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What changed in BLUE RIDGE BANKSHARES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BLUE RIDGE BANKSHARES, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+411 added−471 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-10)

Top changes in BLUE RIDGE BANKSHARES, INC.'s 2025 10-K

411 paragraphs added · 471 removed · 313 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

64 edited+23 added−42 removed93 unchanged
Biggest changeIn determining whether to approve a proposed merger transaction, the OCC must consider the effect on competition, the financial and managerial resources and future prospects of the existing and resulting institutions, the convenience and needs of the communities to be served, and the effectiveness of each insured depository institution involved in the proposed merger transaction in combating money-laundering activities.
Biggest changeIn determining whether to approve a proposed merger transaction, the OCC must consider the effect on competition, the financial and managerial resources and future prospects of the existing and resulting institutions, the convenience and needs of the communities to be served, and the effectiveness of each insured depository institution involved in the proposed merger transaction in combating money-laundering activities. 7 In addition, Virginia law requires the prior approval of the Virginia SCC for (i) the acquisition of more than 5% of the voting shares of a Virginia bank or any holding company that controls a Virginia bank, or (ii) the acquisition by a Virginia bank holding company of a bank or its holding company domiciled outside Virginia.
The Basel III Capital Rules require the Company and the Bank to comply with the following minimum capital ratios: (i) a ratio of common equity Tier 1 6 to risk-weighted assets of at least 4.50%, plus a 2.50% capital conservation buffer (resulting in a minimum common equity Tier 1 ratio of 7.00%), (ii) a ratio of Tier 1 capital to risk-weighted assets of at least 6.00%, plus the 2.50% capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.50%), (iii) a ratio of total capital to risk-weighted assets of at least 8.00%, plus the 2.50% capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.50%), and (iv) a leverage ratio of 4.00%, calculated as the ratio of Tier 1 capital to average assets ("Tier 1 leverage ratio").
The Basel III Capital Rules require the Company and the Bank to comply with the following minimum capital ratios: (i) a ratio of common equity Tier 1 to risk-weighted assets of at least 4.50%, plus a 2.50% capital conservation buffer (resulting in a minimum common equity Tier 1 ratio of 7.00%), (ii) a ratio of Tier 1 capital to risk-weighted assets of at least 6.00%, plus the 2.50% capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.50%), (iii) a ratio of total capital to risk-weighted assets of at least 8.00%, plus the 2.50% capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.50%), and (iv) a leverage ratio of 4.00%, calculated as the ratio of Tier 1 capital to average assets ("Tier 1 leverage ratio").
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, laws governing flood insurance, federal and state laws prohibiting unfair and deceptive business practices, foreclosure laws, and various regulations that implement some or all of the foregoing.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the 8 Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, laws governing flood insurance, federal and state laws prohibiting unfair and deceptive business practices, foreclosure laws, and various regulations that implement some or all of the foregoing.
Management believes that the Company's compensation programs offer competitive salaries and performance-based bonuses, and a comprehensive benefits package including paid time off, 4 health, dental, and vision coverage, disability insurance, paid parental leave, and a 401(k) retirement plan. The Company goes beyond compensation by investing in its employees' growth and development through professional development programs, ongoing training, and tuition reimbursement.
Management believes that the Company's compensation programs offer competitive salaries and performance-based bonuses, and a comprehensive benefits package including paid time off, health, dental, and vision coverage, disability insurance, paid parental leave, and a 401(k) retirement plan. The Company goes beyond compensation by investing in its employees' growth and development through professional development programs, ongoing training, and tuition reimbursement.
Qualified mortgages that are “higher-priced” (e.g., subprime loans) garner a rebuttable presumption of compliance with the ability-to-repay rules, while qualified mortgages that are not “higher-priced” (e.g., prime loans) are given a safe harbor of compliance. The Company is predominantly an originator of compliant qualified mortgages. 11 Cybersecurity In March 2015, federal regulators issued two related statements regarding cybersecurity.
Qualified mortgages that are “higher-priced” (e.g., subprime loans) garner a rebuttable presumption of compliance with the ability-to-repay rules, while qualified mortgages that are not “higher-priced” (e.g., prime loans) are given a safe harbor of compliance. The Company is predominantly an originator of compliant qualified mortgages. Cybersecurity In March 2015, federal regulators issued two related statements regarding cybersecurity.
SRCs have reduced disclosure obligations, such as the ability to provide simplified executive compensation information and only two years of audited financial statements. The principal executive offices of the Company are located at 1801 Bayberry Court, Suite 101, Richmond, Virginia 23226, and its telephone number is (888) 331-6521.
SRCs have reduced disclosure obligations, such as the ability to provide simplified executive compensation information and only two years of audited financial statements. 2 The principal executive offices of the Company are located at 1801 Bayberry Court, Suite 101, Richmond, Virginia 23226, and its telephone number is (888) 331-6521.
The Company believes that its competitive pricing, personalized service, and community involvement enable it to effectively compete in the communities in which it operates. Governance, Social, and Human Capital The Company operates under a governance structure that starts with an independent chairman of the board of directors of the Company who is independent from management.
The Company believes that its competitive pricing, personalized service, and community involvement enable it to effectively compete in the communities in which it operates. Governance and Human Capital The Company operates under a governance structure that starts with an independent chairman of the board of directors who is independent from management.
In determining whether a particular activity is permissible, the Federal Reserve must consider whether the performance of such an activity reasonably can be expected to produce benefits to the public that outweigh possible adverse effects. Possible benefits include 7 greater convenience, increased competition, and gains in efficiency.
In determining whether a particular activity is permissible, the Federal Reserve must consider whether the performance of such an activity reasonably can be expected to produce benefits to the public that outweigh possible adverse effects. Possible benefits include greater convenience, increased competition, and gains in efficiency.
Federal and state regulatory agencies also periodically propose and adopt changes to their regulations or change the manner in which existing regulations are applied. The substance or impact of pending or future legislation or regulation, or the application thereof, cannot be predicted.
Federal and state regulatory agencies also periodically propose and adopt changes to their regulations or 11 change the manner in which existing regulations are applied. The substance or impact of pending or future legislation or regulation, or the application thereof, cannot be predicted.
The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption, and maintenance of the institution’s operations after a cyber-attack involving destructive malware.
The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption, and maintenance of the institution’s operations after a cyber-attack involving destructive 10 malware.
The Company qualifies as a "smaller reporting company” ("SRC") as defined in federal securities laws, and will remain a SRC until the fiscal year following the determination that the market value of its common stock held by non-affiliates is 2 more than $250 million measured on the last business day of its second fiscal quarter, or its annual revenues are less than $100 million during the most recently completed fiscal year and the market value of its common stock held by non-affiliates is more than $700 million measured on the last business day of its second fiscal quarter.
The Company qualifies as a "smaller reporting company" ("SRC") as defined in federal securities laws, and will remain a SRC until the fiscal year following the determination that the market value of its common stock held by non-affiliates is more than $250 million measured on the last business day of its second fiscal quarter, or its annual revenues are less than $100 million during the most recently completed fiscal year and the market value of its common stock held by non-affiliates is more than $700 million measured on the last business day of its second fiscal quarter.
The rule is 10 intended to give consumers control over their financial data, including with whom it is shared, and encourage competition in the provision of consumer financial products and services.
The rule is intended to give consumers control over their financial data, including with whom it is shared, and encourage competition in the provision of consumer financial products and services.
The Company has not elected to become a financial holding company and has no immediate plans to become a financial holding company. 5 Blue Ridge Bank, National Association The Bank is a federally chartered national bank.
The Company has not elected to become a financial holding company and has no immediate plans to become a financial holding company. Blue Ridge Bank, National Association The Bank is a federally chartered national bank.
In addition, those regulatory agencies may from time to time require that a banking organization maintain capital above the minimum levels because of its financial condition or actual or anticipated growth. The Bank is subject to the Basel III capital framework and certain related provisions of the Dodd-Frank Act (the “Basel III Capital Rules”).
In addition, these regulatory agencies may from time to time require that a banking organization maintain capital above the minimum levels because of its financial condition or actual or anticipated growth. The Bank is subject to the Basel III capital framework and certain related provisions of the Dodd-Frank Act (the “Basel III Capital Rules”).
Additionally, multiple states and Congress are considering laws or regulations which could create new individual privacy rights and impose increased obligations on companies handling personal data. The Company’s systems and those of its customers and third-party service providers are under constant threat.
Additionally, multiple states and U.S. Congress are considering laws or regulations which could create new individual privacy rights and impose increased obligations on companies handling personal data. The Company’s systems and those of its customers and third-party service providers are under constant threat.
As a bank holding company incorporated under the laws of the Commonwealth of Virginia, the Company is subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Bureau of Financial Institutions of the Virginia State Corporation Commission (the “Virginia SCC”). The Bank’s primary federal regulator is the the OCC.
Other Matters As a bank holding company incorporated under the laws of the Commonwealth of Virginia, the Company is subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Bureau of Financial Institutions of the Virginia State Corporation Commission (the “Virginia SCC”). The Bank’s primary federal regulator is the OCC.
At December 31, 2024, the Bank operated twenty-seven full-service banking offices across its footprint, which stretches from the Shenandoah Valley across the Piedmont region through Richmond and into the coastal peninsulas and the Hampton Roads region of Virginia and into central North Carolina.
At December 31, 2025, the Bank operated twenty-seven full-service banking offices across its footprint, which stretches from the Shenandoah Valley across the Piedmont region through Richmond and into the coastal peninsulas and the Hampton Roads region of Virginia and into central North Carolina.
On October 18, 2022, the FDIC adopted a final rule to increase base deposit insurance assessment rate schedules uniformly by 2 basis points beginning in the first quarterly assessment period of 2023.
On October 18, 2022, the FDIC adopted a final rule to increase base deposit insurance assessment rate schedules uniformly by two basis points beginning in the first quarterly assessment period of 2023.
Many of the Company’s competitors enjoy competitive advantages, including greater financial resources, a wider geographic presence, more accessible branch office locations, greater technology, the ability to offer additional services, more favorable pricing alternatives, and lower origination and operating costs.
Many of the Company’s competitors enjoy competitive advantages, including greater financial resources, a wider geographic presence, more accessible branch office locations, greater technology, the ability to offer additional services, lower regulatory compliance burden, more favorable pricing alternatives, and lower origination and operating costs.
The Bank has a designated CRA officer who monitors the Bank’s compliance under the CRA. Management believes in giving back to the communities in which the Company serves. In 2024, the Company committed approximately $279 thousand of financial donations to community and not-for-profit organizations, including first responders, colleges and universities, youth athletics, and the arts.
The Bank has a designated CRA Officer who monitors the Bank’s compliance under the CRA. Management believes in giving back to the communities in which the Company serves. In 2025, the Company committed approximately $265 thousand of financial donations to community and not-for-profit organizations, including first responders, colleges and universities, youth athletics, and the arts.
The Bank serves businesses, professionals, consumers, nonprofits, and municipalities with a wide variety of financial services, including retail and commercial banking, and mortgage banking lending.
The Bank serves businesses, professionals, consumers, nonprofits, and municipalities with a wide variety of financial services, including retail and commercial banking.
As of December 31, 2024, the Company had not been made aware of any instances of non-compliance with the guidance.
As of December 31, 2025, the Company had not been made aware of any instances of non-compliance with the guidance.
In October 2024, the CFPB adopted a new rule that requires financial services providers, such as the Bank, to make certain data available to consumers upon request regarding the products or services they obtain from the provider.
In October 2024, the Consumer Financial Protection Bureau ("CFPB") adopted a new rule that requires financial services providers, such as the Bank, to make certain data available to consumers upon request regarding the products or services they 9 obtain from the provider.
In addition, under the current supervisory practices of the Federal Reserve, the Company should inform and consult with the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings for the period (e.g., quarter) for which the dividend is being paid or that could result in a material adverse change to the Company’s capital structure.
In addition, under the current supervisory practices of the Federal Reserve, bank holding companies are expected to inform and consult with the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings for the period (e.g., quarter) for which the dividend is being paid or that could result in a material adverse change to a bank holding company's capital structure.
The Company’s commitment extends to creating a fair and respectful work environment where everyone can thrive and contribute to the Company’s shared success. The Company had 416 full-time and 18 part-time employees as of December 31, 2024. Supervision and Regulation The Company and the Bank are extensively regulated under federal and state law.
The Company’s commitment extends to creating a fair and respectful work environment where everyone can thrive and contribute to the Company’s shared success. The Company had 292 full-time and 10 part-time employees as of December 31, 2025. Supervision and Regulation The Company and the Bank are extensively regulated under federal and state laws.
The Company's other sources of revenue are interest and dividend income from investments, interest income from its interest-earning deposit balances in other depository institutions, mortgage banking income, transactions and fee income from its lending and deposit activities, including fintech activities, and income associated with wealth and trust management services.
The Company's primary source of revenue is interest income from its lending activities. The Company's other sources of revenue are interest and dividend income from investments, interest income from its interest-earning deposit balances in other depository institutions, transactions and fee income from its lending and deposit activities, and income associated with wealth and trust management services.
The Company believes effective oversight by the board of directors is an essential element of a financially sound and well-managed company. The board of directors establishes the Company’s risk philosophy, ensures that it has an appropriate risk-management framework, determines the overall business strategy, and monitors implementation of strategy. Employees operate under policies approved by the Company’s board of directors.
The Company believes effective oversight by the board of directors is an essential element of a financially sound and well-managed company. The board of directors establishes the Company’s risk philosophy, ensures that it has an appropriate risk-management framework, including a sound independent audit function, determines the overall business strategy, and monitors implementation of strategy.
In addition, the Company's employees donate countless hours volunteering in their communities, business associations, and helping the underserved. Management also believes that its employees are the cornerstone of the Company’s success. Their dedication, talent, and commitment are what drive the Company’s achievements.
In addition, during 2025 the Company's employees donated over 550 hours volunteering in their communities, business associations, and helping the underserved. Management believes that its employees are the cornerstone of the Company’s success. Their dedication, talent, and commitment are what drive the Company’s achievements.
As required by FDICIA, the federal bank regulatory agencies also have adopted guidelines prescribing safety and soundness standards relating to, among other things, internal controls and information systems, internal audit systems, loan 8 documentation, credit underwriting, and interest rate exposure.
As required by FDICIA, the federal bank regulatory agencies also have adopted guidelines prescribing safety and soundness standards relating to, among other things, internal controls and information systems, internal audit systems, loan documentation, credit underwriting, and interest rate exposure. In general, the guidelines require appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines.
In general, the guidelines require appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines. In addition, the agencies adopted regulations that authorize, but do not require, an institution that has been notified that it is not in compliance with safety and soundness standard to submit a compliance plan.
In addition, the agencies adopted regulations that authorize, but do not require, an institution that has been notified that it is not in compliance with safety and soundness standard to submit a compliance plan.
The Bank has not opted into the CBLR framework. As of December 31, 2024, the Bank's common equity Tier 1 capital ratio was 17.26%; its Tier 1 capital to risk-weighted asset ratio was 16.38%; its total capital to risk-weighted asset ratio was 16.38%; and the Bank's Tier 1 leverage ratio was 11.80%.
The Bank has not opted into the CBLR framework. As of December 31, 2025, the Bank's total capital to risk-weighted asset ratio was 19.16%; its Tier 1 capital ratio was 18.18%; its common equity Tier 1 capital ratio was 18.18%; and the Bank's Tier 1 leverage ratio was 13.04%.
Loans in this category include loans on real estate used for commercial purposes. Loans in this segment are underwritten in accordance with loan policy, which has guidelines to mitigate declines in real estate values, changes in the underlying cash flows from the properties, and general economic conditions. Commercial and Industrial Loans.
Loans in this segment are underwritten in accordance with loan policy, which has guidelines to mitigate declines in real estate values, changes in the underlying cash flows from the properties, and general economic conditions. Commercial and Industrial Loans. Loans in this category include business loans, asset-based loans, and other secured and unsecured loans and lines of credit.
At a special meeting of shareholders held June 20, 2024, the Company’s shareholders approved the Private Placements and 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.
In June 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.
Government securities, setting the reserve requirements of member banks, and establishing the discount rate on member bank borrowings. The policies of the Federal Reserve have a direct impact on loan and deposit growth and the interest rates charged and paid thereon. They also affect the source, cost of funds, and the rates of return on investments.
The policies of the Federal Reserve have a direct impact on loan and deposit growth and the interest rates charged and paid thereon. They also affect the source, cost of funds, and the rates of return on investments.
The Bank exceeded the threshold to be considered well capitalized as of December 31, 2024. As of December 31, 2024, the Company's common equity Tier 1 capital ratio was 19.79%; its Tier 1 capital to risk-weighted asset ratio was 17.24%; its total capital to risk-weighted asset ratio was 17.24%; and its Tier 1 leverage ratio was 12.43%.
The Bank exceeded the threshold to be considered well capitalized as of December 31, 2025. As of December 31, 2025, the Company's total capital to risk-weighted asset ratio was 20.69%; its Tier 1 capital ratio was 19.22%; its common equity Tier 1 capital ratio was 19.22%; and its Tier 1 leverage ratio was 13.81%.
A change in applicable laws, regulations or policies, or a change in the way such laws, regulations, or policies are interpreted by regulatory agencies or courts, may have a material impact on the business, operations, and earnings of the Company and the Bank.
A change in applicable laws, regulations or policies, or a change in the way such laws, regulations, or policies are interpreted by regulatory agencies or courts, may have a material impact on the business, operations, and earnings of the Company and the Bank. 4 As with other financial institutions, the earnings of the Bank are affected by general economic conditions and by the monetary policies of the Federal Reserve.
Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve,” or “substantial non-compliance.” The Bank was rated “satisfactory” in its most recent CRA evaluation. On October 24, 2023, the federal bank regulatory agencies issued a final rule to modernize their respective CRA regulations.
Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve,” or “substantial non-compliance.” The Bank was rated “satisfactory” in its most recent CRA evaluation.
Additionally, the Company upholds the highest workplace conduct standards and provides annual training on topics including, but not limited to, preventing harassment, workplace safety, ensuring data confidentiality, and maintaining ethical banking practices.
Employees operate under policies approved by the Company’s board of directors. Additionally, the Company upholds the highest workplace conduct standards and provides annual training on topics including, but not limited to, harassment prevention, workplace safety, data confidentiality, sound banking practices, and maintaining ethical practices.
The Company’s primary market area stretches from the Shenandoah Valley across the Piedmont region through Richmond and into the coastal peninsulas and the Hampton Roads region of Virginia and into central North Carolina. The Company’s retail mortgage operations are primarily in the Mid-Atlantic and Southern regions of the United States. Products and Services Mortgage Loans on Real Estate.
The Company’s primary market area stretches from the Shenandoah Valley across the Piedmont region through Richmond and into the coastal peninsulas and the Hampton Roads region of Virginia and into central North Carolina. Products and Services Mortgage Loans on Real Estate. The Company’s mortgage loans on real estate comprise the largest segment of its loan portfolio.
A depository institution may not pay any dividend if payment would cause the institution to become “undercapitalized” or if it already is “undercapitalized.” The OCC may prevent the payment of a dividend if it determines that the payment would be an unsafe and unsound banking practice.
In addition, a national bank may not pay a dividend if the payment would cause the institution to become “undercapitalized”, as defined by applicable regulations, if it already is “undercapitalized”, or if the OCC determines that the payment would constitute an unsafe and unsound banking practice.
The deposit insurance assessment base is based on average total assets minus average tangible equity, pursuant to a rule issued by the FDIC as required by the Dodd-Frank Act. Deposit insurance pricing is a “financial ratios method” based on “CAMELS” composite ratings to determine assessment rates for small established institutions with less than $10 billion in assets.
Deposit insurance pricing is a “financial ratios method” based on “CAMELS” composite ratings to determine assessment 5 rates for small established institutions with less than $10 billion in assets.
Small Business Administration ("SBA") guidelines and afford the Company guarantees under these programs. The guaranteed portion of SBA loans may be sold, in whole or in part, to secondary market buyers. 3 Consumer Loans. The Company’s consumer lending services include automobile lending, home equity lines of credit, credit cards, and other unsecured personal loans.
The guaranteed portion of SBA loans may be sold, in whole or in part, to secondary market buyers. Consumer Loans. Consumer lending services include automobile lending, home equity lines of credit, credit cards, and other unsecured personal loans. These consumer loans historically entail greater risk than loans secured by real estate. Consumer Deposit Services.
As a general rule, the amount of a dividend may not exceed, without prior regulatory approval, the sum of net income in the calendar year to date and the retained net earnings of the immediately preceding two calendar years.
Statutory and regulatory limitations apply to the Bank’s payment of dividends to the Company and the Company's payment of dividends to its shareholders. 6 As a general rule, without prior regulatory approval, the amount of dividends that a national bank may declare in any calendar year may not exceed the sum of its net income for that year to date and its retained net income for the immediately preceding two calendar years.
As of December 31, 2024, the Company had total assets of approximately $2.74 billion, total gross loans of approximately $2.11 billion, total deposits of approximately $2.18 billion, and stockholders’ equity of approximately $327.8 million. 1 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").
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").
In addition to the foregoing capital requirements, as set forth in the Consent Order, the Bank is subject to minimum capital ratios for Tier 1 leverage and total capital to risk-weighted assets that are higher than those required for capital adequacy purposes generally.
In addition to the foregoing capital requirements, and prior to the termination of the Consent Order in the fourth quarter of 2025, the Bank was subject to minimum capital ratios set forth in the Consent Order that were higher than those required for capital adequacy purposes generally.
The loans are then purchased by the fintech partner or other third-party within up to 15 days from origination. As of December 31, 2024, the Company offered indirect fintech lending services conducted through Upgrade, Inc., Best Egg, Inc., Kashable, LLC, and Grow Credit, Inc.
The Company provides indirect lending services through fintech partnerships. In these arrangements, the fintech partner sources the loans, which the Bank then originates. The loans are then purchased by the fintech partner or other third-party generally up to three days from origination. As of December 31, 2025, the Company offered indirect fintech lending services conducted through Upgrade, Inc.
The increase is being instituted to account for extraordinary growth in insured deposits during the first and second quarters of 2020, which caused a substantial decrease in the “reserve ratio” of the DIF to total industry deposits.
The increase was instituted to account for extraordinary growth in insured deposits during the first and second quarters of 2020, which caused a substantial decrease in the “reserve ratio” of the DIF to total industry deposits. The FDIC has indicated that the new assessment rate schedules will remain in effect until the DIF reserve ratio meets or exceeds two percent.
The Company’s mortgage loans on real estate comprise the largest segment of its loan portfolio. Mortgage loans on real estate include those on family residential properties, 1-4 family investment properties, home equity loans, commercial properties, and owner-occupied commercial properties. The Company also makes loans on properties under construction to qualified individuals and builders.
Mortgage loans on real estate include those on primary residential properties, multi-family investment properties, home equity loans, commercial properties, and owner-occupied commercial properties. Construction Loans. The Company also makes loans on properties under construction to qualified individuals and builders. These loans are for the construction period and funds are disbursed as construction progresses and verified by the Company.
Among the criteria for determining the borrower’s ability to repay is a cash flow analysis of the business and business collateral. Small Business Administration Loans. Loans in this category provide the Bank's customers access to capital and provide more flexible terms as compared to conventional commercial loans. Loans in this category are underwritten pursuant to U.S.
Loans in this category provide the Bank's customers access to capital and provide more flexible terms as compared to conventional commercial loans. Loans in this category are underwritten pursuant to U.S. Small Business Administration ("SBA") guidelines and afford the Company guarantees under these programs.
Deposits of the Bank are insured by the Deposit Insurance Fund (the “DIF”) of the Federal Deposit Insurance Corporation (“FDIC”) to the full extent of the limits of the DIF. The Company, through the Financial Group, offers investment and wealth management and management services for personal and corporate trusts, including estate planning, estate settlement, trust administration, and life insurance products.
The Company, through the Financial Group, offers investment and wealth management services and management services for personal and corporate trusts, including estate planning, estate settlement, trust administration, and life insurance products. 3 Competition The financial services industry is highly competitive.
The Company's major expenses are interest on deposits and general and administrative expenses, such as employee salaries and benefits, FDIC assessments, data processing expenses, technology costs, and professional services expenses.
The Company's major expenses are interest on deposits and general and administrative expenses, such as employee salaries and benefits, FDIC assessments, data processing expenses, technology costs, and professional services expenses. The Company historically had partnerships with financial technology ("fintech") providers, through which it provided indirect depository services (referred to as banking-as-a-service or "BaaS") to both consumers and businesses.
During 2024, the Company, through an orderly wind down, exited its BaaS depository operations; therefore, as of December 31, 2024, the Company had no active end-users attained through fintech channels. At the end of 2023, the Bank had active fintech BaaS partnerships, which included Unit Finance, Inc. (“Unit”) and Ratchet, Inc. (doing business as Increase).
Fintech companies provided technologies to enable the delivery of digital bank services and were a source of interest and fee income, and deposits. During 2024, the Company, through an orderly wind down, exited its BaaS depository operations; therefore, as of December 31, 2025, the Company had no active end-users attained through fintech channels.
Capital Requirements The Federal Reserve, the OCC, and the FDIC have issued substantially similar capital requirements applicable to all banks and bank holding companies. On January 1, 2024, the Company became subject to the bank holding capital requirements.
In the years ended December 31, 2025 and 2024, the Company recorded expense of $2.8 million and $5.5 million, respectively, for FDIC insurance premiums. Capital Requirements The Federal Reserve, the OCC, and the FDIC have issued substantially similar capital requirements applicable to all banks and bank holding companies.
Part 359. As with other financial institutions, the earnings of the Bank are affected by general economic conditions and by the monetary policies of the Federal Reserve. The Federal Reserve exerts a substantial influence on interest rates and credit conditions, primarily through open market operations in U.S.
The Federal Reserve exerts a substantial influence on interest rates and credit conditions, primarily through open market operations in U.S. government securities, setting the reserve requirements of member banks, and establishing the discount rate on member bank borrowings.
The Company offers a variety of commercial banking services, including deposit accounts, treasury management solutions, wire services, online banking, fraud prevention services, procurement cards, and a wide range of commercial lending options. The Company can also offer property and casualty insurance through its minority interest in Hammond Insurance Agency, Inc. Wealth and Trust Services.
The Company can also offer property and casualty insurance through its minority interest in Hammond Insurance Agency, Inc. Wealth and Trust Services.
The Company, through the Financial Group, offers investment and wealth management services and management services for personal and corporate trusts, including estate planning, estate settlement, trust administration, and life insurance products. Fintech Lending Programs. The Company partners with certain fintech providers that accommodate lending programs to consumers. These loans are originated by the Bank to borrowers sourced by fintech partners.
The Company, through the Financial Group, offers investment and wealth management and management services for personal and corporate trusts, including estate planning, estate settlement, trust administration, and life insurance products. The Company, through its minority investment in Hammond Insurance Agency, Incorporated, offers property and casualty insurance to individuals and businesses.
These consumer loans historically entail greater risk than loans secured by real estate. Consumer Deposit Services. Consumer deposit products offered by the Company include checking accounts, savings accounts, money market accounts, certificates of deposit, online banking, mobile banking, and electronic statements. Commercial Banking Services.
Consumer deposit products offered by the Company include checking accounts, savings accounts, money market accounts, certificates of deposit, online banking, mobile banking, and electronic statements. Commercial Banking Services. The Company offers a variety of commercial banking services, including deposit accounts, treasury management solutions, wire services, online banking, fraud prevention services, procurement cards, and a wide range of commercial lending options.
Commercial lending activities of the Company include business loans, asset-based loans, and other secured and unsecured loans and lines of credit. Commercial and industrial loans may entail greater risk than residential mortgage loans, and are underwritten in accordance with loan policy, which sets risk management standards.
Commercial and industrial loans may entail greater risk than mortgage loans on real estate, and are underwritten in accordance with loan policy, which sets risk management standards. Among the criteria for determining the borrower’s ability to repay is a cash flow analysis of the business and valuation of the business collateral. Small Business Administration Loans.
Dividends Generally, the Company’s principal source of cash flow, including cash flow to pay dividends to its shareholders, is dividends it receives from the Bank. Statutory and regulatory limitations apply to the Bank’s payment of dividends to the Company.
The Bank was required to maintain a leverage ratio of 10.00% and a total capital ratio of 13.00%. As of December 31, 2024, the Bank met the then applicable minimum capital ratios. Dividends Generally, the Company’s principal source of cash flow, including cash flow to pay dividends to its shareholders, is dividends it receives from the Bank.
See Item 1C, Cybersecurity, in this Form 10-K for a disclosure of the Company's cybersecurity risk management practices and governance.
See Item 1C, Cybersecurity, in this Form 10-K for a disclosure of the Company's cybersecurity risk management practices and governance. Digital Assets In July 2025, President Trump signed into law the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”), which establishes a regulatory framework for “payment stablecoins” and their issuers.
As of the end of 2023, the Company also partnered with Flexible Finance, Inc. and Jaris Lending, LLC in offering indirectly lending services. The Company has reported plans to exit its indirect fintech lending relationships and expects to be completely exited by early 2026.
As of December 31, 2024, the Company offered indirect fintech lending services conducted through Upgrade, Inc., Best Egg, Inc., Kashable, LLC, and Grow Credit, Inc. The Company has been terminating its indirect fintech lending relationships and expects to be completely exited in 2026.
On November 7, 2024, all outstanding shares of the Series C Preferred Stock were exchanged for shares of the Company’s common stock. 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, Series B Preferred Stock, and Series C Preferred Stock.
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. For additional information see Part II, Item 8, Note 1 - Organization and Basis of Presentation of this Form 10-K.
Complete copies of the Written Agreement and the Consent Order are included as Exhibits 10.10 and 10.11, respectively, to this Annual Report on Form 10-K. Other Matters On January 31, 2021, the Company completed a merger with Bay Banks of Virginia, Inc.
On November 13, 2025, the OCC issued an order terminating the Consent Order effective the same date. Complete copies of the Consent Order and the Order Terminating the Consent Order issued by the OCC are included as Exhibits 10.9 and 99.1, respectively, to this Annual Report on Form 10-K.
These changes may also require the Company to invest significant management attention and resources to evaluate and make necessary changes to comply with new statutory and regulatory requirements. Deposit Insurance The deposits of the Bank are insured up to applicable limits by the DIF and are subject to deposit insurance assessments to maintain the DIF.
Deposit Insurance The deposits of the Bank are insured up to applicable limits by the DIF and are subject to deposit insurance assessments to maintain the DIF. The deposit insurance assessment base is based on average total assets minus average tangible equity.
Removed
The Company, through its minority investment in Hammond Insurance Agency, Incorporated, offers property and casualty insurance to individuals and businesses. The Bank’s mortgage banking activities include a retail mortgage business operating as Monarch Mortgage. The Company conducted a wholesale mortgage business operating as LenderSelect Mortgage Group until it was sold on May 15, 2023.
Added
Deposits of the Bank are insured by the Deposit Insurance Fund (the “DIF”) of the Federal Deposit Insurance Corporation (the “FDIC”) to the full extent of the limits of the DIF.
Removed
The Company's primary source of revenue is interest income from its lending activities.
Added
As of December 31, 2025, the Company had total assets of approximately $2.43 billion, total gross loans of approximately $1.87 billion, total deposits of approximately $1.91 billion, and stockholders’ equity of approximately $323.7 million.
Removed
Over the past several years, the Company has had partnerships with financial technology ("fintech") providers, through which it provided indirect depository services (referred to as banking-as-a-service or "BaaS") to both consumers and businesses. Fintech companies provide technologies to enable the delivery of digital bank services and are a source of interest and fee income, and deposits.
Added
Regulatory Matters During much of 2025, the Bank was subject to a Consent Order (the "Consent Order") issued on January 24, 2024 by its primary regulator, the Office of the Comptroller of the Currency (the "OCC").
Removed
Pursuant to the Unit partnership, the Bank had subpartner relationships that target certain niches of end users, where Unit provides the technology platform to access banking activities. The Company also provides indirect lending services through fintech partnerships. In these arrangements, the fintech partner sources the loans, which the Bank then originates.
Added
The Consent Order primarily concerned the Bank’s fintech operations and required the Bank to continue enhancing its controls for assessing and managing risks stemming from its fintech partnerships and added time frames for meeting certain of the directives, required the Bank to submit a strategic plan and a capital plan, and required the Bank to maintain a leverage ratio of 10.0% and a total capital ratio 1 of 13.0%, referred to as minimum capital ratios.
Removed
On June 28, 2024, all outstanding shares of the Company’s Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”) converted into shares of the Company’s common stock.
Added
Special Cash Dividend On October 27, 2025, the Company announced a special cash dividend of $0.25 per share of the Company's common stock totaling approximately $29.1 million. Of this amount, $22.6 million was paid on November 21, 2025, to shareholders of record as of the close of business on November 7, 2025.
Removed
On July 11, 2024, the holder of the Company's Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”) received the required regulatory non-objection to exchange the Series C Preferred Stock for common stock as stipulated in the Private Placement agreements.
Added
The remaining $6.5 million was established as a liability and will be paid if and when warrants to purchase common stock are exercised and if and when performance-based restricted stock awards ("PSAs") vest (collectively, the "Special Cash Dividend").
Removed
Warrants for Series B Preferred Stock and Series C Preferred Stock converted to warrants for common stock upon the conversion or exchange of the preferred stock to common stock. As of December 31, 2024, there were outstanding warrants to purchase 31,451,999 common shares.
Added
Share Repurchase Program On August 25, 2025, the Company announced the adoption of a share repurchase program (the “Repurchase Program”) pursuant to which the Company may purchase up to $15.0 million of the Company’s common stock.
Removed
Of these, warrants to purchase 29,027,999 common shares have an exercise price of $2.50 per share with a remaining exercise term of 4.26 years, and warrants to purchase 2,424,000 common shares have an exercise price of $2.39 per share with a remaining exercise term of 4.45 years.
Added
Repurchases may be made in open market purchases, block trades, or privately negotiated transactions, including upon the exercise of outstanding warrants to purchase common stock.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny changes in these market conditions, in current accounting principles or interpretations of these principles could impact the Company’s assessment of fair value and thus the determination of credit losses associated with the securities in the investment securities portfolio, which could adversely affect the Company’s financial condition, capital ratios, and results of operations. 19 The Company’s investment securities portfolio, in particular, may be impacted by market conditions beyond its control, including rating agency downgrades of the securities, defaults of the issuers of the securities, lack of market pricing of the securities, inactivity or instability in the credit markets, and changes in market interest rates.
Biggest changeThe Company’s investment securities portfolio, in particular, may be impacted by market conditions beyond its control, including rating agency downgrades of the securities, defaults of the issuers of the securities, lack of market pricing of the securities, inactivity or instability in the credit markets, and changes in market interest rates.
The Company’s ability to manage its growth successfully also will depend on whether it can maintain capital levels adequate to support its business, maintain operational and control systems, cost controls and asset quality, comply with regulatory requirements, and successfully integrate any businesses the Company pursues into its organization.
The Company’s ability to manage its growth successfully also will depend on whether it can maintain capital levels adequate to support its business, maintain operational and control systems, cost controls, asset quality, comply with regulatory requirements, and successfully integrate any businesses the Company pursues into its organization.
The market price could drop significantly if one or more shareholders sold substantial amounts of the Company’s common stock or other investors perceive sales to be imminent.
The market price could drop significantly if one or more shareholders sold substantial amounts of the Company’s common stock or if other investors perceive sales to be imminent.
Additionally, borrowers in industries that are more capital-intensive or cyclical in nature may experience heightened financial stress, potentially leading to increased delinquencies and defaults that could negatively impact the Company’s loan portfolio. For commercial real estate loans, heightened repricing risk arises as maturing fixed-rate loans require renewal or refinancing at higher interest rates.
Additionally, borrowers in industries that are more 18 capital-intensive or cyclical in nature may experience heightened financial stress, potentially leading to increased delinquencies and defaults that could negatively impact the Company’s loan portfolio. For commercial real estate loans, heightened repricing risk arises as maturing fixed-rate loans require renewal or refinancing at higher interest rates.
The Company’s business requires the collection and retention of large volumes of customer data, including personally identifiable information (“PII”), in various information systems that the Company maintains and in those maintained by third-party service providers. The Company also maintains important internal company data such as PII about its employees 14 and information relating to its operations.
The Company’s business requires the collection and retention of large volumes of customer data, including personally identifiable information (“PII”), in various information systems that the Company maintains and in those maintained by third-party service providers. The Company also maintains important internal company data such as PII about its employees and information relating to its operations.
Financial or operational difficulties of a third-party vendor could also hurt the Company’s operations if those difficulties interface with the vendor’s ability to serve the Company. Replacing these third-party vendors could also create significant delay and expense. Accordingly, use of such third parties creates an unavoidable inherent risk to the Company’s business operations.
Financial or operational difficulties of a third-party vendor could also hurt the Company’s operations if those difficulties interface with the vendor’s ability to serve the Company. Replacing these 20 third-party vendors could also create significant delay and expense. Accordingly, use of such third parties creates an unavoidable inherent risk to the Company’s business operations.
There is no guarantee that the Company will be able to maintain the listing of its common stock on the NYSE American in the future. Currently, the Company’s common stock is thinly traded and has substantially less liquidity than the trading markets for many other bank holding companies.
There is no guarantee that the Company will be able to maintain the listing of its common stock on the NYSE American in the future. 15 Currently, the Company’s common stock is thinly traded and has substantially less liquidity than the trading markets for many other bank holding companies.
The Company may also be subject to disruptions of its operating systems arising from events that are wholly or partially beyond its control (for example, computer viruses, or electrical or communications outages), which may give rise to disruption of service to customers and to financial loss or liability.
The Company may also be subject to disruptions of its operating systems arising from events that are wholly or partially beyond its control (for 22 example, computer viruses, or electrical or communications outages), which may give rise to disruption of service to customers and to financial loss or liability.
The Company’s operations will continue to place significant demands on management, and the loss of any such person’s services may have an adverse effect upon the Company's operations and profitability. If the Company fails to retain or continue to recruit qualified employees, its operations and profitability could be adversely affected.
The Company’s strategy and operations will continue to place significant demands on management, and the loss of any such person’s services may have an adverse effect upon the Company's strategy, operations, and profitability. If the Company fails to retain or continue to recruit qualified employees, its strategy, operations, and profitability could be adversely affected.
Cash flows to service commercial real estate loans may be negatively affected by general economic conditions, such as a sustained downturn, or in occupancy rates in the local economy where the property is located and could increase the likelihood of default.
Cash flows to service commercial real estate loans may be negatively affected by general economic conditions, such as unemployment, a sustained downturn, or in occupancy rates in the local economy where the property is located and could increase the likelihood of default.
If the Company cannot provide reliable financial reports or reasonably prevent fraud, its reputation and operating results would be harmed. As part of its ongoing monitoring of internal controls, the Company may discover material weaknesses or significant deficiencies in its internal controls that require remediation.
If the Company cannot provide reliable financial reports or reasonably prevent fraud, its reputation and operating results would 21 be harmed. As part of its ongoing monitoring of internal controls, the Company may discover material weaknesses or significant deficiencies in its internal controls that require remediation.
The growth in economic activity and in the demand for goods and services, coupled with labor shortages, supply chain disruptions and other factors, has contributed to rising inflationary pressures, the Federal Reserve’s responsive interest rate hikes during 2022 and 2023, and the risk of recession.
The growth in economic activity and in the demand for goods and services, coupled with labor shortages, supply chain disruptions, tariffs, and other factors, has contributed to rising inflationary pressures, the Federal Reserve’s responsive interest rate hikes during 2022 and 2023, and the risk of recession.
The Company's inability to maintain operating effectiveness of the internal controls over financial reporting could result in a material misstatement to financial statements or other disclosures, which could have an 15 adverse effect on its business, financial condition, and results of operations.
The Company's inability to maintain operating effectiveness of the internal controls over financial reporting could result in a material misstatement to financial statements or other disclosures, which could have an adverse effect on its business, financial condition, and results of operations.
Deposit levels and other funding costs may be affected by a number of factors, including, but not limited to, rates paid by competitors, general interest rate levels, regulatory capital requirements, returns available to customers on alternative investments, and general economic conditions.
Deposit levels and funding costs may be affected by a number of factors, including, but not limited to, rates paid by competitors, general interest rate levels, regulatory capital requirements, returns available to customers on alternative investments, and general economic conditions.
Severe weather, natural disasters, acts of war or terrorism, geopolitical instability, public health issues, and other external events could significantly impact the Company's business. Severe weather, natural disasters, acts of war or terrorism, geopolitical instability, public health issues, and other adverse external events could have a significant impact on the Company's ability to conduct business.
Severe weather, natural disasters, acts of war or terrorism, geopolitical instability, public health issues, and other adverse external events could have a significant impact on the Company's ability to conduct business.
The 21 determination of the appropriate level of the ACL inherently involves a high degree of subjectivity and requires the Company to make significant estimates of current credit risks and future trends, all of which may undergo material changes.
The determination of the appropriate level of the ACL inherently involves a high degree of subjectivity and requires the Company to make significant estimates of current credit risks and future trends, all of which may undergo material changes.
If the Company is unable to 20 attract and retain banking customers, it may be unable to continue to grow loan and deposit portfolios and its results of operations and financial condition may otherwise be adversely affected.
If the Company is unable to attract and retain banking customers, it may be unable to continue to grow loan and deposit portfolios and its results of operations and financial condition may otherwise be adversely affected.
Because the Company’s loan portfolio contains a number of commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase 22 in nonperforming loans.
Because the Company’s loan portfolio contains a number of commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans.
In addition, collateral appraisals that are out of date or that do not meet industry recognized standards may 23 create the impression that a loan is adequately collateralized when it is not.
In addition, collateral appraisals that are out of date or that do not meet industry recognized standards may create the impression that a loan is adequately collateralized when it is not.
Credit risk and credit losses can increase if its loans are concentrated to borrowers who, as a group, may be uniquely or disproportionately affected by economic or market conditions.
Credit risk and credit losses can increase if loans are concentrated to borrowers who, as a group, may be uniquely or disproportionately affected by economic or market conditions.
While increased in-office attendance may help stabilize demand for some commercial real estate properties, persistent remote and hybrid work trends could keep office vacancy rates elevated, particularly in markets with oversupply in the Company's footprint. Additionally, workforce reductions in the federal government due to budget cuts or restructuring could further dampen demand for office space and housing in government-centric areas.
While increased in-office attendance may help stabilize demand for some commercial real estate properties, persistent remote and hybrid work arrangements could keep office vacancy rates elevated, particularly in markets with oversupply in the Company's footprint. Additionally, workforce reductions in the federal government due to budget cuts or restructuring could further dampen demand for office space and housing in government-centric areas.
The Company manages credit risk through a program of underwriting standards, the review of certain credit decisions, and a continuous quality assessment process of credit already extended. The Company’s exposure to credit risk is managed through the use of consistent underwriting standards that emphasize local lending while avoiding highly leveraged transactions, as well as excessive industry and other concentrations.
The Company manages credit risk through a program of underwriting standards, the review of certain credit decisions, and a continuous quality assessment process of credit already extended. The Company’s exposure to credit risk is managed through the use of consistent underwriting standards that emphasize local lending, while avoiding highly-leveraged transactions and excessive industry and other concentrations.
The Company cannot foresee the impact of such potential sales on the market, but it is possible that if a significant percentage of shares were attempted to be sold within a short period of time, the market for the Company’s shares would be adversely affected.
The Company cannot foresee the impact of such potential sales on the Company's share price, but it is possible that if a significant percentage of shares were attempted to be sold within a short period of time, the market for the Company’s shares would be adversely affected.
As of December 31, 2024, the Company determined it more likely than not that it will have sufficient future taxable income that will allow it to realize its deferred tax assets, including the net operating loss carryforward.
As of December 31, 2025, the Company determined it more likely than not that it will have sufficient future taxable income that will allow it to realize its deferred tax assets, including the net operating loss carryforward.
As indicated above, a significant portion of the Company’s loan portfolio consists of loans secured by real estate and it may hold a portfolio of foreclosed properties. The Company relies upon independent appraisers to estimate the value of such real estate.
As indicated above, a significant portion of the Company’s loan portfolio consists of loans secured by real estate and the Company may also hold a portfolio of foreclosed properties. The Company relies upon independent appraisers to estimate the value of such real estate.
For more information regarding recent accounting pronouncements and their effects on the Company, see “Recent Accounting Pronouncements” in Note 2 of the Company’s audited financial statements as of and for the year ended December 31, 2024.
For more information regarding recent accounting pronouncements and their effects on the Company, see “Recent Accounting Pronouncements” in Note 2 of the Company’s audited financial statements as of and for the year ended December 31, 2025.
Shifts in workplace dynamics, including remote work, and a potentially smaller federal government workforce, may weaken office property and housing demand, pressure valuations, and increase credit risk for the Company.
Shifts in workplace dynamics, including remote and hybrid work arrangements, and a potentially smaller federal government workforce, may weaken office property and housing demand, pressure valuations, and increase credit risk for the Company.
The Company’s ability to access borrowings from the FHLB and the Federal Reserve Bank of Richmond ("FRB") is dependent upon providing collateral to secure borrowings.
The Company’s ability to access borrowings from the FHLB and the Federal Reserve Bank of Richmond (“FRB”) is dependent upon providing collateral to secure borrowings.
For example, in deciding whether to extend credit to clients, the Company may assume that a client’s audited financial statements conform with GAAP and present fairly, in all material respects, the financial condition, results of operations, and cash flows of that client.
For example, in deciding whether to extend credit to clients, the Company may assume that a client’s audited financial statements conform with generally accepted accounting principles ("GAAP") and present fairly, in all material respects, the financial condition, results of operations, and cash flows of that client.
ITEM 1A: RISK FA CTORS An investment in the Company’s common stock involves certain risks, including those described below. In addition to the other information set forth in this report, investors in the Company’s securities should carefully consider the factors discussed below.
ITEM 1A: RISK FA CTORS An investment in the Company’s common stock involves certain risks, including those described below. In addition to the other information set forth in this Form 10-K, investors in the Company’s securities should carefully consider the factors discussed below.
In addition, the resolution of nonperforming assets requires significant commitments of time from management and staff, which can be detrimental to the performance of their other responsibilities, including generation of new loans. There can be no assurance that the Company will avoid increases in nonperforming assets in the future.
In addition, the resolution of nonperforming assets requires significant commitments of time from management and staff, which can be detrimental to the performance of their other responsibilities. There can be no assurance that the Company will avoid increases in nonperforming assets in the future.
Competition for qualified personnel is intense and there is a limited number of qualified persons with knowledge of and experience in banking and in the Company’s chosen geographic markets. Even if the Company identifies individuals that it believes could assist it in building its franchise, it may be unable to recruit these individuals away from their current employers.
Competition for qualified personnel is intense and there is a limited number of qualified persons with knowledge of and experience in banking and in the Company’s chosen geographic markets. Even if the Company identifies individuals that it believes could assist it in building its franchise, it may be unable to recruit these individuals to work for the Company.
The resale of the additional shares of the Company’s common stock could also cause the market price of the Company’s common stock to decline. 26 In addition, the Company’s board of directors, without the approval of shareholders, could from time to time decide to issue additional shares of common stock or shares of preferred stock, which may adversely affect the market price of the shares of common stock and could be substantially dilutive to holders of the Company’s common stock.
In addition, the Company’s board of directors, without the approval of shareholders, could from time to time decide to issue additional shares of common stock or shares of preferred stock, which may adversely affect the market price of the shares of common stock and could be substantially dilutive to holders of the Company’s common stock.
When the Company enters into new markets or new lines of business, its lack of history and familiarity with those markets, clients, and lines of business may lead to unexpected challenges or difficulties that inhibit its success.
Should the Company enter into new markets or new lines of business, its lack of history and familiarity with those markets, clients, and lines of business may lead to unexpected challenges or difficulties that inhibit its success.
An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in the provision for credit losses, and an increase in loan charge-offs, all of which could have a material adverse effect on the Company’s financial condition and results of operations.
An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in the ACL, and an increase in loan charge-offs, all of which could have a material adverse effect on the Company’s financial condition and results of operations.
At December 31, 2024 and December 31, 2023, approximately 7.8% and 10.5% of the Company’s loan portfolio, or $166.3 million and $255.9 million, respectively, consisted of construction and land development loans. Construction financing typically involves a higher degree of credit risk than financing on improved, owner-occupied real estate and improved, income producing real estate.
At December 31, 2025 and December 31, 2024, approximately 4.5% and 7.8% of the Company’s loan portfolio, or $83.5 million and $166.3 million, respectively, consisted of construction and land development loans. Construction financing typically involves a higher degree of credit risk than financing on improved owner-occupied real estate and improved income producing real estate.
The Company’s failure to comply with these laws and regulations, has in the past and could in the future subject it to restrictions on its business activities, fines, and other penalties, any of which could adversely affect the Company’s results of operations, capital base, and the price of its securities.
The Company’s failure to comply with these laws and regulations, has in the past and could in the future subject it to restrictions on its business activities, fines, and other penalties, any of which could adversely affect the Company’s results of operations and increase required capital levels. Activities of other banks could also affect the price of the Company's securities.
These costs and claims could adversely affect the Company’s results of operations. 24 Strategy The Company may not be able to successfully manage its long-term growth, which may adversely affect its results of operations and financial condition. A key aspect of the Company’s long-term business strategy is growth.
Strategy The Company may not be able to successfully manage its growth, which may adversely affect its results of operations and financial condition. A key aspect of the Company’s long-term business strategy is growth.
During 2024, the Company completed the Private Placements, pursuant to which it has issued approximately 64,850,000 shares of the Company’s common stock, warrants to purchase 29,531,999 shares of the Company’s common stock at an exercise price of $2.50 per share, and warrants to purchase 2,428,000 shares of the Company’s common stock at an exercise price of $2.39 per share.
During 2024, the Company completed the Private Placements, pursuant to which it has issued approximately 64,850,000 shares of the Company’s common stock and warrants to purchase 31,959,999 shares of the Company’s common stock at an exercise price of $2.50 per share.
However, it is possible that some or all its deferred tax asset, including the net operating 18 loss carryforward, may not be realizable and would require a valuation allowance.
However, it is possible that some or all its deferred tax asset, including the net operating loss carryforward, may not be realizable and would require a valuation allowance in future reporting periods.
The Federal Reserve regulates the supply of money and credit in the United States, and its policies determine in large part the Company’s cost of funds for lending, investing, and capital raising activities and the return it earns on those loans and investments, both of which affect the Company’s net interest margin.
The Company is affected by domestic monetary policy. The Federal Reserve regulates the supply of money and credit in the United States, and its policies determine in large part the Company’s cost of funds for lending, investing, and capital raising activities and the return it earns on those loans and investments, both of which affect the Company’s net interest margin.
Further, the exercise of such warrants at any time when the exercise price is less than the tangible book value of the shares of the Company’s common stock received will be dilutive to the tangible book value of the then existing common stock.
Further, the exercise of warrants issued in the Private Placements at any time when the exercise price is less than the tangible book value of the shares of the Company’s common stock received will be dilutive to the tangible book value of the then existing common stock.
The Company's ACL may be insufficient and any increases in the ACL may have a material adverse effect on the Company’s financial condition and results of operations.
The Company's allowance for credit losses ("ACL") may be insufficient and any increases in the ACL may have a material adverse effect on the Company’s financial condition and results of operations.
CECL is generally viewed throughout the industry as the most significant change in accounting standards to affect financial institutions in decades as it fundamentally changes the accounting for and estimation of the allowance for credit losses (“ACL”).
CECL is generally viewed throughout the industry as the most significant change in accounting standards to affect financial institutions in decades, as it fundamentally changes the accounting for and estimation of the ACL.
As of December 31, 2024 and December 31, 2023, approximately 80.8% and 76.4%, respectively, of the Company’s loans were secured by real estate, both residential and commercial, substantially all of which are located in its market area.
As of December 31, 2025 and December 31, 2024, approximately 83.6% and 80.8%, respectively, of the Company’s loans were secured by real estate, both residential and commercial, substantially all of which are located in its market area.
In the ordinary course of business, the Company collects and stores sensitive data, including proprietary business information and personally identifiable information of its customers and employees in systems and on networks. The secure processing, maintenance, and use of this information is critical to operations and the Company’s business strategy.
The Company’s operations may be adversely affected by cybersecurity risks. In the ordinary course of business, the Company collects and stores sensitive data, including proprietary business information and personally identifiable information of its customers and employees in systems and on networks. The secure processing, maintenance, and use of this information is critical to operations and the Company’s business strategy.
Nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing interest, and other real estate owned ("OREO") were $25.7 million, or 0.94% of total assets, and $63.1 million, or 2.02% of total assets, as of December 31, 2024 and December 31, 2023, respectively.
Nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing interest, and other real estate owned ("OREO") were $25.4 million, or 1.05% of total assets, and $25.7 million, or 0.94% of total assets, as of December 31, 2025 and December 31, 2024, respectively.
Reductions in the value of the Company’s deferred tax assets could adversely affect the Company’s results of operations. A deferred tax asset is created by the tax effect of the differences between an asset’s or liability's book value and its tax basis.
Reductions in the value of the Company’s deferred tax assets could adversely affect the Company’s results of operations. A deferred tax asset is created by the tax effect of the differences between an asset’s or liability's carrying value for financial reporting purposes and its tax basis.
The Company's total deferred tax asset at December 31, 2024 was $33.2 million, which represents the tax effect of future tax benefits, including a net operating loss carryforward. The Company assesses its deferred tax assets periodically to determine the likelihood of the Company’s ability to realize available benefits.
The Company's total deferred tax asset at December 31, 2025 was $27.6 million, which represents the tax effect of future tax benefits, including a net operating loss carryforward. The Company assesses its deferred tax assets periodically to determine the likelihood of the Company’s ability to realize the future benefits.
The Company also faces competition from many other types of financial institutions, including finance companies, mutual and money market fund providers, brokerage firms, insurance companies, credit unions, financial subsidiaries of certain industrial corporations, financial technology companies, and mortgage companies. Increased competition may result in reduced business for the Company.
The Company also faces competition from many other types of financial institutions, including finance companies, mutual and money market fund providers, brokerage firms, insurance companies, credit unions, financial subsidiaries of certain industrial corporations, financial technology companies, and mortgage companies.
Lehman owned 19,998,257 common shares, or about 23.5% of the outstanding shares of the Company’s common stock, and Castle Creek Capital Partners VIII, LP (“Castle Creek”) owned 11,521,078 common shares, or about 13.6% of the outstanding shares of the Company’s common stock.
Lehman owned 19,998,257 common shares, or about 21.9% of the outstanding shares of the Company’s common stock, and Castle Creek Capital Partners VIII, LP (“Castle Creek”) owned 11,521,078 common shares, or about 12.6% of the outstanding shares of the Company’s common stock.
If the Company is the owner or former owner of a contaminated site, it may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.
If the Company is the owner or former owner of a contaminated site, it may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. These costs and claims could adversely affect the Company’s results of operations.
Therefore, the Company’s shareholders may not be able to sell their shares at the volume, prices, or times that they desire. Shareholders should be financially prepared and able to hold shares for an indefinite period. In addition, thinly-traded stocks can be more volatile than more widely traded stocks.
Therefore, the Company’s shareholders may not be able to sell their shares at the volume, prices, or times that they desire. Shareholders should be financially prepared and able to hold shares for an indefinite period. In addition, thinly-traded stocks can be more volatile than more widely-traded stocks. Several factors could cause the price of the Company's stock to fluctuate substantially.
From time to time, regulators implement changes to these regulatory capital adequacy guidelines. If the Company or the Bank fail to meet these minimum capital guidelines and/or other regulatory requirements, its financial condition would be materially and adversely affected.
If the Company or the Bank fail to meet these minimum capital guidelines and/or other regulatory requirements, its financial condition would be materially and adversely affected.
The Company’s management cannot ensure that it can minimize interest rate risk. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, the Company’s net interest income, and therefore earnings, could be adversely affected.
If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, the Company’s net interest income, and therefore earnings, could be adversely affected.
Credit Risk The Company’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses. The Company assumes credit risk by virtue of making loans and extending loan commitments and letters of credit.
Additionally, the current market price may not be indicative of future market prices. Credit Risk The Company’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses. The Company assumes credit risk by virtue of making loans and extending loan commitments and letters of credit.
The Company relies on other companies to provide key components of its business infrastructure. Third-party vendors provide key components of the Company’s business operations such as data processing, recording, and monitoring transactions, online banking interfaces and services, internet connections, and network access. While the Company has selected these third-party vendors carefully, it does not control their actions.
The Company relies on other companies to provide key components of its business infrastructure. Third-party vendors provide key components of the Company’s business operations such as data processing, recording, and monitoring transactions, online banking interfaces and services, internet connections, and network access.
With respect to the secured loans, the collateral securing the repayment of these loans may be insufficient to cover the obligations owed under such loans.
Most of the Company’s loans are secured, but some loans are unsecured. With respect to the secured loans, the collateral securing the repayment of these loans may be insufficient to cover the obligations owed under such loans.
The Company’s credit administration function employs risk management techniques to help ensure that problem loans are promptly identified. While these procedures are designed to provide the Company with the information needed to implement policy adjustments where necessary and to take appropriate corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk.
While these procedures are designed to provide the Company with the information needed to implement policy adjustments where necessary and to take appropriate corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk.
Furthermore, as cyber threats continue to evolve and increase, the Company may be required to expend significant additional financial and operational resources to modify or enhance its protective measures, or to investigate and remediate any identified information security vulnerabilities.
Furthermore, as cyber threats continue to evolve and increase, the Company may be required to expend significant additional financial and operational resources to modify or enhance its protective measures, or to investigate and remediate any identified information security vulnerabilities. The continued evolution and increased usage of artificial intelligence technologies may further increase these risks.
As of December 31, 2024 and December 31, 2023, the Company had approximately $847.8 million and $870.5 million in loans secured by commercial real estate, respectively, representing approximately 40.2% and 35.8% of total loans outstanding as of those same dates, respectively. The real estate consists primarily of non-owner occupied properties and other commercial properties.
As of December 31, 2025 and December 31, 2024, the Company had approximately $836.3 million and $847.8 million in loans secured by commercial real estate, respectively, representing approximately 44.9% and 40.2% of total loans outstanding as of those same dates, respectively. The Company's portfolio of loans secured by commercial real estate consists primarily of non-owner occupied properties.
A significant source of risk for the Company is the possibility that losses will be sustained because borrowers, guarantors, and related parties may fail to perform in accordance with the terms of their loan agreements. Most of the Company’s loans are secured, but some loans are unsecured.
The Company’s results of operations are significantly affected by the ability of borrowers to repay their loans. A significant source of risk for the Company is the possibility that losses will be sustained because borrowers, guarantors, and related parties may fail to perform in accordance with the terms of their loan agreements.
At this time, it is unclear what laws, regulations, and policies may change and whether future changes or uncertainty surrounding future changes will adversely affect the Company’s operating environment, and therefore its business, financial condition, and results of operations.
At this time, however, it is unclear what the impacts to the rulemaking, supervision, examination, and enforcement priorities of the federal banking agencies will be, what laws, regulations, and policies may change and whether future changes or uncertainty surrounding future changes will adversely affect the Company’s operating environment, and therefore its business, financial condition, and results of operations.
The Company operates in a highly regulated industry, and the laws and regulations that govern the Company’s operations, including changes in them or the Company’s failure to comply with them, and regulatory actions implementing such laws and regulations, may adversely affect the Company. The Company is subject to extensive regulation and supervision that govern almost all aspects of its operations.
Regulatory and Operational The Company operates in a highly-regulated industry, and the laws and regulations that govern the Company’s operations, including changes in them or the Company’s failure to comply with them, and regulatory actions implementing such laws and regulations, may adversely affect the Company.
These laws and regulations, and regulatory actions implementing such laws and regulations, including the Consent Order, among other matters, prescribe minimum capital requirements, impose limitations on the Company’s business activities, limit the dividends or distributions that it can pay, and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in its capital than GAAP.
These laws and regulations, and regulatory actions implementing such laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the Company’s business activities, limit the dividends or distributions that it can pay, and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in its capital than GAAP. 19 Changes to laws, regulations, regulatory policies, or supervisory guidance, including changes in interpretation or implementation of laws, regulations, policies, or supervisory guidance, or changes in enforcement priorities could affect the Company in substantial and unpredictable ways.
If market interest rates rise or the Company’s competitors raise the rates they pay on deposits, the Company’s funding costs may increase, either because the Company raises its rates to avoid losing deposits or because the Company must rely on more expensive sources of funding.
If market interest rates rise or the Company’s competitors raise the rates they pay on deposits, the Company’s funding costs may increase, either because the Company raises its rates to avoid losing deposits or because the Company must rely on more expensive sources of funding. During 2024, the Company exited its fintech BaaS deposit operations through a managed winddown plan.
If funding costs continue to rise in future periods, as a result of reliance on higher cost deposits, further increases in market interest rates, rates paid by competitors, or otherwise, it could reduce the Company’s net interest income and could have an adverse effect on the Company’s business, financial condition, results of operations, and cash flows from operations.
While the Company’s cost of funds decreased to 2.66% in 2025 compared to 3.04% in 2024 and 2.56% in 2023, if funding costs increase in future periods, as a result of reliance on higher cost deposits, 24 increases in market interest rates, rates paid by competitors, or otherwise, it could reduce the Company’s net interest income and could have an adverse effect on the Company’s business, financial condition, results of operations, and cash flows from operations.
Sales of large amounts of the Company’s common stock, or the perception that sales could occur, may depress the Company’s stock price. The market price of the Company’s common stock could drop if existing shareholders decide to sell their shares, especially certain of the purchasers in the Private Placements. As of December 31, 2024, Kenneth L.
The market price of the Company’s common stock could drop if existing shareholders decide to sell their shares, especially certain of the purchasers in the Private Placements. As of December 31, 2025, Kenneth L.
Such losses could be realized into earnings should liquidity needs and/or business strategy necessitate the sales of securities in a loss position, which could adversely affect the Company’s financial condition, capital ratios, and results of operations.
Such losses could be realized in earnings should liquidity needs and/or business strategy necessitate the sales of securities in a loss position, which could adversely affect the Company’s financial condition, capital ratios, and results of operations. 14 The Company’s business and earnings are impacted by governmental, fiscal, and monetary policy over which it has no control.
If the Company is not able to afford such technologies, properly or timely anticipate or implement such technologies, or effectively train its staff to use such technologies, its business, financial condition, or operating results could be adversely affected.
If the Company is not able to afford such technologies, properly or timely anticipate or implement such technologies, or effectively train its staff to use such technologies, its business, financial condition, or operating results could be adversely affected. The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business.
As of December 31, 2024, the Company had approximately $73.9 million of non-owner occupied office loans, representing approximately 8.7% of total loans outstanding at that date.
As of December 31, 2025, the Company had approximately $55.7 million of non-owner occupied office loans, representing approximately 6.7% of total commercial real estate loans outstanding at that date.
Increases in, or negative changes in, the value of these problem assets, the underlying collateral, or in the borrowers’ performance or financial condition, could adversely affect the Company’s business, results of operations, and financial condition.
The Company utilizes various techniques such as workouts, restructurings, and loan sales to manage problem assets. Increases in, or negative changes in, the value of these problem assets, the underlying collateral, or in the borrowers’ performance or financial condition, could adversely affect the Company’s business, results of operations, and financial condition.
The Company faces strong and growing competition from financial services companies and other companies that offer banking and other financial services, which could negatively affect the Company’s business. The Company encounters substantial competition from other financial institutions in its market area and competition is increasing. Ultimately, the Company may not be able to compete successfully against current and future competitors.
The Company faces strong and growing competition from financial services companies and other companies that offer banking and other financial services, which could negatively affect the Company’s business. The Company encounters substantial competition from financial institutions in its market area and other providers of financial products and services, and competition is increasing.
Many competitors offer the same banking services that the Company offers in its service area. These competitors include national, regional, and community banks.
Ultimately, the Company may not be able to compete successfully against current and future competitors. Many competitors offer the same banking services that the Company offers in its service area. These competitors include national, regional, and community banks.
If customer deposits are not sufficient to fund the Company’s normal operations and liquidity needs, the Company may be required from time to time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations.
The Company may be required from time to time to rely on secondary sources of liquidity to meet loan withdrawal demands or otherwise fund operations.
Climate change and related legislative and regulatory initiatives may result in operational changes and expenditures that could significantly impact the Company’s business. The current and anticipated effects of climate change are creating an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased.
Climate change and related legislative and regulatory initiatives may result in operational changes and expenditures that could significantly impact the Company’s business. The current and anticipated effects of climate change continue to raise concerns for the state of the global environment.
It is expected that the Company will continue to realize income from the differential or “spread” between the interest earned on loans, securities, and other interest-earning assets, and interest paid on deposits, borrowings, and other interest-bearing liabilities. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest-earning assets and interest-bearing liabilities.
Changes in the interest rate environment may reduce the Company’s profits. It is expected that the Company will continue to realize income from the differential or “spread” between the interest earned on loans, securities, and other interest-earning assets, and interest paid on deposits, borrowings, and other interest-bearing liabilities.
General market declines or market volatility in the future, especially in the financial institutions sector of the economy, could adversely affect the price of the Company’s common stock, and the current market price may not be indicative of future market prices.
The Company’s stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to its performance and are not within the control of the Company. General market declines or market volatility in the future, especially in the financial institutions sector of the economy, could adversely affect the price of the Company’s common stock.
While public confidence in the banking system has stabilized, deposit outflows caused by reputational concerns or events affecting the banking industry generally could adversely affect the Company’s liquidity, financial condition, and results of operations. 16 The Company is subject to a variety of operational risks, including reputational, legal, and compliance risk, and the risk of fraud or theft by employees, directors, or outsiders.
While public confidence in the banking system has since stabilized, deposit outflows caused by reputational concerns or events affecting the banking industry generally could adversely affect the Company’s liquidity, financial condition, and results of operations.
Any deterioration of the borrowers’ businesses may hinder their ability to repay their loans with the Company, which could have a material adverse effect on its financial condition and results of operations. The Company’s results of operations are significantly affected by the ability of borrowers to repay their loans.
Moreover, a portion of these loans have been made by the Company in recent years and the borrowers may not have experienced a complete business or economic cycle. Any deterioration of the borrowers’ businesses may hinder their ability to repay their loans with the Company, which could have a material adverse effect on its financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough the Company has not experienced a material cybersecurity incident, it periodically experiences threats or is tested by bad actors, including phishing, smishing, and vishing. 27 The Company believes it maintains a robust cybersecurity program designed to assess and manage risks from cyber threats.
Biggest changeThe materiality of any such adverse effect would be determined by the facts and circumstances of the specific incident and may include consideration of nonfinancial factors and follow on impacts. Although the Company has not experienced a material cybersecurity incident, it periodically experiences threats or is tested by bad actors, including phishing, smishing, and vishing.
The Company's cybersecurity program is subject to multiple audits throughout the year, primarily using third-party independent audit firms that possess particular expertise, under the leadership of the Company's internal audit function. The CISO routinely presents a summary of the Company’s cybersecurity landscape to the Company’s board of directors.
The Company's cybersecurity program is subject to multiple audits throughout the year, primarily using third-party independent audit firms that possess particular expertise, under the leadership of the Company's internal audit function. The CISO routinely presents a summary of the Company’s cybersecurity landscape to the Company’s board of directors or a delegated committee of the Company's board of directors.
Further, the Company understands that a cybersecurity event might have a material adverse effect on its business, financial condition, results of operations, reputation, and future success in the marketplace. The materiality of any such adverse effect would be determined by the facts and circumstances of the specific incident and may include consideration of nonfinancial factors and follow on impacts.
Further, the Company understands that a cybersecurity event might have a material adverse effect on its business, financial condition, results of operations, reputation, and future success in the markets it serves.
Under the leadership of the CISO, the information security department is responsible for evaluating and developing the processes for monitoring, identifying, containing, and remediating the impact of cybersecurity risks, vulnerabilities, and threats. The CISO also directs technology efforts, both internally and through third-party service providers , to strengthen controls throughout the organization and manage cybersecurity risks.
The CISO also directs technology efforts, both internally and through third-party service providers , to strengthen controls throughout the organization and manage cybersecurity risks.
This cybersecurity program, which is directed by the Chief Information Security Officer (“CISO”), is integrated with the Company’s enterprise risk and compliance programs and business continuity management program (“BCMP”). The Company's cybersecurity program leverages industry standards, such as the FFIEC Cybersecurity Assessment Tool, and is routinely evaluated for improvement, particularly due to evolving risks in this area.
The Company believes it maintains a robust cybersecurity program designed to assess and manage risks from cyber threats. This cybersecurity program, directed by the Chief Information Security Officer (“CISO”), is integrated with the Company’s enterprise risk and compliance programs and business continuity management program (“BCMP”).
Added
The Company's cybersecurity program leverages industry standards, such as the National Institute of Standards and Technology Cybersecurity Framework, and is routinely evaluated for improvement, particularly due to evolving risks in this area. 26 Under the leadership of the CISO, the information security department is responsible for evaluating and developing the processes for monitoring, identifying, containing, and remediating the impact of cybersecurity risks, vulnerabilities, and threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, the Company's employees occupied an additional 38 properties, of which 19 were owned by the Company.
Biggest changeAs of December 31, 2025, the Company's employees occupied an additional 30 properties, of which 19 were owned by the Company.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn December 5, 2023, an alleged shareholder of the Company commenced a putative class action in the U.S. District Court for the Eastern District of New York (No. 1:23-cv-08944) ( Russell Hunter v.
Biggest changeThe Company believes the plaintiff’s claims are without merit and will continue to defend itself vigorously in the matter. 27 On December 5, 2023, an alleged shareholder of the Company commenced a putative class action in the U.S. District Court for the Eastern District of New York (No. 1:23-cv-08944) (Russell Hunter v.
On February 4, 2025, the plaintiff filed an unopposed motion for preliminary approval of the proposed class action settlement, which, if granted, will settle the Action and any claims related to the Action or that could have been brought in the Action by the parties, the parties’ counsel, or settlement class members (the “Motion”).
On February 4, 2025, the plaintiff filed an unopposed motion for preliminary approval of the proposed class action settlement, which, if granted, would settle the Action and any claims related to the Action or that could have been brought in the Action by the parties, the parties’ counsel, or settlement class members (the “Motion”).
The complaint alleges violations of federal securities laws against the Company and certain of its current and former officers based on alleged material misstatements and omissions related to accounting judgments in the Company’s SEC filings. The complaint seeks certification of a class action, unspecified damages, and attorney’s fees.
The Action alleged violations of federal securities laws against the Company and certain of its current and former officers based on alleged material misstatements and omissions related to accounting judgments in the Company’s filings with the SEC. The complaint sought certification of a class action, unspecified damages, and attorney’s fees.
Code § 40.1-27.3, and Bowman v. State Bank of Keysville , 331 S.E.2d 797 (Va. 1985). On December 30, 2024, the Company removed the matter to the United States District Court for the Eastern District of Virginia, where it 28 subsequently filed a motion to dismiss, which has since been fully briefed and is awaiting decision by the court.
Code § 40.1-27.3, and Bowman v. State Bank of Keysville , 331 S.E.2d 797 (Va. 1985). On December 30, 2024, the Company removed the matter to the United States District Court for the Eastern District of Virginia, where it subsequently filed a motion to dismiss. On July 18, 2025, the court granted the Company’s motion to dismiss.
Removed
There is no specified time by which the court’s decision must be rendered. The Company believes the plaintiff’s claims are without merit and will defend itself vigorously in the matter. The case caption is Porter v. Blue Ridge Bankshares, Inc. (No. 3:24-cv-909 (E.D. Va.)).
Added
The case caption in the district court is Porter v. Blue Ridge Bankshares, Inc. (No. 3:24-cv-909 (E.D. Va.)). On August 15, 2025, the plaintiff appealed the dismissal of her claims to the U.S. Court of Appeals for the Fourth Circuit, Case No. 25-1970, asserting various violations of law.
Removed
The Motion expressly disclaims any fault, liability, or wrongdoing on the part of the Company. The Company’s outside legal counsel has effected service, pursuant to 28 U.S.C. § 1715, of the Motion and related court filings to the Company’s federal and state regulators as well as to Attorneys General for all U.S. states and territories.
Added
The Company was insured for its legal fees and for the settlement amount less a deductible that was expensed in 2024.
Removed
The court has not yet ruled on the Motion. The Company has submitted an insurance claim for the amount of the settlement plus the cost of defense, less a deductible, which has been expensed for the year ended December 31, 2024.
Added
The Motion expressly disclaimed any fault, liability, or wrongdoing on the part of the Company. On June 6, 2025, the court conducted a preliminary fairness hearing regarding the Motion. On June 11, 2025, the federal magistrate judge recommended that the court grant the Motion.
Added
On July 5, 2025, the court adopted the magistrate’s report and recommendation, and on July 25, 2025, the court granted preliminary approval of the settlement, effective July 5, 2025. Also on July 25, 2025, the court set a final settlement approval hearing date of October 29, 2025. On July 29, 2025, the defendants satisfied their payment obligations under the settlement.
Added
On October 29, 2025, the court held a final settlement approval hearing at which no objections to the settlement were raised. Final judgment was entered and the matter was dismissed with prejudice on November 20, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShares Purchased (1) Average Price Paid per Share Shares Purchased as Part of a Publicly Announced Program Approximate Value of Shares that May Yet Be Purchased Under the Program October 1, 2024 through October 31, 2024 71 $ 2.93 — — November 1, 2024 through November 30, 2024 752 3.53 — — December 1, 2024 through December 31, 2024 — — — — Total 823 — — (1) For the three months ended December 31, 2024, employees and directors of the Company elected to have 823 shares of their vesting restricted stock awards withheld as payment for tax obligations.
Biggest changeOctober 1, 2025 through October 31, 2025 November 1, 2025 through November 30, 2025 December 1, 2025 through December 31, 2025 Total Share activity: Shares purchased or withheld (1) 147,872 3,300 752 151,924 Average price paid per share $ 4.21 $ 4.61 $ 4.42 $ 4.22 Shares purchased as part of a publicly announced program 142,786 — — 142,786 Warrant activity: Warrants purchased 3,229,000 — — 3,229,000 Average price paid per warrant $ 1.90 $ — $ — $ 1.90 Warrants purchased as part of a publicly announced program 3,229,000 — — 3,229,000 Approximate value of shares or warrants that may yet be purchased under the program $ 5,493,962 $ 5,493,962 $ 5,493,962 (1) The total number of shares for each period includes shares withheld from employees upon the vesting of restricted stock awards in satisfaction of applicable tax withholding obligations, which totaled 9,138 shares for the three months ended December 31, 2025.
However, when incentive stock awards vest, employees and directors may elect to have the Company withhold shares of the Company’s common stock as payment for income and payroll taxes. The following table provides information regarding repurchases of common stock for the three months ended December 31, 2024.
When incentive stock awards vest, employees and directors may elect to have the Company withhold shares of the Company’s common stock as payment for income and payroll taxes. 29 The following table provides information regarding repurchases of common stock and warrants to purchase common stock for the three months ended December 31, 2025.
In making its decisions regarding the payment of dividends on the Company’s common stock, the board of directors considers the Company's regulatory requirements and restrictions, operating results, financial condition, capital adequacy, shareholders' return, and other factors.
In making its decisions regarding the payment of dividends on the Company’s common stock, the board of directors considers the Company's regulatory requirements and restrictions, operating results, financial condition, capital adequacy, shareholders' return, and other factors. On October 27, 2025, the Company announced a special cash dividend of $0.25 per share of the Company's common stock totaling approximately $29.1 million.
A discussion of certain restrictions and limitations on the ability of the Bank to pay dividends to the Company, and the ability of the Company to pay dividends to shareholders of its common stock, is set forth in Part I, Item 1, Business, of this Form 10-K under the heading “Supervision and Regulation.” Stock Repurchases There were no repurchases of the Company's common stock as part of a stock repurchase program during the year ended December 31, 2024.
A discussion of certain restrictions and limitations on the ability of the Bank to pay dividends to the Company, and the ability of the Company to pay dividends to shareholders of its common stock, is set forth in Part I, Item 1, Business, of this Form 10-K under the heading “Supervision and Regulation.” Stock Repurchases On August 25, 2025, the Company announced the adoption of the Repurchase Program pursuant to which the Company may purchase up to $15 million of the Company’s issued and outstanding shares of common stock.
ITEM 5: MARKET FOR RE GISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES General The Company’s common stock is listed on the NYSE American market under the symbol “BRBS”.
ITEM 5: MARKET FOR RE GISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES General The Company’s common stock is listed on the NYSE American market under the symbol “BRBS”. There were 91,340,481 of the Company’s common stock outstanding at the close of business on March 2, 2026, which were held by approximately 3,121 shareholders of record.
There were 87,789,843 shares of the Company’s common stock outstanding at the close of business on March 3, 2025, which were held by approximately 2,575 shareholders of record. The closing price of the Company's common stock on December 31, 2024 was $3.22 per common share compared to $3.03 per common share as of December 31, 2023.
The closing price of the Company's common stock on December 31, 2025 was $4.27 per common share compared to $3.22 per common share as of December 31, 2024. Dividends The type, amount, and timing of any dividend payments are established by the Company’s board of directors.
Removed
Dividends On October 30, 2023, the board of directors of the Company determined to suspend future quarterly dividend payments until further notice. The decision was based on the desire to preserve capital. The type, amount, and timing of any dividend payments are established by the Company’s board of directors.
Added
Of this amount, $22.6 million was paid on November 21, 2025 to shareholders of record as of the close of business on November 7, 2025. The remaining $6.5 million was established as a liability and will be paid if and when warrants to purchase common stock are exercised and if and when PSAs vest.
Added
This amount is reported in other liabilities on the Company's consolidated balance sheets as of December 31, 2025.
Added
The Repurchase Program may be modified, suspended, or terminated at any time without notice, at the Company’s discretion, based upon a number of factors, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, the need for capital in the Company’s operations, and other factors deemed appropriate.
Added
These factors may also affect the timing and amount of share repurchases. The Repurchase Program does not obligate the Company to repurchase any shares. For the year ended December 31, 2025, the Company repurchased 802,735 shares of its common stock at a weighted average price of $4.17 per share totaling $3.4 million.
Added
Additionally, the Company repurchased outstanding warrants to purchase 3,229,000 shares of its common stock at a weighted average price of $1.90 per warrant totaling $6.1 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe 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 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 and procedures, complying with the OCC directives and applicable laws and regulations, and managing 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 new 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; 31 • 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 recent bank failures, responsive measures to mitigate and manage such developments, related 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 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 this Form 10-K and in filings the Company makes from time to time with the SEC.
Biggest changeThe 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; • reputational risk and potential adverse reactions of the Company’s customers, suppliers, employees, or other business partners; • 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; 30 • the emergence of digital assets and payment stablecoins, and evolving legislative or regulatory frameworks, which could alter deposit flows, competition, and credit intermediation and, in turn, adversely affect the Company’s funding, liquidity, or overall financial performance; • the ability to maintain capital levels adequate to support the Company's business; • 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 usage of advances and changes in technological and social media to develop timely and competitive products and services, and the acceptance of these products and services by new and existing customers; • the willingness of users to substitute competitors’ products and services for the Company’s products and services; • the impact of unanticipated outflows of deposits; • 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; • political developments, including government shutdowns and other significant disruptions and changes in the funding, size, scope and effectiveness of the federal government, its agencies and services; • 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; • the Company’s involvement in, and the outcome of, any litigation, legal proceedings, or enforcement actions that may be instituted against the Company; and • 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 this Form 10-K and in filings the Company makes from time to time with the SEC.
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.
The principal sources of funds for the Company are deposits, including transaction accounts (demand 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.
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.
Interest rate risk arises from timing 51 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.
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.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, 49 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.
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. 41 The following tables present an analysis of the change in the ACL by loan type as of the dates and for the periods stated.
In addition, bank regulatory agencies periodically review the Bank's ACL and may 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. 41 The following tables present an analysis of the change in the ACL by loan type as of the dates and for the periods stated.
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-K. Therefore, the Company cautions you not to place undue reliance on its forward-looking information and statements.
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-K. Therefore, the Company cautions you not to place undue reliance on its 31 forward-looking information and statements.
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.
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 of similar meaning.
This discussion should be read in conjunction with the Company’s consolidated financial statements and the notes thereto presented in Item 8, Financial Statements and Supplementary Information, of this Form 10-K. 30 Cautionary Note About Forward-Looking Statements The Company makes certain forward-looking statements in this Form 10-K that are subject to risks and uncertainties.
This discussion should be read in conjunction with the Company’s consolidated financial statements and the notes thereto presented in Item 8, Financial Statements and Supplementary Information, of this Form 10-K. Cautionary Note About Forward-Looking Statements The Company makes certain forward-looking statements in this Form 10-K that are subject to risks and uncertainties.
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. 48 The following table presents information on the available sources of liquidity as of the period stated.
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 period stated.
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 51 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.
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 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 general allowance for any specific loan or category.
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.
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.
Deposits are sourced from the Bank’s customers and, as needed, through wholesale deposit markets. The wholesale 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.
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.
Certain CRE collateral types have experienced declining occupancy, demand, 39 and rental rates, which could potentially lead to material declines in property level economics and further weaken borrowers' ability to service their debt.
Treasury and agencies securities are guaranteed and/or funded by the U.S. government. Municipal securities with unrealized losses showed no indication that the contractual cash flows will not be received when due.
Treasury and agencies securities are guaranteed and/or funded by the U.S. government. Municipal 44 securities with unrealized losses showed no indication that the contractual cash flows will not be received when due.
This population of individually evaluated loans (or loan relationships with the same primary source of repayment) is determined on a quarterly basis and is based on whether (1) the risk grade of the loan is substandard or worse and the balance exceeds $500,000, (2) the risk grade of the loan is special mention and the balance exceeds $1,000,000, or (3) the loan’s terms differ significantly from other pooled loans.
This population of individually evaluated loans (or loan relationships with the same primary source of 32 repayment) is determined on a quarterly basis and is based on whether (1) the risk grade of the loan is substandard or worse and the balance exceeds $500,000, (2) the risk grade of the loan is special mention and the balance exceeds $1,000,000, or (3) the loan's terms or risks differ significantly from other pooled loans.
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. 52
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.
The Company views these policies as critical because they are highly dependent upon subjective or complex judgments, assumptions, and estimates. Changes in such judgments, assumptions, and estimates may have a significant impact on the consolidated financial statements. Actual results, in fact, could differ from initial estimates.
The Company views the following policies as critical because they are highly dependent upon subjective or complex judgments, assumptions, and estimates. Changes in such judgments, assumptions, and estimates may have a significant impact on the consolidated financial statements. Actual results, in fact, could differ from initial estimates.
In some cases, the higher cost of refinancing may lead to loan defaults, particularly if property cash flows have not increased proportionally. Additionally, collateral values overall may be impaired by higher capitalization rates, further complicating refinancing efforts and increasing credit risk to the Bank.
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.
(2) Includes deferred loan fees/costs. (3) Nonaccrual loans have been included in the computations of average loan balances. (4) Includes accretion of fair value adjustments (discounts) on acquired loans of $1.1 million and $2.6 million for the years ended December 31, 2024 and 2023, respectively.
(2) Includes deferred loan fees/costs. (3) Nonaccrual loans have been included in the computations of average loan balances. (4) Includes accretion of fair value adjustments (discounts) on acquired loans of $1.6 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively.
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. 39 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.
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. 38 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.
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 investment securities as of December 31, 2024 and 2023.
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 investment securities as of December 31, 2025 and 2024.
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 each of the years ended December 31, 2024 and 2023.
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 each of the years ended December 31, 2025 and 2024.
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 December 31, 2024 and December 31, 2023.
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 December 31, 2025 and December 31, 2024.
The Company reports such investments at fair value if observable market transactions have occurred in similar securities, resulting in a new carrying value that is evaluated for impairment no less than quarterly. These impairment analyses may include quantitative 44 and/or qualitative information obtained either directly from the investee, a third-party broker, or a third-party valuation firm.
The Company reports such investments at fair value if observable market transactions have occurred in similar securities, resulting in a new carrying value that is evaluated for indication of impairment no less than quarterly. These impairment analyses may include quantitative and/or qualitative information obtained either directly from the investee, a third-party broker, or a third-party valuation firm.
In addition, bank regulatory agencies and the Company's independent auditors periodically review its ACL and may require an increase in the ACL or the recognition of further loan charge-offs, based on judgments that are different than those of management.
In addition, bank regulatory agencies and the Company's independent auditors periodically review its ACL and may require an increase in the ACL or the recognition of further loan charge-offs, based on judgments different than those of management.
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.
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 tables also include the capital adequacy ratios to which bank holding companies are subject.
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 December 31, 2024 and 2023, commitments under outstanding financial stand-by letters of credit totaled $12.5 million and $12.6 million, respectively.
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 December 31, 2025 and 2024, commitments under outstanding financial stand-by letters of credit totaled $6.3 million and $12.5 million, respectively.
The provision for credit losses is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held for investment loan portfolio.
The provision for (recovery of) credit losses is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held for investment loan portfolio.
Allowance for Credit Losses ("ACL") The allowance for credit losses represents management’s best estimate of credit losses over the remaining life of the loan portfolio. Loans are charged-off against the ACL when management believes the loan balance is no longer collectible. Subsequent recoveries of previously charged-off amounts (recoveries) are recorded as increases to the ACL.
Allowance for Credit Losses The ACL represents management’s best estimate of credit losses over the remaining life of the Company's held for investment loan portfolio. Loans are charged-off against the ACL when management believes the loan balance is no longer collectible. Subsequent recoveries of previously charged-off amounts (recoveries) are recorded as increases to the ACL.
While management uses available information at the time of estimation to determine expected lifetime credit losses on loans, future changes in the ACL may be necessary based on changes in portfolio composition, portfolio credit quality, changes in underlying facts for individually evaluated loans, and/or changes in current and forecasted economic conditions.
While management uses available information at the time of estimation to determine expected credit losses on loans, future changes in the ACL may be necessary based on changes in portfolio composition, portfolio credit quality, changes in underlying facts for individually evaluated loans, and/or economic conditions.
Restricted equity investments are carried at cost. The Company also has various other equity investments, including an investment in a fintech company and limited partnerships, totaling $4.8 million and $12.9 million as of December 31, 2024 and 2023, respectively.
Restricted equity investments are carried at cost. The Company also has various other equity investments, including an investment in a fintech company and limited partnerships, totaling $4.9 million and $4.8 million as of December 31, 2025 and 2024, respectively.
The recovery of credit losses in 2024 was primarily attributable to an $8.4 million recovery from the sale of a specialty finance loan reserved for in 2023 and 2022 and lower reserve needs due to loan portfolio balance reductions, partially offset by higher specific reserves for certain purchased loans.
The recovery of credit losses in 2024 was primarily attributable to an $8.4 million recovery from the sale of a specialty finance loan reserved for in 2023 and 2022, lower reserve needs due to loan portfolio balance reductions, and lower balances of loan commitments, partially offset by higher specific reserves for certain purchased loans. Noninterest Income .
The credit risk of issuing stand-by letters of credit can be greater than the risk involved in extending loans to customers. As of December 31, 2024 and 2023, the Company recorded a recovery of credit losses for unfunded commitments of $2.2 million and $2.4 million, respectively, which was primarily attributable to lower balances of loan commitments.
The credit risk of issuing stand-by letters of credit can be greater than the risk involved in extending loans to customers. As of December 31, 2025 and 2024, the Company recorded a recovery of credit losses for unfunded commitments of $0.1 million and $2.2 million, respectively, which was primarily attributable to lower balances of loan commitments.
In accordance with Accounting Standards Codification ("ASC") 326, Credit Losses, the Company elected to exclude accrued interest from the recorded investment basis in its determination of the ACL for loans held for investment, and instead reverses accrued but unpaid interest through interest income in the period in which the loan is placed on nonaccrual status.
In accordance with ASC 326, the Company elected to exclude accrued interest from the recorded investment basis in its determination of the ACL for loans held for investment, and instead reverses accrued but unpaid interest through interest income in the period in which the loan is placed on nonaccrual status.
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 table presents information on the balances and interest rates on borrowings as of and for the periods stated.
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.
Historical loss rates used in the quantitative model are derived using both the Bank’s and peer bank data obtained from publicly-available sources (i.e., federal call reports). The Bank’s peer group utilized is comprised of financial institutions of relatively similar size (i.e., $1 - $5 billion of total assets) and in similar markets.
Historical loss rates used in the quantitative model were derived using both the Bank's and peer bank data obtained from publicly-available sources (i.e., federal call reports) encompassing an economic cycle. The Bank's peer group utilized is comprised of financial institutions of relatively similar size (i.e., $1 - $5 billion of total assets) and in similar markets.
Interest expense in the 2024 and 2023 periods included the amortization of fair value adjustments (premium) on assumed time deposits of $0.3 million and $0.8 million, respectively, which was a reduction to interest expense.
Interest expense in the 2025 and 2024 periods included the amortization of fair value adjustments (premium) on assumed time deposits of $0.1 million and $0.3 million, respectively, which was a reduction to interest expense.
The Company has an ACL management "work group", which includes executive and senior management of the accounting and credit administration teams, who approve the key methodologies and assumptions, as well as the final ACL.
The Company has an ACL management "work group", which includes executive and senior management of the accounting and credit administration teams, who approve the key methodologies and assumptions, as well as the final ACL, on a quarterly basis.
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.
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 ACL is a valuation account that is 32 deducted from the loans’ recorded investment to present the net amount expected to be collected on the loans.
The ACL is a valuation account that is deducted from the loans' recorded investment to present the net amount expected to be collected on the loan portfolio.
Potential negative impacts include higher debt service burdens for floating rate loans and fixed rate loans 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.
Potential negative impacts may include higher debt service burdens for floating rate loans and fixed rate loans originated in a lower rate environment that reprice or mature, requiring 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.
(5) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $0.3 million and $0.8 million for the years ended December 31, 2024 and 2023, respectively. (6) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $100 thousand for both years ended December 31, 2024 and 2023.
(5) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $0.1 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively. (6) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $0.1 million for both years ended December 31, 2025 and 2024.
Net interest income (on a taxable equivalent basis) was $78.7 million for the year ended December 31, 2024 compared to $93.1 million for the year ended December 31, 2023, while net interest margin was 2.77% and 3.07% for the same respective periods.
Net interest income (on a taxable equivalent basis) was $78.9 million for the year ended December 31, 2025 compared to $78.7 million for the year ended December 31, 2024, while net interest margin was 3.17% and 2.77% for the same respective periods.
After-tax regulatory remediation expenses for 2024 and 2023 were $3.6 million and $8.1 million, respectively. Net Interest Income. Net interest income is the excess of interest earned on loans, investments, and other interest-earning assets over the interest paid on deposits and borrowings and is the Company’s primary revenue source.
Additionally, for 2024, the Company reported $3.6 million of after-tax regulatory remediation expenses, while none were reported for 2025. Net Interest Income. Net interest income is the excess of interest earned on loans, investments, and other interest-earning assets over the interest paid on deposits and borrowings and is the Company’s primary revenue source.
Restricted equity investments consisted of stock in the FHLB (carrying basis $9.4 million and $12.3 million at December 31, 2024 and 2023, respectively), FRB stock (carrying basis of $9.4 million and $5.9 million at December 31, 2024 and 2023, respectively), and stock in the Company’s correspondent bank (carrying basis of $468 thousand at both December 31, 2024 and 2023).
Restricted equity investments consisted of stock in the FHLB (carrying basis $9.1 million and $9.4 million at December 31, 2025 and 2024, respectively), FRB stock (carrying basis of $9.4 million at both December 31, 2025 and 2024, respectively), and stock in the Company’s correspondent bank (carrying basis of $0.5 million at both December 31, 2025 and 2024).
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.
Uninsured deposits at December 31, 2025 were $397.0 million. In the unlikely event that uninsured deposit balances exit the Bank over a short period of time, management could more than satisfy the liquidity demand with cash on-hand and FHLB borrowing capacity. Capital. Capital adequacy is an important measure of financial stability and performance.
Five Year Summary of Selected Financial Data As of and for the years ended December 31, (Dollars and shares in thousands, except per share data) 2024 2023 2022 2021 2020 Income Statement Data: Interest income $ 160,320 $ 168,995 $ 121,652 $ 103,546 $ 54,460 Interest expense 81,659 75,954 17,085 11,065 9,950 Net interest income 78,661 93,041 104,567 92,481 44,510 (Recovery of) provision for credit losses (5,100 ) 22,323 25,687 117 10,450 Net interest income after provision for credit losses 83,761 70,718 78,880 92,364 34,060 Noninterest income 13,573 28,375 47,945 86,988 55,850 Noninterest expense 113,841 157,937 104,629 110,988 67,236 (Loss) income from continuing operations before income tax expense (16,507 ) (58,844 ) 22,196 68,364 22,674 Income tax (benefit) expense attributable to continuing operations (1,122 ) (7,071 ) 5,199 15,740 4,837 Net (loss) income from continuing operations (15,385 ) (51,773 ) 16,997 52,624 17,837 Net income (loss) from discontinued operations — — 337 (144 ) (140 ) Net income from discontinued operations attributable to noncontrolling interest — — (1 ) (3 ) (1 ) Net (loss) income attributable to Blue Ridge Bankshares, Inc. $ (15,385 ) $ (51,773 ) $ 17,333 $ 52,477 $ 17,696 Per Common Share Data: Diluted (loss) earnings per share from continuing operations (1) $ (0.31 ) $ (2.73 ) $ 0.90 $ 2.95 $ 2.07 Dividends declared per share (1) — 0.245 0.490 0.435 0.285 Book value per common share (1) 3.86 9.69 13.13 14.76 12.61 Balance Sheet Data: Total assets $ 2,737,260 $ 3,117,554 $ 3,130,465 $ 2,665,139 $ 1,498,258 Loans held for investment, gross 2,111,797 2,430,947 2,411,059 1,807,578 1,016,694 Loans held for sale 30,976 46,337 69,534 121,943 152,931 Securities and investments 336,144 352,607 399,374 396,050 120,648 Total deposits 2,179,442 2,566,032 2,502,507 2,297,771 945,109 Subordinated notes, net 39,789 39,855 39,920 39,986 24,506 FHLB borrowings 150,000 210,000 311,700 10,111 115,000 FRB borrowings — 65,000 51 17,901 281,650 Stockholders' equity 327,788 185,989 248,793 277,139 108,200 Weighted average common shares outstanding - basic (1) 49,124 18,939 18,811 17,841 8,535 Weighted average common shares outstanding - diluted (1) 49,124 18,939 18,825 17,851 8,535 Financial Ratios: Return on average assets (0.51 )% (1.60 )% 0.61 % 1.86 % 1.44 % Return on average equity (5.31 )% (23.13 )% 6.57 % 21.50 % 17.65 % Net interest margin 2.77 % 3.07 % 4.00 % 3.51 % 3.49 % Efficiency ratio 123.43 % 130.08 % 68.60 % 62.15 % 67.49 % Dividend payout ratio — (8.97 )% 54.44 % 14.80 % 13.75 % Capital and Credit Quality Ratios: Average equity to average assets 9.60 % 6.92 % 9.34 % 8.65 % 7.08 % Allowance for credit losses to loans held for investment 1.09 % 1.48 % 1.27 % 0.67 % 1.36 % Nonperforming loans to total assets 0.93 % 2.02 % 2.69 % 0.60 % 0.44 % Nonperforming assets to total assets 0.94 % 2.02 % 2.70 % 0.61 % 0.44 % Net charge-offs to total loans held for investment 0.48 % 1.13 % 0.30 % 0.10 % 0.12 % (1) Share and per share figures have been adjusted for all periods presented to reflect the Company's 3-for-2 stock split effective April 30, 2021. 35 Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023 For the year ended December 31, 2024, the Company reported a net loss of $15.4 million compared to a net loss of $51.8 million for 2023.
Interest and penalties, if any, associated with unrecognized tax benefits are classified as additional income taxes in the consolidated statements of operations. 33 Five Year Summary of Selected Financial Data As of and for the years ended December 31, (Dollars and shares in thousands, except per share data) 2025 2024 2023 2022 2021 Income Statement Data: Interest income $ 137,773 $ 160,320 $ 168,995 $ 121,652 $ 103,546 Interest expense 58,912 81,659 75,954 17,085 11,065 Net interest income 78,861 78,661 93,041 104,567 92,481 (Recovery of) provision for credit losses (4,000 ) (5,100 ) 22,323 25,687 117 Net interest income after (recovery of) provision for credit losses 82,861 83,761 70,718 78,880 92,364 Noninterest income 12,836 13,573 28,375 47,945 86,988 Noninterest expense 81,922 113,841 157,937 104,629 110,988 Income (loss) from continuing operations before income tax expense 13,775 (16,507 ) (58,844 ) 22,196 68,364 Income tax expense (benefit) attributable to continuing operations 3,066 (1,122 ) (7,071 ) 5,199 15,740 Net income (loss) from continuing operations 10,709 (15,385 ) (51,773 ) 16,997 52,624 Net income (loss) from discontinued operations — — — 337 (144 ) Net income from discontinued operations attributable to noncontrolling interest — — — (1 ) (3 ) Net income (loss) attributable to Blue Ridge Bankshares, Inc. $ 10,709 $ (15,385 ) $ (51,773 ) $ 17,333 $ 52,477 Share Data: Diluted (loss) earnings per share from continuing operations (1) $ 0.11 $ (0.31 ) $ (2.73 ) $ 0.90 $ 2.95 Dividends declared per common share (1) 0.250 — 0.245 0.490 0.435 Book value per common share (1) 3.54 3.86 9.69 13.13 14.76 Common shares oustanding 91,475 84,973 19,198 18,950 18,774 Warrants to purchase common stock outstanding 24,320 31,452 — — — Balance Sheet Data: Total assets $ 2,432,589 $ 2,737,260 $ 3,117,554 $ 3,130,465 $ 2,665,139 Loans held for investment, gross 1,865,717 2,111,797 2,430,947 2,411,059 1,807,578 Loans held for sale 14,769 30,976 46,337 69,534 121,943 Securities and investments 356,854 336,144 352,607 399,374 396,050 Total deposits 1,911,162 2,179,442 2,566,032 2,502,507 2,297,771 Subordinated notes, net 14,716 39,789 39,855 39,920 39,986 FHLB borrowings 150,000 150,000 210,000 311,700 10,111 FRB borrowings — — 65,000 51 17,901 Stockholders' equity 323,691 327,788 185,989 248,793 277,139 Weighted average common shares outstanding - basic (1) 87,719 49,124 18,939 18,811 17,841 Weighted average common shares outstanding - diluted (1) 97,258 49,124 18,939 18,825 17,851 Financial Ratios: Return on average assets 0.41 % (0.51 )% (1.60 )% 0.61 % 1.86 % Return on average equity 3.18 % (5.31 )% (23.13 )% 6.57 % 21.50 % Net interest margin 3.17 % 2.77 % 3.07 % 4.00 % 3.51 % Efficiency ratio 89.34 % 123.43 % 130.08 % 68.60 % 62.15 % Capital and Credit Quality Ratios: Average equity to average assets 13.00 % 9.60 % 6.92 % 9.34 % 8.65 % Allowance for credit losses to loans held for investment 1.04 % 1.09 % 1.48 % 1.27 % 0.67 % Nonperforming loans to total assets 0.98 % 0.93 % 2.02 % 2.69 % 0.60 % Nonperforming assets to total assets 1.05 % 0.94 % 2.02 % 2.70 % 0.61 % Net (recoveries) charge-offs to total loans held for investment (0.02 )% 0.48 % 1.13 % 0.30 % 0.10 % (1) Share and per share figures for 2021 have been adjusted to reflect the Company's 3-for-2 stock split effective April 30, 2021. 34 Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024 For the year ended December 31, 2025, the Company reported net income of $10.7 million compared to a net loss of $15.4 million for 2024.
The cost of average interest-bearing liabilities increased to 3.72% in 2024 from 3.29% in 2023, while the cost of funds increased to 3.04% in 2024 from 2.56% in 2023.
The cost of average interest-bearing liabilities decreased to 3.29% in 2025 from 3.72% in 2024, while the cost of funds decreased to 2.66% in 2025 from 3.04% in 2024.
For the year ended December 31, 2024, the Company recorded an income tax benefit of $1.1 million (effective income tax rate of 6.8%) compared to income tax benefit of $7.1 million (effective income tax rate of 12.0%) for the same period of 2023.
For the year ended December 31, 2025, the Company recorded income tax expense of $3.1 million (effective income tax rate of 22.3%) compared to an income tax benefit of $1.1 million (effective income tax rate of 6.8%) for the same period of 2024.
On January 1, 2024, the Company became subject to these ratios. 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 December 31, 2024 and 2023.
Also presented as of December 31, 2024 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.
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.
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 in a manner similar to that if underwriting a loan.
If the net value applying these measures is less than the loan’s amortized cost, a specific reserve is recorded in the ACL and charged-off in the period when management believes the loan balance is no longer collectible. Credit losses are an inherent part of the Company’s business.
If the net value applying these measures is less than the loan's recorded investment, a specific reserve is recorded in the ACL and charged-off in the period when management believes the loan balance is no longer collectible.
As of December 31, 2024, all limits are in compliance. 40 The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed) as of December 31, 2024.
Also, concentration limits by real estate collateral type are approved and monitored by the Bank's board of directors. As of December 31, 2025, all limits are in compliance. 40 The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed) as of December 31, 2025.
Treasury and agencies 79,430 21.6 % 79,856 21.0 % State and municipal 50,233 13.7 % 50,682 13.3 % Corporate bonds 38,453 10.4 % 36,902 9.7 % Total $ 367,569 100.0 % $ 379,654 100.0 % 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 periods stated.
Treasury and agencies 78,828 21.1 % 79,430 21.6 % State and municipal 49,212 13.2 % 50,233 13.7 % Corporate bonds 32,702 8.8 % 38,453 10.4 % Total $ 373,178 100.0 % $ 367,569 100.0 % 45 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 the date and for the periods stated.
The Company's subordinated notes are comprised of a $25 million issuance in October 2019 maturing October 15, 2029 (the “2029 Notes”) and a $15 million issuance in May 2020 maturing June 1, 2030 (the “2030 Note”).
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 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 the its control.
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 may 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 2029 Notes bore interest at 5.625% per annum, through October 14, 2024, payable semi-annually in arrears. As of December 31, 2024, the 2029 Notes bore an annual interest rate of 8.98%.
The 2029 Notes bore interest at 5.625% per annum, through October 14, 2024, payable semi-annually in arrears.
As of December 31, 2024 Actual For Capital Adequacy Purposes To Be Well Capitalized Minimum Capital Ratios (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total risk based capital (to risk-weighted assets) 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 As of December 31, 2023 Actual For Capital Adequacy Purposes To Be Well Capitalized Minimum Capital Ratios (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total risk based capital (to risk-weighted assets) Blue Ridge Bank, N.A. $ 270,293 10.25 % $ 276,842 10.50 % $ 263,659 10.00 % $ 342,757 13.00 % Tier 1 capital (to risk-weighted assets) Blue Ridge Bank, N.A. $ 239,775 9.09 % $ 224,111 8.50 % $ 210,928 8.00 % n/a n/a Common equity tier 1 capital (to risk-weighted assets) Blue Ridge Bank, N.A. $ 239,775 9.09 % $ 184,562 7.00 % $ 171,379 6.50 % n/a n/a Tier 1 leverage (to average assets) Blue Ridge Bank, N.A. $ 239,775 7.49 % $ 128,001 4.00 % $ 160,001 5.00 % $ 320,003 10.00 % 50 Off-Balance Sheet Activities 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.
December 31, 2025 Actual For Capital Adequacy Purposes To Be Well Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total risk based capital (to risk-weighted assets) Blue Ridge Bank, N.A. $ 339,784 19.16 % $ 186,188 10.50 % $ 177,322 10.00 % Blue Ridge Bankshares, Inc. $ 370,984 20.69 % $ 143,427 8.00 % n/a n/a Tier 1 capital (to risk-weighted assets) Blue Ridge Bank, N.A. $ 322,320 18.18 % $ 150,724 8.50 % $ 141,858 8.00 % Blue Ridge Bankshares, Inc. $ 344,604 19.22 % $ 107,570 6.00 % n/a n/a Common equity tier 1 capital (to risk-weighted assets) Blue Ridge Bank, N.A. $ 322,320 18.18 % $ 124,125 7.00 % $ 115,259 6.50 % Blue Ridge Bankshares, Inc. $ 344,604 19.22 % $ 80,677 4.50 % n/a n/a Tier 1 leverage (to average assets) Blue Ridge Bank, N.A. $ 322,320 13.04 % $ 98,859 4.00 % $ 123,574 5.00 % Blue Ridge Bankshares, Inc. $ 344,604 13.81 % $ 99,777 4.00 % n/a n/a 50 December 31, 2024 Actual For Capital Adequacy Purposes To Be Well Capitalized Minimum Capital Ratios (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total risk based capital (to risk-weighted assets) 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 Off-Balance Sheet Activities 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.
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.
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.
As of December 31, 2024, the reserve for unfunded commitments to borrowers was $924 thousand compared to $3.1 million as of the same period in 2023. The unfunded commitments reserve is included in other liabilities on the consolidated balance sheets.
As of December 31, 2025, the reserve for unfunded commitments to borrowers was $0.8 million compared to $0.9 million as of the December 31, 2024. The unfunded commitments reserve is included in other liabilities on the Company's consolidated balance sheets.
December 31, 2024 2023 (Dollars in thousands) Amount Percent of Total Deposits Amount Percent of Total Deposits Noninterest-bearing demand $ 452,690 20.8 % $ 506,248 19.7 % Interest-bearing demand and money market 598,875 27.5 % 1,049,536 40.9 % Savings 100,857 4.6 % 117,923 4.6 % Time 1,027,020 47.1 % 892,325 34.8 % Total deposits $ 2,179,442 100.0 % $ 2,566,032 100.0 % 46 Estimated uninsured deposits totaled approximately $399.3 million as of December 31, 2024, or 18.0% of total deposits, compared to $573.9 million, or 22.3% of total deposits, as of December 31, 2023.
December 31, 2025 2024 (Dollars in thousands) Amount Percent of Total Deposits Amount Percent of Total Deposits Noninterest-bearing demand $ 398,541 20.9 % $ 452,690 20.8 % Interest-bearing demand and money market 612,648 32.1 % 598,875 27.5 % Savings 100,346 5.3 % 100,857 4.6 % Time 799,627 41.7 % 1,027,020 47.1 % Total deposits $ 1,911,162 100.0 % $ 2,179,442 100.0 % Estimated uninsured deposits totaled approximately $397.0 million as of December 31, 2025, or 19.4% of total deposits, compared to $399.3 million, or 18.0% of total deposits, as of December 31, 2024.
As previously noted, the Company adopted 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.
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.
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.
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.
The effective interest rate on the 2030 Note was 6.08% for the year ended December 31, 2024. 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.
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.
Securities in the investment portfolio may be classified as held to maturity, if the Company has the ability and intent to hold them to maturity, in which case they would be carried at amortized cost. The Company did not hold any investment securities classified as held to maturity as of December 31, 2024 or December 31, 2023.
Of the unrealized loss in the portfolio at December 31, 2025, approximately 84% was related to securities backed by U.S. government agencies. Securities in the investment portfolio may be classified as held to maturity, if the Company has the ability and intent to hold them to maturity, in which case they would be carried at amortized cost.
Excluding fintech BaaS deposits, estimated uninsured deposits were 18.1% and 18.2% of total deposits as of December 31, 2024 and 2023, respectively. Uninsured deposit amounts are based on estimates as of the reported date. The following table presents a summary of average deposits and the weighted average rate paid for the periods stated.
Uninsured deposit amounts are based on estimates as of the reported dates. The following table presents a summary of average deposits and the weighted average rate paid for the periods stated.
This analysis is provided to the 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.
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.
Pursuant to these investments, the Company commits to an investment amount that may be fulfilled in future periods. At December 31, 2024, the Company had future commitments outstanding totaling $7.1 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.
At December 31, 2025 and 2024, the Company had future commitments outstanding totaling $4.9 million and $7.1 million, respectively, 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.
(Dollars in thousands) Capacity Less: Outstanding Borrowings Available Balance Cash and due from banks $ 173,533 Fed funds sold 838 Unpledged securities available for sale 26,810 Total $ 201,181 Borrowings FHLB $ 696,044 $ 201,160 (1) $ 494,884 FRB 105,652 — 105,652 Unsecured line of credit 10,000 — 10,000 Total $ 811,696 $ 201,160 $ 610,536 Available liquidity as of December 31, 2024 $ 811,717 (1) Outstanding borrowings are comprised of advances of $150.0 million and letters of credit totaling $51.2 million, of which $50.0 million serves as collateral for public deposits with the Treasury Board of the Commonwealth of Virginia.
(Dollars in thousands) Capacity Less: Outstanding Borrowings Available Balance Cash and due from banks $ 115,949 Fed funds sold 1,851 Unpledged securities available for sale 158,654 Total $ 276,454 Borrowings FHLB $ 565,519 $ 201,160 (1) $ 364,359 FRB 72,755 — 72,755 Unsecured line of credit 10,000 — 10,000 Total $ 648,274 $ 201,160 $ 447,114 Available liquidity as of December 31, 2025 $ 723,568 (1) Outstanding borrowings are comprised of advances of $150.0 million and letters of credit totaling $51.2 million, of which $50 million served as collateral for public deposits with the Treasury Board of the Commonwealth of Virginia.
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.
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 generally includes properties that have been substantively repossessed or acquired in complete or partial satisfaction of debt.
The CECL Transitional Amount was $8.1 million, of which $4.1 million and $2.0 million reduced the regulatory capital amounts and capital ratios as of December 31, 2024 and 2023, respectively.
The Bank made this irrevocable election effective with its first quarter 2023 call report. 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 December 31, 2025 and 2024, respectively.
The Company reviews its available for sale investment securities portfolio for potential credit losses at least quarterly. At December 31, 2024 and 2023, the majority of securities in an unrealized loss position were of investment grade; however, a portion did not have a third-party investment grade available (securities with fair values of of $29.3 million and $20.5 million, respectively).
As of December 31, 2025 and 2024, the majority of the investment securities portfolio consisted of securities rated investment grade by a leading rating agency; however, a portion of securities in an unrealized loss position did not have a third-party investment grade available (securities with fair values of of $23.5 million and $29.3 million, respectively).
In addition, the Bank’s credit administration department led by its Chief Credit Officer performs a periodic analysis of emerging trends by geography where the Bank has the largest concentrations by CRE property type. The analysis includes all real estate property types and geographic markets represented in the loan portfolio.
The Bank’s credit administration department led by its Chief Credit Officer performs periodic analyses of emerging trends by geography and property type where the Bank has larger concentrations by CRE property type.
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.
Such properties, which are held for resale, are initially stated at fair value, including a reduction for the estimated selling expenses, which becomes the new carrying value. In subsequent periods, such properties are stated at the lower of the restated carrying value or fair value.
At December 31, 2024 and 2023, securities with a fair value of $268.9 million and $35.8 million, respectively, were pledged to secure the Bank's borrowing facility with the FHLB.
The Company did not hold any investment securities classified as held to maturity as of December 31, 2025 or December 31, 2024. At December 31, 2025 and 2024, securities with a fair value of $174.3 million and $268.9 million, respectively, were pledged to secure the Bank's borrowing facility with the FHLB.
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.
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 for a sustained period of time, generally six months, or when the loan otherwise becomes well-secured and in the process of collection.
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.
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.
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.
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.
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.
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.
For the Years Ended December 31, 2024 2023 (Dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Assets: Taxable securities $ 326,405 $ 9,406 2.88 % $ 358,122 $ 10,120 2.83 % Tax-exempt securities (1) 12,575 317 2.52 % 17,386 403 2.32 % Total securities 338,980 9,723 2.87 % 375,508 10,523 2.80 % Interest-earning deposits in other banks 157,087 7,993 5.09 % 119,361 5,367 4.50 % Federal funds sold 6,232 335 5.38 % 5,086 253 4.97 % Loans held for sale 57,225 8,157 14.25 % 56,951 8,022 14.09 % Loans held for investment (including loan fees) (2,3,4) 2,286,446 134,182 5.87 % 2,477,160 144,920 5.85 % Total average interest-earning assets 2,845,970 160,390 5.64 % 3,034,066 169,085 5.57 % Less: allowance for credit losses (31,896 ) (39,700 ) Total noninterest-earning assets 205,453 240,507 Total average assets $ 3,019,527 $ 3,234,873 Liabilities and stockholders’ equity: Interest-bearing demand, money market, and savings $ 921,674 $ 23,716 2.57 % $ 1,322,542 $ 37,195 2.81 % Time (5) 997,470 45,354 4.55 % 641,645 22,774 3.55 % Total interest-bearing deposits 1,919,144 69,070 3.60 % 1,964,187 59,969 3.05 % FHLB borrowings 213,003 9,095 4.27 % 263,259 11,784 4.48 % FRB borrowings 23,087 1,080 4.68 % 41,672 1,992 4.78 % Subordinated notes (6) 39,829 2,414 6.06 % 39,899 2,209 5.54 % Total average interest-bearing liabilities 2,195,063 81,659 3.72 % 2,309,017 75,954 3.29 % Noninterest-bearing demand deposits 493,133 661,053 Other noninterest-bearing liabilities 41,327 40,963 Stockholders’ equity 290,004 223,840 Total average liabilities and stockholders’ equity $ 3,019,527 $ 3,234,873 Net interest income and margin (7) $ 78,731 2.77 % $ 93,131 3.07 % Cost of funds (8) 3.04 % 2.56 % Net interest spread (9) 1.92 % 2.28 % (1) Computed on a fully taxable equivalent basis assuming a 22.32% and 22.65% income tax rate for the years ended December 31, 2024 and 2023, respectively.
For the Years Ended December 31, 2025 2024 (Dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Assets: Taxable securities $ 338,590 $ 10,426 3.08 % $ 326,405 $ 9,406 2.88 % Tax-exempt securities (1) 12,303 340 2.76 % 12,575 317 2.52 % Total securities 350,893 10,766 3.07 % 338,980 9,723 2.87 % Interest-earning deposits in other banks 134,213 5,569 4.15 % 157,087 7,993 5.09 % Federal funds sold 2,396 101 4.22 % 6,232 335 5.38 % Loans held for sale 20,309 4,607 22.68 % 57,225 8,157 14.25 % Loans held for investment (including loan fees) (2,3,4) 1,983,309 116,806 5.89 % 2,286,446 134,182 5.87 % Total average interest-earning assets 2,491,120 137,849 5.53 % 2,845,970 160,390 5.64 % Less: allowance for credit losses (22,167 ) (31,896 ) Total noninterest-earning assets 120,643 205,453 Total average assets $ 2,589,596 $ 3,019,527 Liabilities and stockholders’ equity: Interest-bearing demand, money market, and savings $ 723,761 $ 13,679 1.89 % $ 921,674 $ 23,716 2.57 % Time (5) 887,639 37,413 4.21 % 997,470 45,354 4.55 % Total interest-bearing deposits 1,611,400 51,092 3.17 % 1,919,144 69,070 3.60 % FHLB borrowings 150,000 5,806 3.87 % 213,003 9,095 4.27 % FRB borrowings — — — 23,087 1,080 4.68 % Subordinated notes (6) 26,697 2,014 7.54 % 39,829 2,414 6.06 % Total average interest-bearing liabilities 1,788,097 58,912 3.29 % 2,195,063 81,659 3.72 % Noninterest-bearing demand deposits 430,512 493,133 Other noninterest-bearing liabilities 34,441 41,327 Stockholders’ equity 336,546 290,004 Total average liabilities and stockholders’ equity $ 2,589,596 $ 3,019,527 Net interest income and margin (7) $ 78,937 3.17 % $ 78,731 2.77 % Cost of funds (8) 2.66 % 3.04 % Net interest spread (9) 2.24 % 1.92 % (1) Computed on a fully taxable equivalent basis assuming a 21.96% and 22.32% income tax rate for the years ended December 31, 2025 and 2024, respectively.

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