Blue Ridge Bankshares (BRBS) Q2 2024 earnings summary

Executive summary

• Reported a Q2 2024 net loss of $11.4 million ($0.47 per diluted share) and a first half 2024 net loss of $14.3 million, driven by an $8.5 million fintech investment impairment and regulatory remediation costs.

• Total assets decreased to $2.93 billion as of June 30, 2024, mainly due to a $171.7 million reduction in loans held for investment as fintech BaaS operations wind down.

• Completed $161.6 million in private placements, significantly increasing stockholders' equity and supporting capital ratios above regulatory minimums.

• On track to exit fintech depository operations, with BaaS deposits now 7% of total deposits, down from 21% a year ago.

• Asset quality improved, with nonperforming assets at the lowest level in four quarters.

Financial highlights

• Net interest income for Q2 2024 was $20.1 million, down from $23.9 million in Q2 2023; net interest margin was 2.79%, down from 3.12% in Q2 2023.

• Provision for credit losses was $3.1 million in Q2 2024, down from $10.0 million in Q2 2023, reflecting lower reserve needs and a large charge-off for a specialty finance loan.

• Noninterest income dropped to $0.3 million due to an $8.5 million impairment on a fintech investment.

• Noninterest expense decreased to $29.3 million, mainly from lower legal, regulatory, and contractual services costs.

• Allowance for credit losses to loans held for investment was 1.24%, down from 1.46% in Q1 2024.

Outlook and guidance

• Management expects continued asset reduction as BaaS operations are wound down, with BaaS deposits anticipated to be insignificant by year-end 2024.

• Proceeds from private placements will support organic growth, repositioning of business lines, and compliance with heightened capital requirements.

• Anticipates further decline in cost of deposits in the second half of 2024 as BaaS operations wind down.

• Focus shifting from remediation to operational improvements and profitable growth.