s loan portfolio by category of loan and the percentage of loans in each category to total loans as of the dates stated.

*(Dollars in thousands)*

|  | June 30, 2025 Amount | Percent | December 31, 2024 Amount | Percent |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $323,976 | 16.4% | $354,904 | 16.8% |
| Real estate – construction, commercial | 78,476 | 4.0% | 114,491 | 5.4% |
| Real estate – construction, residential | 52,031 | 2.6% | 51,807 | 2.4% |
| Real estate – commercial | 810,978 | 41.1% | 847,842 | 40.2% |
| Real estate – residential | 671,317 | 33.9% | 692,253 | 32.8% |
| Real estate – farmland | 4,723 | 0.2% | 5,520 | 0.3% |
| Consumer | 36,237 | 1.8% | 43,938 | 2.1% |
| Gross loans held for investment | 1,977,738 | 100.0% | 2,110,755 | 100.0% |
| Deferred costs, net of loan fees | 847 |  | 1,042 |  |
| Gross loans held for investment, net of deferred costs | 1,978,585 |  | 2,111,797 |  |
| Less: allowance for credit losses | (21,974) |  | (23,023) |  |
| Net loans | $1,956,611 |  | $2,088,774 |  |
| Loans held for sale (not included in totals above) | $12,380 |  | $30,976 |  |

The following table presents the Company’s portfolio of commercial real estate loans by property type as of the dates stated.

*(Dollars in thousands)*

|  | June 30, 2025 Amount | Percent | December 31, 2024 Amount | Percent |
| --- | ---: | ---: | ---: | ---: |
| Commercial real estate – owner occupied | $192,655 | 23.7% | $193,608 | 22.8% |
| Commercial real estate – non-owner occupied |  |  |  |  |
| Hospitality | 122,608 | 15.1% | 120,910 | 14.3% |
| Multi-family | 173,790 | 21.4% | 186,619 | 22.0% |
| Retail | 99,503 | 12.3% | 104,363 | 12.3% |
| Office | 72,742 | 9.0% | 73,871 | 8.7% |
| Mixed use | 49,357 | 6.1% | 49,666 | 5.9% |
| Warehouse and industrial | 37,214 | 4.6% | 39,830 | 4.7% |
| Other | 63,109 | 7.8% | 78,975 | 9.3% |
| Total real estate – commercial | $810,978 | 100.0% | $847,842 | 100.0% |

42

The current lending environment for commercial real estate (“CRE”) loans has heightened risk due to a higher interest rate environment. Potential negative impacts include higher debt service burdens for floating rate loans and fixed rate loans originated in a lower rate environment that mature and require renewal or refinancing. As these loans mature, they may be repriced at significantly higher interest rates, leading to increased debt service costs that can strain borrowers' ability to meet payment obligations. In some cases, the higher cost of refinancing may lead to loan defaults, particularly if property cash flows have not increased relatively.

Additionally, collateral values overall may be impaired by higher capitalization rates, further complicating refinancing efforts and increasing credit risk to the Bank. Certain CRE collateral types have experienced declining occupancy, demand, and rental rates, which could potentially lead to material declines in property level economics and further weaken borrowers' ability to service their debt.

The Bank’s credit administration department led by its Chief Credit Officer performs periodic analyses of emerging trends by geography where the Bank has the largest concentrations by CRE property type. These analyses include all real estate property types and geographic markets represented in the loan portfolio and are provided to the Bank's board of directors to assess whether the CRE lending strategy and risk appetite continue to be appropriate, considering changes in local market conditions and the Bank’s exposure to collateral type concentrations. Also, concentration limits by real estate collateral type are approved and monitored by the board of directors. As of June 30, 2025, the Bank is in compliance with all limits.

The following tables present the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of June 30, 2025.

*(Dollars in thousands)*

|  | Total Maturities | One Year or Less | Variable rate Total | 1-5 years | 5-15 years | More than 15 years | Fixed rate Total | 1-5 years | 5-15 years | More than 15 years |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial and industrial | $323,976 | $94,006 | $124,589 | $98,237 | $24,924 | $1,428 | $105,381 | $39,239 | $48,070 | $18,072 |
| Real estate – construction, commercial | 78,476 | 15,397 | 49,343 | 8,588 | 14,906 | 25,849 | 13,736 | 12,862 | 874 | — |
| Real estate – construction, residential | 52,031 | 45,590 | 1,576 | 1,264 | — | 312 | 4,865 | 799 | — | 4,066 |
| Real estate – commercial | 810,978 | 73,335 | 453,982 | 121,208 | 154,860 | 177,914 | 283,661 | 178,033 | 96,549 | 9,079 |
| Real estate – residential | 671,317 | 13,686 | 384,287 | 16,778 | 69,839 | 297,670 | 273,344 | 33,265 | 31,388 | 208,691 |
| Real estate – farmland | 4,723 | — | 2,005 | 147 | 225 | 1,633 | 2,718 | 1,823 | 178 | 717 |
| Consumer loans | 36,237 | 2,108 | 5,011 | 4,920 | 91 | — | 29,118 | 26,097 | 3,021 | — |
| Gross loans | $1,977,738 | $244,122 | $1,020,793 | $251,142 | $264,845 | $504,806 | $712,823 | $292,118 | $180,080 | $240,625 |

*Allowance for Credit Losses*. In determining the adequacy of the Company’s ACL, management makes estimates based on facts available at the time the ACL is determined. Such estimation requires significant judgment at the time made. Management believes that the Company’s ACL was adequate as of June 30, 2025 and December 31, 2024. There can be no assurance, however, that adjustments to the ACL will not be required in the future. Changes in the economic assumptions underlying management’s estimates and judgments, adverse developments in the economy, on a national basis or in the Company’s market area, and changes in the circumstances of particular borrowers are criteria, among others, that could increase the level of the ACL required, resulting in charges to the provision for credit losses for loans. In addition, bank regulatory agencies periodically review the Bank's ACL and may, on occasion, require an increase in the ACL or the recognition of further loan charge-offs, based on their judgment of the facts at the time of their review that may differ than that of management.

The following table presents an analysis of the change in the ACL by loan type as of and for the periods stated.

*(Dollars in thousands)*

|  | For the three months ended June 30, 2025 Commercial and industrial | Real estate – construction, commercial | Real estate – construction, residential | Real estate – commercial | Real estate – residential | Real estate – farmland | Consumer | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| ACL, beginning of period | $5,726 | $1,992 | $552 | $5,998 | $8,171 | $18 | $669 | $23,126 |
| Provision for (recovery of ) credit losses - loans | 147 | (720) | (154) | (119) | (69) | (3) | 218 | (700) |
| Charge-offs | (2,537) | — | — | — | (107) | — | (448) | (3,092) |
| Recoveries | 2,510 | — | — | — | 6 | — | 124 | 2,640 |
| Net charge-offs | (27) | — | — | — | (101) | — | (324) | (452) |
| ACL, end of period | $5,846 | $1,272 | $398 | $5,879 | $8,001 | $15 | $563 | $21,974 |
| Ratio of net charge-offs to average loans outstanding | 0.03% | 0.00% | 0.00% | 0.00% | 0.06% | 0.00% | 3.17% | 0.09% |
|  | **For the three months ended June 30, 2024** |  |  |  |  |  |  |  |
| (Dollars in thousands) | **Commercial and industrial** | **Real estate – construction, commercial** | **Real estate – construction, residential** | **Real estate – commercial** | **Real estate – residential** | **Real estate – farmland** | **Consumer** | **Total** |
| ACL, beginning of period | $13,619 | $3,596 | $919 | $9,832 | $6,338 | $18 | $703 | $35,025 |
| Provision for (recovery of) credit losses - loans | 3,451 | (408) | (143) | 430 | (57) | — | 327 | 3,600 |
| Charge-offs | (11,982) | — | (39) | — | (44) | — | (545) | (12,610) |
| Recoveries | 1,828 | — | — | — | 3 | — | 190 | 2,021 |
| Net charge-offs | (10,154) | — | (39) | — | (41) | — | (355) | (10,589) |
| ACL, end of period | $6,916 | $3,188 | $737 | $10,262 | $6,240 | $18 | $675 | $28,036 |
| Ratio of net charge-offs to average loans outstanding | 8.54% | 0.00% | 0.24% | 0.00% | 0.02% | 0.00% | 2.49% | 1.81% |

*(Dollars in thousands)*

|  | For the six months ended June 30, 2025 Commercial and industrial | Real estate – construction, commercial | Real estate – construction, residential | Real estate – commercial | Real estate – residential | Real estate – farmland | Consumer | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| ACL, beginning of period | $5,767 | $2,057 | $540 | $5,963 | $7,933 | $18 | $745 | $23,023 |
| (Recovery of) provision for credit losses - loans | (42) | (785) | (142) | (359) | 184 | (3) | 447 | (700) |
| Charge-offs | (4,661) | — | — | (63) | (123) | — | (1,035) | (5,882) |
| Recoveries | 4,782 | — | — | 338 | 7 | — | 406 | 5,533 |
| Net recoveries (charge-offs) | 121 | — | — | 275 | (116) | — | (629) | (349) |
| ACL, end of period | $5,846 | $1,272 | $398 | $5,879 | $8,001 | $15 | $563 | $21,974 |
| Ratio of net recoveries (charge-offs) to average loans outstanding | -0.14% | 0.00% | 0.00% | -0.14% | 0.07% | 0.00% | 5.86% | 0.07% |
|  | **For the six months ended June 30, 2024** |  |  |  |  |  |  |  |
| (Dollars in thousands) | **Commercial and industrial** | **Real estate – construction, commercial** | **Real estate – construction, residential** | **Real estate – commercial** | **Real estate – residential** | **Real estate – farmland** | **Consumer** | **Total** |
| ACL, beginning of period | $13,787 | $4,024 | $1,094 | $9,929 | $6,286 | $15 | $758 | $35,893 |
| Provision for (recovery of) credit losses - loans | 3,708 | (836) | (318) | 333 | (18) | 3 | 728 | 3,600 |
| Charge-offs | (13,939) | — | (39) | — | (44) | — | (1,290) | (15,312) |
| Recoveries | 3,360 | — | — | — | 16 | — | 479 | 3,855 |
| Net charge-offs | (10,579) | — | (39) | — | (28) | — | (811) | (11,457) |
| ACL, end of period | $6,916 | $3,188 | $737 | $10,262 | $6,240 | $18 | $675 | $28,036 |
| Ratio of net charge-offs to average loans outstanding | 8.52% | 0.00% | 0.23% | 0.00% | 0.02% | 0.00% | 5.64% | 1.93% |

The ACL includes specific reserves for individually evaluated loans and a general allowance applicable to all loan categories; however, management has allocated the ACL by loan type to provide an indication of the relative risk characteristics of the loan portfolio. The allocation is an estimate and should not be interpreted as an indication that charge-offs will occur in these amounts, or that the allocation indicates future trends, and does not restrict the usage of the allowance for any specific loan or category. The following table presents the allocation of the ACL by loan category and the percentage of loans in each category to total loans as of the dates stated.

*(Dollars in thousands)*

|  | June 30, 2025 ACL Amount | % of Loans | December 31, 2024 ACL Amount | % of Loans |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $5,846 | 16.4% | $5,767 | 16.8% |
| Real estate – construction, commercial | 1,272 | 4.0% | 2,057 | 5.4% |
| Real estate – construction, residential | 398 | 2.6% | 540 | 2.4% |
| Real estate – commercial | 5,879 | 41.1% | 5,963 | 40.2% |
| Real estate – residential | 8,001 | 33.9% | 7,933 | 32.8% |
| Real estate – farmland | 15 | 0.2% | 18 | 0.3% |
| Consumer | 563 | 1.8% | 745 | 2.1% |
| Total | $21,974 | 100.0% | $23,023 | 100.0% |

*Nonperforming Assets.* The following table presents a summary of nonperforming assets and various measures as of the dates stated.

*(Dollars in thousands)*

|  | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Nonaccrual loans held for investment | $22,106 | $22,957 |
| Loans past due 90 days and still accruing | 1,881 | 2,486 |
| Total nonperforming loans | $23,987 | $25,443 |
| Other real estate owned ("OREO") (1) | — | 279 |
| Other non-real estate owned (1) | 222 | — |
| Total nonperforming assets | $24,209 | $25,722 |
| Loans held for sale | $12,380 | $30,976 |
| Loans held for investment | 1,978,585 | 2,111,797 |
| Total loans | $1,990,965 | $2,142,773 |
| Total assets | $2,555,439 | $2,737,260 |
| ACL on loans held for investment | $21,974 | $23,023 |
| ACL to loans held for investment | 1.11% | 1.09% |
| ACL to nonaccrual loans | 99.40% | 100.29% |
| ACL to nonperforming loans | 91.61% | 90.49% |
| Nonaccrual loans to loans held for investment | 1.12% | 1.09% |
| Nonperforming loans to loans held for investment | 1.20% | 1.20% |
| Nonperforming loans to total assets | 0.94% | 0.93% |
| Nonperforming assets to total assets | 0.95% | 0.94% |
| (1) Included in other assets on the consolidated balance sheets. |  |  |

Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past due less than 90 days and the borrower demonstrates the ability to pay and remain current. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company's policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not be placed on nonaccrual status, if the Company determines that the loans are well-secured and are in the process of collection. OREO includes properties that have been substantively repossessed or acquired in complete or partial satisfaction of debt. Such properties, which are held for resale, are initially stated at fair value, including a reduction for the estimated selling expenses, which becomes the carrying value. In subsequent periods, such properties are stated at the lower of the restated carrying value or fair value.

*Investment Securities.* The investment portfolio is used as a source of interest income, credit risk diversification, and liquidity, as well as to manage interest rate sensitivity and provide collateral for short-term borrowings. Securities in the investment portfolio classified as securities available for sale ("AFS") may be sold in response to changes in market interest rates, securities’ prepayment risk, liquidity needs, and other similar factors, and are carried at estimated fair value. The fair value of the Company’s AFS investment securities portfolio was $328.0 million as of June 30, 2025, an increase of $15.9 million from $312.0 million at December 31, 2024, primarily due to the purchase of securities in the first half of 2025. As a result of elevated market interest rates, the Company’s portfolio of AFS securities had unrealized losses of approximately $50.1 million and $55.5 million as of June 30, 2025 and December 31, 2024, respectively, of which approximately 82% and 81%, respectively, were related to securities backed by U.S. government agencies as of the same dates.

As of June 30, 2025 and December 31, 2024, the majority of the investment securities portfolio consisted of securities rated investment grade by a leading rating agency. Investment grade securities are judged to have a low risk of default, to be of the best quality, and to carry the smallest degree of investment risk. At June 30, 2025 and December 31, 2024, securities with a fair value of $177.0 million and $268.9 million, respectively, were pledged to secure the Bank’s borrowing facility with the Federal Home Loan Bank of Atlanta ("FHLB"). As of June 30, 2025 and December 31, 2024, the Company had pledged securities with a fair value of $0 and $16.3 million, respectively, as collateral for the Federal Reserve Bank of Richmond ("FRB") Discount Window. The decline in pledged securities as of June 30, 2025 from December 31, 2024 at both FHLB and FRB reflects the release of securities held as collateral.

The Company reviews its AFS investment securities portfolio for potential credit losses at least quarterly. AFS investment securities with unrealized losses are generally a result of pricing changes due to changes in the current interest rate environment and not as a result of permanent credit impairment. The Company does not intend to sell nor does it believe that it will be required to sell, any of its impaired securities prior to the recovery of the amortized cost. No ACL has been recognized for AFS securities as of both June 30, 2025 and December 31, 2024.

Restricted equity investments consisted of stock in the FHLB (carrying basis $9.1 million and $9.4 million at June 30, 2025 and December 31, 2024, respectively), FRB stock (carrying value of $9.3 million and $9.4 million at June 30, 2025 and December 31, 2024, respectively), and stock in the Company’s correspondent bank (carrying value of $0.5 million at both June 30, 2025 and December 31, 2024). Restricted equity investments are carried at cost.

The Company has various other equity investments, including an investment in a fintech company and limited partnerships, totaling $4.6 million and $4.8 million as of June 30, 2025 and December 31, 2024, respectively.

The Company also holds investments in early-stage focused investment funds and low-income housing partnerships, which totaled $20.9 million and $19.4 million as of June 30, 2025 and December 31, 2024, respectively, and are reported in other investments on the consolidated balance sheets.

The following table presents the amortized cost of the investment portfolio by contractual maturities, as well as the weighted average yields for each of the maturity ranges as of and for the period stated. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

*(Dollars in thousands)*

| Securities available for sale | June 30, 2025 Within One Year Amortized Cost | Weighted Average Yield | One to Five Years Amortized Cost | Weighted Average Yield | Five to Ten Years Amortized Cost | Weighted Average Yield | Over Ten Years Amortized Cost | Weighted Average Yield | Total Amortized Cost |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Mortgage backed securities | $— | — | $1,254 | 2.79% | $13,472 | 2.15% | $196,959 | 2.37% | $211,685 |
| U. S. Treasury and agencies | 2,501 | 0.87% | 37,212 | 1.21% | 34,110 | 2.20% | 5,259 | 1.91% | 79,082 |
| State and municipal | 645 | 4.39% | 12,951 | 2.42% | 28,828 | 2.17% | 7,339 | 2.58% | 49,763 |
| Corporate bonds | — | — | 9,825 | 7.20% | 27,100 | 4.42% | 500 | 4.00% | 37,425 |
| Total | $3,146 |  | $61,242 |  | $103,510 |  | $210,057 |  | $377,955 |

*Deposits.* The principal sources of funds for the Company are deposits, including transaction accounts (demand deposits and money market accounts), time deposits, and savings accounts, of customers in the Company’s primary geographic market area. Such customers provide the Bank a source of fee income and cross-marketing opportunities and are generally a lower cost source of funding for the Bank.

In prior years, deposits sourced through fintech partnerships, inclusive of fintech BaaS deposits, were a significant source of deposits for the Company. In the fourth quarter of 2024, the Company completed the exit of its fintech BaaS deposit operations, thus substantially reducing its fintech-related deposit exposure to approximately 1.0% of deposits as of December 31, 2024, consisting of corporate accounts of a few companies in the fintech sector. As of June 30, 2025 and December 31, 2024, fintech-related deposits totaled $13.0 million and $21.3 million, respectively.

Brokered deposit balances are sourced through intermediaries and are an unsecured source of funding for the Bank. Brokered deposits were added throughout 2023 and early 2024 to enhance liquidity in light of financial industry events that began in March 2023 and in anticipation of the exit of the Company's fintech BaaS deposit operations. Brokered deposits represented approximately 14.7% and 18.5% of total deposits as of June 30, 2025 and December 31, 2024, respectively, which consisted entirely of time deposits at June 30, 2025. The Bank has a liquidity management program, with oversight by the Bank’s asset and liability committee (the “ALCO”), that sets forth guidelines for the desired maximum level of brokered deposits, which is 20.0% of total deposits. In recent quarters, the Company has reduced levels of brokered deposits and expects to continue to reduce levels in future periods to a level of 10.0% or less of total deposits. As certain brokered deposits have multiple-year terms, the Company expects brokered deposits to be a funding source for several years.

Total deposits decreased $169.2 million from $2.18 billion as of December 31, 2024 to $2.01 billion as of June 30, 2025, as:

- Deposits, excluding fintech-related and brokered deposits, decreased $54.4 million from approximately $1.76 billion as of December 31, 2024 to approximately $1.70 billion as of June 30, 2025;
- Brokered deposits decreased $106.4 million from approximately $402.5 million, or 18.5% of total deposits, as of December 31, 2024 to approximately $296.1 million, or 14.7% of total deposits, as of June 30, 2025; and
- Fintech-related deposits decreased $8.3 million from approximately $21.3 million as of December 31, 2024 to approximately $13.0 million as of June 30, 2025. Of the decline, fintech BaaS deposits decreased $0.2 million from December 31, 2024.

Estimated uninsured deposits totaled approximately $409.2 million as of June 30, 2025, or 20.4% of total deposits, compared to $399.3 million, or 18.0% of total deposits, as of December 31, 2024.

The following table presents a summary of average deposits and the weighted average rate paid for the periods stated.

*(Dollars in thousands)*

|  | For the six months ended June 30, 2025 Average Balance | Average Rate | June 30, 2024 Average Balance | Average Rate |
| --- | ---: | ---: | ---: | ---: |
| Noninterest-bearing demand | $449,743 | — | $507,619 | — |
| Interest-bearing: |  |  |  |  |
| Demand | 242,640 | 0.45% | 532,744 | 2.48% |
| Savings | 102,512 | 3.92% | 112,475 | 4.62% |
| Money market | 379,757 | 2.08% | 390,147 | 2.38% |
| Time | 947,238 | 4.32% | 975,637 | 4.49% |
| Total interest-bearing | $1,672,147 |  | $2,011,003 |  |
| Total average deposits | $2,121,890 |  | $2,518,622 |  |

The following table presents maturities of time deposits for certificate of deposits of $250 thousand or greater as of the dates stated.

*(Dollars in thousands)*

| Maturing in: | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| 3 months or less | $46,068 | $38,758 |
| Over 3 months through 6 months | 26,854 | 33,845 |
| Over 6 months through 12 months | 41,882 | 60,308 |
| Over 12 months | 26,211 | 31,117 |
|  | $141,015 | $164,028 |

47

*Borrowings.* The Company uses short-term and long-term borrowings from various sources, including FHLB advances and FRB advances, to fund assets and operations. The following tables present information on the balances and interest rates on borrowings as of and for the periods stated.

*(Dollars in thousands)*

|  | June 30, 2025 Period-End Balance | Highest Month-End Balance | Average Balance | Weighted Average Rate |
| --- | ---: | ---: | ---: | ---: |
| FHLB borrowings | $150,000 | $150,000 | $150,000 | 3.84% |
|  | **December 31, 2024** |  |  |  |
| (Dollars in thousands) | **Period-End Balance** | **Highest Month-End Balance** | **Average Balance** | **Weighted Average Rate** |
| FHLB borrowings | $150,000 | $280,000 | $213,003 | 4.27% |
| FRB borrowings | — | 65,000 | 23,087 | 4.68% |

FHLB advances are secured by collateral consisting of a blanket lien on qualifying pledged loans in the Company’s residential, multi-family, and commercial real estate mortgage loan portfolios, as well as select investment securities. FRB advances through the FRB Discount Window are secured by qualifying pledged construction and commercial and industrial loans.

The Company had $24.9 million and $39.8 million of subordinated notes, net, outstanding as of June 30, 2025 and December 31, 2024, respectively. Prior to June 1, 2025, the Company's subordinated notes had been comprised of a $15 million issuance in May 2020 maturing June 1, 2030 (the “2030 Note”) and a $25 million issuance in October 2019 maturing October 15, 2029 (the “2029 Notes”).

On June 1, 2025, the Company completed the $15.0 million redemption of the 2030 Note. The interest rate on the 2030 Note was 6.0% up to the redemption date. Interest expense on the 2030 Note was $0.2 million for both the three months ended June 30, 2025 and 2024, respectively, and $0.4 million and $0.5 million for the six months ended June 30, 2025 and 2024, respectively.

The 2029 Notes bore interest at 5.625% per annum, through October 14, 2024, payable semi-annually in arrears. From October 15, 2024 through October 15, 2029, or up to an early redemption date, the interest rate resets quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Funding Rate ("SOFR") plus 433.5 basis points, payable quarterly in arrears. As of June 30, 2025, the 2029 Notes bore an annual interest rate of 8.59%. As of June 30, 2025, the net carrying amount of the 2029 Notes was $24.9 million, inclusive of a $0.4 million purchase accounting adjustment (premium). For the three months ended June 30, 2025 and 2024, the effective interest rate on the 2029 Notes was 7.86% and 5.08%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium). For the six months ended June 30, 2025 and 2024, the effective interest rate on the 2029 Notes was 7.96% and 5.15%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).

On June 2, 2025, the Company provided to the holders of its 2029 Notes a notice of partial redemption at the next interest payment date, July 15, 2025. On July 15, 2025, the Company completed the redemption of $10.0 million of the 2029 Notes.

*Liquidity*. Liquidity is essential to the Company’s business. The Company’s liquidity could be impaired by unforeseen outflows of cash, including deposits, or the inability to access the capital and/or wholesale funding markets. This situation may arise due to circumstances that the Company may be unable to control, such as general market disruption, negative views about the Company or the financial services industry generally, or an operational problem that affects the Company or a third party. The Company’s ability to borrow from other financial institutions on favorable terms or at all could be adversely affected by disruptions in the markets in which they operate or other events.

Deposits are the primary source of the Company’s liquidity. Cash flows from amortizing or maturing assets also provide funding to meet the liquidity needs of the Company. Deposits are sourced from the Bank’s customers and, as needed, through brokered deposit markets. The brokered deposit markets are accessed through brokers or through the IntraFi Network (“IntraFi”), of which the Bank is a member. IntraFi facilitates the Bank attaining brokered deposits via an on-line marketplace. The Bank also utilizes IntraFi's reciprocal deposit services to offer its high-value customers access to Federal Deposit Insurance Corporation ("FDIC") insurance through IntraFi's network of banks.

While subject to the Consent Order, the Bank may not be deemed to be “well capitalized,” which restricts it from accepting, renewing, or rolling over brokered deposits except in compliance with certain applicable restrictions under federal law. The Bank received approvals from the FDIC allowing the Bank to accept, renew, or rollover brokered deposits for consecutive six-month periods through December 2025 and limited to the amount of maturities during these periods. The Company expects to continue to seek waivers of this prohibition in the future; however, there is no assurance that such waivers will be approved or that the Company will be able to rely on brokered deposits as a source of funding in the future.

The Company has established a formal liquidity contingency plan that provides guidelines for liquidity management. Pursuant to the Company’s liquidity contingency plan, liquidity needs are forecasted based on anticipated changes in the balance sheet. In this forecast, the Company expects to maintain a liquidity cushion. Management then stress tests the Company’s liquidity position under several different stress scenarios, from moderate to severe. Guidelines for the forecasted liquidity cushion and for liquidity cushions for each stress scenario have been established and are reviewed by the Bank's ALCO. Management also monitors the Company’s liquidity position on a day-to-day basis through daily cash monitoring and short- and long-term cash flow forecasting and believes its sources of liquidity are adequate to conduct the business of the Company.

The following table presents information on the available sources of liquidity as of the date stated.

*(Dollars in thousands)*

|  | Capacity | Less: Outstanding Borrowings |  | Available Balance |
| --- | ---: | ---: | ---: | ---: |
| Cash and due from banks |  |  |  | $131,199 |
| Fed funds sold |  |  |  | 628 |
| Unpledged securities available for sale |  |  |  | 150,936 |
| Total |  |  |  | $282,763 |
| Borrowings |  |  |  |  |
| FHLB | $583,344 | $201,160 | (1) | $382,184 |
| FRB | 75,060 | — |  | 75,060 |
| Unsecured line of credit | 10,000 | — |  | 10,000 |
| Total | $668,404 | $201,160 |  | $467,244 |
| Available liquidity as of June 30, 2025 |  |  |  | $750,007 |
| (1) Outstanding borrowings are comprised of advances of $150.0 million and letters of credit totaling $51.2 million, of which $50.0 million served as collateral for public deposits with the Treasury Board of the Commonwealth of Virginia. |  |  |  |  |

Uninsured deposits at June 30, 2025 were $409.2 million. In the unlikely event that uninsured deposit balances leave the Bank over a short period of time, management could more than satisfy the demand with cash on-hand and FHLB borrowing capacity.

*Capital.* Capital adequacy is an important measure of financial stability and performance. The Company’s objectives are to maintain a level of capitalization that is sufficient to support the Company's strategic objectives.

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. A financial institution's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Banks must hold a capital conservation buffer of 2.50% above the adequately capitalized risk-based capital ratios for all ratios except the Tier 1 leverage ratio. If a banking organization dips into its capital conservation buffer, it is subject to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers. Additionally, regulators may place certain restrictions on dividends paid by banks.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized; although, these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

The Consent Order requires the Bank to achieve and maintain minimum capital requirements that are higher than those required for capital adequacy purposes. Specifically, the Bank is required to maintain a leverage ratio of 10.0% and a total capital ratio of 13.0%. As of June 30, 2025 and December 31, 2024, the Bank met these minimum capital ratios. Until the Bank has been released from the Consent Order, the Bank is deemed to be less than well capitalized, thus adequately capitalized.

Because the Bank may not be deemed to be “well capitalized” while subject to the Consent Order, it could be required to pay higher insurance premiums to the FDIC, obtain approval prior to acquiring branches or opening new lines of business, and be subject to increased regulatory scrutiny such as limitations on asset growth.

The Company adopted ASC 326, Financial Instruments - Credit Losses (referred to herein as "current expected credit losses" or "CECL") effective January 1, 2023. Federal and state banking regulations allow financial institutions to irrevocably elect to phase-in the after-tax cumulative effect adjustment at adoption to retained earnings (“CECL Transitional Amount”) over a three-year period. The three-year phase-in of the CECL Transitional Amount to regulatory capital is 25%, 50%, and 25% in 2023, 2024, and 2025, respectively. The Bank made this irrevocable election effective with its first quarter 2023 call report.

The following tables present the capital ratios to which banks are subject to be adequately and well capitalized, as well as the capital and capital ratios for the Bank as of the dates stated. Adequately capitalized ratios include the conversation buffer, if applicable. The following table also includes the capital adequacy ratios to which bank holding companies are subject. Also presented are the minimum capital ratios set forth in the Consent Order for the Bank with the corresponding capital amounts for both the leverage ratio and the total capital ratio as of both June 30, 2025 and December 31, 2024. The CECL Transitional Amount was $8.1 million, of which $6.1 million and $4.1 million reduced the regulatory capital amounts and capital ratios as of June 30, 2025 and December 31, 2024, respectively.

*(Dollars in thousands)*

| Total risk based capital (to risk-weighted assets) | June 30, 2025 Actual Amount | Ratio | For Capital Adequacy Purposes Amount | Ratio | To Be Well Capitalized Amount | Ratio | Minimum Capital Ratios Amount | Ratio |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | --- | --- |
| Blue Ridge Bank, N.A. | $361,482 | 18.90% | $200,823 | 10.50% | $191,260 | 10.00% | $248,638 | 13.00% |
| Blue Ridge Bankshares, Inc. | $412,164 | 21.37% | $154,296 | 8.00% | n/a | n/a | n/a | n/a |
| Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |
| Blue Ridge Bank, N.A. | $341,443 | 17.86% | $162,501 | 8.50% | $152,942 | 8.00% | n/a | n/a |
| Blue Ridge Bankshares, Inc. | $372,097 | 19.29% | $115,738 | 6.00% | n/a | n/a | n/a | n/a |
| Common equity tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |
| Blue Ridge Bank, N.A. | $341,443 | 17.86% | $133,824 | 7.00% | $124,265 | 6.50% | n/a | n/a |
| Blue Ridge Bankshares, Inc. | $372,097 | 19.29% | $86,803 | 4.50% | n/a | n/a | n/a | n/a |
| Tier 1 leverage (to average assets) |  |  |  |  |  |  |  |  |
| Blue Ridge Bank, N.A. | $341,443 | 12.89% | $105,956 | 4.00% | $132,445 | 5.00% | $264,890 | 10.00% |
| Blue Ridge Bankshares, Inc. | $372,097 | 13.93% | $106,848 | 4.00% | n/a | n/a | n/a | n/a |

*(Dollars in thousands)*

| Total risk based capital (to risk-weighted assets) | December 31, 2024 Actual Amount | Ratio | For Capital Adequacy Purposes Amount | Ratio | To Be Well Capitalized Amount | Ratio | Minimum Capital Ratios Amount | Ratio |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | --- | --- |
| Blue Ridge Bank, N.A. | $358,848 | 17.26% | $218,260 | 10.50% | $207,866 | 10.00% | $270,226 | 13.00% |
| Blue Ridge Bankshares, Inc. | $414,284 | 19.79% | $167,444 | 8.00% | n/a | n/a | n/a | n/a |
| Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |
| Blue Ridge Bank, N.A. | $340,386 | 16.38% | $176,687 | 8.50% | $166,293 | 8.00% | n/a | n/a |
| Blue Ridge Bankshares, Inc. | $360,933 | 17.24% | $125,583 | 6.00% | n/a | n/a | n/a | n/a |
| Common equity tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |
| Blue Ridge Bank, N.A. | $340,386 | 16.38% | $145,507 | 7.00% | $135,113 | 6.50% | n/a | n/a |
| Blue Ridge Bankshares, Inc. | $360,933 | 17.24% | $94,187 | 4.50% | n/a | n/a | n/a | n/a |
| Tier 1 leverage (to average assets) |  |  |  |  |  |  |  |  |
| Blue Ridge Bank, N.A. | $340,386 | 11.80% | $115,364 | 4.00% | $144,204 | 5.00% | $288,409 | 10.00% |
| Blue Ridge Bankshares, Inc. | $360,933 | 12.43% | $116,169 | 4.00% | n/a | n/a | n/a | n/a |

50

### Commitments and Contingencies

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract and involve the same credit risk and evaluation as making a loan to a customer. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis, in a manner similar to that if underwriting a loan. As of June 30, 2025 and December 31, 2024, the Company had outstanding loan commitments of $273.8 million and $283.2 million, respectively. Of these amounts, $111.4 million and $108.4 million were unconditionally cancelable at the sole discretion of the Company as of the same respective dates.

Conditional commitments are issued by the Company in the form of financial stand-by letters of credit, which guarantee payment to the underlying beneficiary (i.e., third party) if the customer fails to meet its designated financial obligation. As of June 30, 2025 and December 31, 2024, commitments under outstanding financial stand-by letters of credit totaled $13.5 million and $12.5 million, respectively. The credit risk of issuing stand-by letters of credit can be greater than the risk involved in extending loans to customers.

The Company recorded no provision for credit losses for unfunded commitments for either the three months or six months ended June 30, 2025. As of both June 30, 2025 and December 31, 2024, the reserve for unfunded commitments was $0.9 million and is included in other liabilities on the consolidated balance sheets.

As part of the sale of substantially all of its MSR portfolio during 2024, the Company recorded a reserve for estimated putbacks, transition costs, and unearned sales proceeds. The putbacks relate to industry-standard items, including prepayments or early delinquencies of the underlying mortgages, all of which are subject to term limits per the respective sales agreements. The reserve for unearned sales proceeds relates to the Company providing certain documentation to the buyers. During the second quarter of 2025, the Company received $0.3 million of previously unearned sale proceeds, which resulted in a corresponding release of the reserve. As of June 30, 2025 and December 31, 2024, the reserve was $1.4 million and $1.8 million, respectively, and was included in other liabilities on the consolidated balance sheet.

The Company has investments in various partnerships and limited liability companies. Pursuant to these investments, the Company commits to an investment amount that may be fulfilled in future periods. At June 30, 2025, the Company had future commitments outstanding totaling $5.6 million related to these investments.

### Interest Rate Risk Management

As a financial institution, the Company is exposed to various business risks, including interest rate risk. Interest rate risk is the risk to earnings and value arising from volatility in market interest rates. Interest rate risk arises from timing differences in the repricing and cash flows of interest-earning assets and interest-bearing liabilities, changes in the expected cash flows of assets and liabilities arising from embedded options, such as borrowers' ability to prepay loans and depositors' ability to redeem certificates of deposit before maturity, changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion, and changes in spread relationships between different yield curves, such as U.S. Treasuries and other market-based index rates. The Company’s goal is to maximize net interest income without incurring excessive interest rate risk. Management of net interest income and interest rate risk must be consistent with the level of capital and liquidity that the Bank maintains. The Company manages interest rate risk through the ALCO comprised of members of management, with oversight by a committee of its board of directors. The ALCO is responsible for monitoring the Company’s interest rate risk in conjunction with liquidity and capital management, pursuant to policy guidelines approved by the board of directors.

The Company employs an independent firm to model its interest rate sensitivity that uses a net interest income simulation model as its primary tool to measure interest rate sensitivity. Assumptions for modeling are developed based on expected activity in the balance sheet. For maturing assets, assumptions are created for the redeployment of these assets. For maturing liabilities, assumptions are developed for the replacement of these funding sources. Assumptions are also developed for assets and liabilities that could reprice during the modeled time period. These assumptions also cover how management expects rates to change on non-maturity deposits, such as interest checking, money market checking, savings accounts, as well as certificates of deposit. Based on inputs that include the current balance sheet, the current level of interest rates, and the developed assumptions, the model produces an expected level of net interest income assuming that market rates remain unchanged. This is considered the base case. The model then simulates what net interest income would be based on specific changes in interest rates. The rate simulations are performed for a two-year period and include rapid rate changes of down 100 basis points to 400 basis points and up 100 basis points to 400 basis points. The results of these simulations are then compared to the base case.

The following tables present the estimated change in net interest income under various rate change scenarios as of the dates presented. The scenarios assume rate changes occur instantaneous and in a parallel manner, which means the changes are the same on all points of the rate curve. Estimated changes set forth below are dependent on material assumptions, such as those previously discussed.

| Change in interest rates: | June 30, 2025 Instantaneous Parallel Rate Shock Scenario Change in Net Interest Income - Year 1 |  | Change in Net Interest Income - Year 2 |  |
| --- | ---: | ---: | ---: | ---: |
| +400 basis points | $453 | 0.6% | $2,814 | 3.2% |
| +300 basis points | 1,295 | 1.6% | 3,126 | 3.6% |
| +200 basis points | 1,537 | 1.9% | 2,866 | 3.3% |
| +100 basis points | 1,135 | 1.4% | 1,911 | 2.2% |
| Base case |  |  |  |  |
| -100 basis points | (2,428) | (3.0%) | (3,632) | (4.2%) |
| -200 basis points | (5,367) | (6.7%) | (8,301) | (9.5%) |
| -300 basis points | (7,936) | (9.9%) | (12,343) | (14.2%) |
| -400 basis points | (10,378) | (12.9%) | (16,072) | (18.4%) |

| Change in interest rates: | December 31, 2024 Instantaneous Parallel Rate Shock Scenario Change in Net Interest Income - Year 1 |  | Change in Net Interest Income - Year 2 |  |
| --- | ---: | ---: | ---: | ---: |
| +400 basis points | $3,288 | 3.8% | $6,628 | 6.7% |
| +300 basis points | 3,347 | 3.8% | 5,842 | 5.9% |
| +200 basis points | 2,877 | 3.3% | 4,610 | 4.7% |
| +100 basis points | 1,798 | 2.1% | 2,751 | 2.8% |
| Base case |  |  |  |  |
| -100 basis points | (2,978) | (3.4%) | (4,205) | (4.3%) |
| -200 basis points | (6,468) | (7.4%) | (9,650) | (9.8%) |
| -300 basis points | (9,831) | (11.2%) | (15,174) | (15.4%) |
| -400 basis points | (12,664) | (14.5%) | (19,666) | (20.0%) |

Stress testing the balance sheet and net interest income using instantaneous parallel rate shock movements in the yield curve is a regulatory and banking industry practice. However, these stress tests may not represent a realistic forecast of future interest rate movements in the yield curve. In addition, instantaneous parallel rate shock modeling is not a predictor of actual future performance of earnings. It is a financial metric used to manage interest rate risk and track the movement of the Company’s interest rate risk position over a historical time frame for comparison purposes.

The asset and liability repricing characteristics of the Company’s assets and liabilities will have a significant impact on its future interest rate risk profile.

## Market risk

As filed, 244 characters.

This information is incorporated herein by reference to the information in section "Interest Rate Risk Management" within Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-Q.

## Controls and procedures

As filed, 1,422 characters.

### Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods required by the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2025 was carried out under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer. Based on and as of the date of such evaluation, the aforementioned officers concluded that the Company’s disclosure controls and procedures were effective.

The Company’s management is also responsible for establishing and maintaining adequate internal control over financial reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

## Risk factors

As filed, 387 characters.

There have been no material changes to the risk factors disclosed in the 2024 Form 10-K. Additional risks not presently known to the Company, or that are currently deemed immaterial, may also adversely affect the Company's business, financial condition, or results of operations. See also “Cautionary Note About Forward-Looking Statements,” included in Part 1, Item 2, of this Form 10-Q.

Filed Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-104110. Last ingested by Listed: Nov 3, 2026, 11:03 ET. No prices; not investment advice.