Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 31,~~November 3, 2023, the registrant had ~~19,191,060~~19,192,471 shares of common stock, no par value per share, outstanding.


	For the three months ended						For the six months ended						For the three months ended						For the nine months ended
(Dollars in thousands, except per share data)	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022			September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
INTEREST INCOME
Interest and fees on loans	$	34,839		$	23,787		$	74,133		$	47,686		$	38,551		$	30,206		$	114,009		$	77,892
Interest on securities, deposit accounts, and federal funds sold		4,134			2,456			7,893			4,359			3,934			2,940			11,826			7,299
Total interest income		38,973			26,243			82,026			52,045			42,485			33,146			125,835			85,191
INTEREST EXPENSE
Interest on deposits		14,624			1,541			25,955			3,097			16,115			3,032			42,070			6,129
Interest on subordinated notes		547			545			1,100			1,098			566			570			1,666			1,668
Interest on FHLB and FRB borrowings		3,399			67			7,209			92			3,612			867			10,821			959
Total interest expense		18,570			2,153			34,264			4,287			20,293			4,469			54,557			8,756
Net interest income		20,403			24,090			47,762			47,758			22,192			28,677			71,278			76,435
Provision for credit losses - loans		21,100			7,494			25,200			9,994			11,600			3,900			21,103			13,894
Provision (benefit) for credit losses - unfunded commitments		(600	)		—			(1,000	)		—			(550	)		—			(1,550	)		—
Total provision for credit losses		20,500			7,494			24,200			9,994			11,050			3,900			19,553			13,894
Net interest (loss) income after provision for credit losses		(97	)		16,596			23,562			37,764
Net interest income after provision for credit losses														11,142			24,777			51,725			62,541
NONINTEREST INCOME
Fair value adjustments of other equity investments		(281	)		(86	)		(332	)		9,278			55			(50	)		(277	)		9,228
Residential mortgage banking income, including MSRs		4,295			5,960			5,598			15,519			3,811			3,167			9,409			18,686
Gain on sale of guaranteed government loans		2,384			1,538			4,793			2,965			6			1,565			4,799			4,530
Wealth and trust management		462			414			894			805			462			513			1,356			1,318
Service charges on deposit accounts		349			327			692			642			365			354			1,057			996
Increase in cash surrender value of bank owned life insurance		292			276			574			548			311			398			885			946
Bank and purchase card, net		560			599			900			1,021			357			353			1,257			1,374
Loss on sale of securities available for sale														(649	)		—			(649	)		—
Other		1,675			1,162			3,900			3,506			2,697			1,668			6,597			5,174
Total noninterest income		9,736			10,190			17,019			34,284			7,415			7,968			24,434			42,252
NONINTEREST EXPENSE
Salaries and employee benefits		14,518			15,873			29,807			29,969			14,640			14,174			44,447			44,143
Occupancy and equipment		1,913			1,500			3,482			2,985			1,475			1,422			4,957			4,407
Data processing		1,131			874			2,477			1,820			1,710			1,332			4,187			3,152
Legal, issuer, and regulatory filing		2,753			618			3,987			1,000			912			804			4,899			1,704
Advertising and marketing		337			412			623			840			350			302			973			1,142
Communications		1,171			1,030			2,302			1,829			1,181			932			3,483			2,761
Audit and accounting fees		503			379			649			520			791			308			1,440			828
FDIC insurance		1,246			106			1,975			337			1,322			460			3,297			797
Intangible amortization		335			386			690			783			308			377			998			1,160
Other contractual services		3,218			999			4,157			1,533			1,492			703			5,649			1,803
Other taxes and assessments		803			671			1,605			1,241			802			711			2,407			1,952
Regulatory remediation		2,388			—			3,522			—			3,782			4,025			7,304			4,558
Merger-related		—			—			—			50			—			—			—			50
Goodwill impairment														26,826			—			26,826			—
ESOP litigation														6,000			—			6,000			—
Other		3,736			2,478			7,623			5,108			3,030			3,658			10,653			8,767
Total noninterest expense		34,052			25,326			62,899			48,015			64,621			29,208			127,520			77,224
(Loss) income from continuing operations before income tax expense		(24,413	)		1,460			(22,318	)		24,033			(46,064	)		3,537			(51,361	)		27,569
Income tax (benefit) expense		(4,949	)		342			(4,458	)		5,495			(4,693	)		801			(5,347	)		6,296
Net (loss) income from continuing operations	$	(19,464	)	$	1,118		$	(17,860	)	$	18,538		$	(41,371	)	$	2,736		$	(46,014	)	$	21,273
Discontinued Operations
Income from discontinued operations before income taxes		—			—			—			426			—			—			—			426
Income tax expense		—			—			—			89			—			—			—			89
Net income from discontinued operations		—			—			—			337			—			—			—			337
Net (loss) income	$	(19,464	)	$	1,118		$	(17,860	)	$	18,875		$	(41,371	)	$	2,736		$	(46,014	)	$	21,610
Net income from discontinued operations attributable to noncontrolling interest		—			—			—			(1	)		—			—			—			(1	)
Net (loss) income attributable to Blue Ridge Bankshares, Inc.	$	(19,464	)	$	1,118		$	(17,860	)	$	18,874		$	(41,371	)	$	2,736		$	(46,014	)	$	21,609
Net (loss) income available to common stockholders	$	(19,464	)	$	1,118		$	(17,860	)	$	18,874		$	(41,371	)	$	2,736		$	(46,014	)	$	21,609
Basic and diluted (loss) earnings per share from continuing operations	$	(1.03	)	$	0.06		$	(0.95	)	$	0.99		$	(2.18	)	$	0.15		$	(2.43	)	$	1.13
Basic and diluted earnings per share from discontinued operations	$	—		$	—		$	—		$	0.02		$	—		$	—		$	—		$	0.02
Basic and diluted (loss) earnings per share attributable to Blue Ridge Bankshares, Inc.	$	(1.03	)	$	0.06		$	(0.95	)	$	1.01		$	(2.18	)	$	0.15		$	(2.43	)	$	1.15

Note 2 – Adoption of New Accounting Standard

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13 - Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ~~(“ASU 2016-13”)~~ along with amendments ASU 2019-11 - Codification Improvements to Topic 326, Financial Instruments – Credit Losses, and ASU 2022-02 - Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). Together, these ASUs, referred to herein as Accounting Standards Codification (“ASC”) “ASC 326”, replace the incurred loss impairment methodology with the current expected credit loss methodology (“CECL”) and require consideration of a broader range of information to determine credit loss estimates at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASC 326

applies to financial assets subject to credit losses that are measured at amortized cost and certain off-balance sheet credit exposures, which include, but are not limited to, loans held for investment, leases, held to maturity (“HTM”) securities, loan commitments, and financial guarantees.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures, which included loans held for investment and commitments to extend credit (loan commitments and stand-by letters of credit), respectively. The Company does not have any securities classified as HTM. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326, while prior period amounts are reported in accordance with previously applicable GAAP.

The following table presents the impact to the consolidated balance sheet as the result of adopting ASC 326 effective January 1, 2023.


(Dollars in thousands)	January 1, 2023 Post-ASC 326 Adoption			December 31, 2022 Pre-ASC 326 Adoption			Impact of ASC 326 Adoption				January 1, 2023 Post-ASC 326 Adoption			December 31, 2022 Pre-ASC 326 Adoption			Impact of ASC 326 Adoption
Assets:
Loans held for investment, net of deferred fees and costs	$	2,399,757		$	2,399,092		$	665			$	2,399,757		$	2,399,092		$	665
Allowance for credit losses		(26,961	)		(22,939	)		(4,022	)			(38,158	)		(30,740	)		(7,418	)
Deferred tax asset, net		10,757			9,182			1,575				14,561			12,227			2,334
Liabilities:
Reserve for unfunded commitments1		5,504			1,812			3,692
Reserve for unfunded commitments (1)												5,504			1,812			3,692
Stockholders' Equity:
Retained earnings		102,788			108,262			(5,474	)			89,571			97,682			(8,111	)
1 Included in other liabilities on the consolidated balance sheets
(1) Included in other liabilities on the consolidated balance sheets										(1) Included in other liabilities on the consolidated balance sheets

Loans Held for Investment and Allowance for Credit Losses (“ACL”). Loans that management has the intent and ability to hold for the foreseeable future or until loan maturity or pay-off are reported held for investment at their outstanding principal balance adjusted for any charge-offs and net of any deferred fees (including purchase accounting adjustments) and origination costs (collectively referred to as ~~"amortized cost"~~“amortized cost”). Loan origination fees and certain direct origination costs are deferred and amortized as an adjustment of the yield using the payment terms required by the loan contract.

Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past due less than 90 days and the borrower demonstrates the ability to pay and remain current. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company's policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not be placed on nonaccrual status, if the Company determines that the loans are well-secured and are in the process of collection. In accordance with ASC 326, the Company elected to exclude accrued interest from the

amortized cost basis in its determination of the ACL for loans held for investment, and will instead reverse accrued but unpaid interest through interest income in the period in which the loan is placed on nonaccrual status.

The ACL 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. 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 ACL is a valuation account that is deducted from the loans' amortized cost ~~basis~~ to present the net amount expected to be collected on the loans.

Management’s determination of the adequacy of the ACL under ASC 326 is based on an evaluation of the composition of the loan portfolio, current economic conditions, historical loan loss experience, reasonable and supportable forecasts, and other risk factors. The Company uses a third-party CECL model in estimating the ACL on a quarterly basis. Loans with similar risk characteristics are collectively assessed within pools (or segments). Loss estimates within the collectively assessed population are based on a combination of pooled assumptions and loan-level characteristics. The Company has determined that using federal call codes is an appropriate loan segmentation methodology, as it is generally based on risk characteristics of a loan's underlying collateral. Using federal call codes

also allows the Company to utilize and assess publicly-available external information when developing its estimate of the ACL. The discounted cash flow ("DCF") method is the primary credit loss estimation methodology used by the Company and involves estimating future cash flows for each individual loan and discounting them back to their present value using the loan's contractual interest rate, which is adjusted for any net deferred fees, costs, premiums, or discounts existing at the loan's origination or acquisition date (also referred to as the effective interest rate). The DCF method also considers factors such as loan term, prepayment or curtailment assumptions, and other relevant economic factors that could affect future cash flows. By discounting the cash flows, this method incorporates the time value of money and reflects the credit risk inherent in the loan.

In applying future economic forecasts, the Company utilizes a forecast period of one year and then reverts to the mean of historical loss rates on a straight-line basis over the following one-year period. The Company considers economic forecasts of national gross domestic product and unemployment rates from the Federal Open Market Committee to inform the model for loss estimation. 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., $3 - $5 billion of total assets) and in similar markets. Management also considers qualitative adjustments when estimating loan losses to take into account the model's quantitative limitations. Qualitative adjustments to quantitative loss factors, either negative or positive, may include considerations of trends in delinquencies, nonaccrual loans, charged-off loans, changes in volume and terms of loans, effects of changes in lending policy, experience and depth of management, regional and local economic trends and conditions, concentrations of credit, competition, and loan review results.

For those loans that do not share similar risk characteristics, the Company evaluates the ACL needs on an individual (or loan by loan) basis. 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. Measurement of credit loss is based on the expected future cash flows of an individually evaluated loan, discounted at the loan's effective interest rate, or measured on an observable market value, if one exists, or the estimated market value of the collateral underlying the loan discounted for estimated costs to sell the collateral for collateral-dependent loans. 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.

The Company’s allowance committee approves the key methodologies and assumptions, as well as the final ACL, on a quarterly basis. 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. In addition, bank regulatory agencies and the ~~Bank’s~~Company's independent auditors periodically review its ACL and may require an

increase in the ~~provision for credit losses~~ACL or the recognition of further loan charge-offs, based on judgments different than those of management.

Upon the adoption of ASC 326, the Company recorded an increase in its ACL of $~~4.0~~7.4 million, along with an after-tax cumulative effect adjustment, which reduced stockholders' equity by $~~2.6~~5.2 million.

Collateral-dependent Loans

The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral-dependent loans:

•

Commercial real estate loans may be secured by either owner occupied commercial real estate or non-owner occupied commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies. Repayment is generally from the cash flows of the business occupying the property. Non-owner occupied commercial real estate loans are generally secured by office buildings, ~~and complexes,~~ retail facilities, multifamily ~~complexes,~~properties, land under development, industrial properties, as well as other commercial or industrial real estate.

•

Commercial and industrial loans may be secured by non-real estate collateral such as accounts receivable, inventory, equipment, or other similar assets.

•

Residential real estate loans are typically secured by first mortgages, and in some cases ~~could be~~ secured by a second mortgage.

•

Home equity lines of credit are generally secured by second mortgages on residential real estate property.

•

Consumer loans are generally secured by automobiles, recreational vehicles, and other personal property. Some consumer loans are unsecured, have no underlying collateral, and would not be considered collateral-dependent.

Acquired Loans

The Company has acquired loans through its mergers with Bay Banks of Virginia, Inc. in 2021 (the "Bay Banks Merger") and Virginia Community Bankshares, Inc. in 2019. Prior to the adoption of ASC 326, a portion of these loans were classified as purchased-credit impaired ("PCI") under ASC 310-30 – Loans and Debt Securities Acquired with Deteriorated Credit Quality. Upon the adoption of ASC 326, the Company elected to designate its existing PCI loans as purchased credit deteriorated ("PCD") loans using the prospective transition approach. Previously established PCI loan "pools" were eliminated, and, as a result, an increase in the ACL for PCD loans of $665 thousand was recorded, and a corresponding increase in the amortized cost basis of loans held for investment was recorded. This amount represented the then-existing credit discount. The amortized cost of PCD loans post ASC 326 adoption on January 1, 2023 was $59.3 million, which includes a non-credit discount of $5.6 million that will be accreted into interest income over the remaining contractual lives of the underlying loans.

Modified Loans

ASU 2022-22 eliminated the concept of troubled debt restructurings ("TDRs") from the accounting standards for companies that have adopted ASC 326. ASU 2022-02 requires additional disclosures for certain loan modifications and disclosures of gross charge-offs by year of origination. Specifically, loan modification disclosures in periods subsequent to the adoption of ASC 326 must be made for modifications of existing loans to borrowers who were experiencing financial difficulties at the time of the modification. The modification type must include a direct change in the timing or amount of a loan's contractual cash flows. The additional disclosures are applicable to situations where there is: principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or any combination thereof.

Available for Sale ("AFS") Securities. The Company evaluates the fair value and credit quality of its AFS securities portfolio on a quarterly basis. In the event the fair value of a security falls below its amortized cost basis, the security is evaluated to determine whether the decline in value was caused by changes in market interest rates or

security credit quality. The primary indicators of credit quality for the Company’s AFS securities portfolio are security type and credit rating, which is influenced by a number of ~~security-specific~~security specific factors that may include obligor cash flow, geography, seniority, and others. If unrealized losses are related to credit quality, the Company estimates the credit-related loss by evaluating the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. Subsequent to the adoption of ASC 326, if the present value of cash flows expected to be collected is less than the amortized cost basis of the security and a credit loss exists, then an ACL is recorded for the credit loss, limited by the amount that the fair value is less than amortized cost basis. As of December 31, 2022, the Company did not have any other-than-temporarily impaired AFS securities; therefore, upon adoption of ASC 326, an ACL onfor AFS securities was not warranted.

Reserve for Unfunded Commitments. The Company estimates expected credit losses over the contractual period ~~in which~~when the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally ~~cancellable~~cancelable by the Company. The reserve for unfunded commitments is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, the existence of any third-party guarantees, and an estimate of credit losses on commitments expected to be funded is determined using the same loss rates of similar financial instruments derived in the estimation of ACL for loans held for investment. Upon the adoption of ASC 326, the Company recorded an increase in its reserve for unfunded commitments of $3.7 million, along with an after-tax cumulative effect adjustment, which reduced stockholders' equity by $2.9 million.

As of ~~June~~September 30, 2023 and December 31, 2022, securities with a fair value of $~~178.8~~25.0 million and $241.9 million, respectively, were pledged to secure the Bank’s line of credit with the Federal Home Loan Bank of Atlanta (“FHLB”). As of ~~June~~September 30, 2023 the Company pledged securities with $~~108.7~~267.0 million of par value (amortized cost and fair value of $~~109.6~~269.0 million and $~~90.0~~216.0 million, respectively) as collateral for the Bank Term Funding Program (“BTFP”), established by the Board of Governors of the Federal Reserve System on March 12, 2023. The BTFP was created in response to industry events to provide banks with additional liquidity via a secured line of credit collateralized by eligible pledged securities. In addition, securities with a fair value of $~~11.6~~11.2 million and $0 were pledged as of ~~June~~September 30, 2023 and December 31, 2022, respectively, to secure potential borrowings from the Federal Reserve Bank of Richmond (“FRB”) Discount Window.

The following table presents the amortized cost and fair value of securities available for sale by contractual maturity as of the date stated. Expected maturities may differ from contractual maturities, as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2023

(Dollars in thousands)

Amortized
Cost

Fair
Value

Due in one year or less

$
502

$
502

Due after one year through five years

34,949

31,921

Due after five years through ten years

138,894

119,581

Due after ten years

226,390

188,613

Total

$
400,735

$
340,617


	September 30, 2023
(Dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	2	$	2
Due after one year through five years		40,689		36,416
Due after five years through ten years		131,518		109,844
Due after ten years		211,522		167,668
Total	$	383,731	$	313,930

The Company reviews its AFS securities portfolio for potential credit losses no less than quarterly. At ~~June~~September 30, 2023 and December 31, 2022, the majority of securities in an unrealized loss position were of investment grade; however, a few did not have a third-party investment grade available. These ungraded securities were primarily subordinated debt instruments issued by bank holding companies and are classified as corporate bonds in the tables above. Investment securities with unrealized losses are generally a result of pricing changes due to changes in the interest rate environment since purchase and not as a result of permanent credit impairment. Contractual cash flows for mortgage backed securities are guaranteed and/or funded by the U.S. government. Municipal securities show no indication that the contractual cash flows will not be received when due. The Company does not intend to sell, nor does it believe that it will be required to sell, any of its temporarily impaired securities prior to the recovery of the amortized cost. As of ~~June~~September 30, 2023, there was no ACL ~~against~~for the Company's AFS securities portfolio.

Restricted equity investments consisted of stock in the FHLB (carrying value of $~~10.9~~9.4 million and $14.7 million as of ~~June~~September 30, 2023 and December 31, 2022, respectively), stock in the FRB (carrying value of $6.1 million at both ~~June~~September 30, 2023 and December 31, 2022), and stock in the Bank’s correspondent bank (carrying value of $468 thousand at both ~~June~~September 30, 2023 and December 31, 2022). Restricted equity investments are carried at cost.

The Company also has various other equity investments, including shares in other financial institutions and fintech companies, totaling $~~22.7~~22.1 million and $23.8 million as of ~~June~~September 30, 2023 and December 31, 2022, respectively, which are carried at fair value with any gain or loss reported in the consolidated statements of operations each reporting period. As no actively traded market exists for substantially all of the Company's other equity investments, fair value adjustments are determined by reviewing recent observable market transactions, such as stock or equity transactions, that are substantially similar to the Company's existing investments. Other equity investments are also periodically

evaluated for impairment using information obtained either directly from the investee or from a third-party broker. If an impairment has been identified, the carrying value of the investment is written down to its estimated fair market value through a charge to earnings.

Note 4 – Loans and ACL

All loan and ACL information presented as of and for the three and ~~six~~nine months ended ~~June~~September 30, 2023 is in accordance with ASC 326. All loan information presented prior to this period is presented in accordance with

previously applicable GAAP. As a result, the presentation of information pre-ASC 326 and post-ASC 326 adoption will not be comparable for most disclosures.

The following table presents the amortized cost of loans held for investment, including Paycheck Protection Program ("PPP") loans, as of the dates stated.


(Dollars in thousands)	September 30, 2023		December 31, 2022
Commercial and industrial	$	532,999	$	590,049
Paycheck Protection Program		6,414		11,967
Real estate – construction, commercial		162,860		183,301
Real estate – construction, residential		76,896		76,599
Real estate – mortgage, commercial		879,655		864,989
Real estate – mortgage, residential		721,383		631,772
Real estate – mortgage, farmland		6,150		6,599
Consumer		59,528		47,423
Gross loans		2,445,885		2,412,699
Less: deferred loan fees, net of costs		485		(1,640	)
Total	$	2,446,370	$	2,411,059

(Dollars in thousands)

June 30, 2023

December 31, 2022

Commercial and industrial

$
545,921

$
590,049

Paycheck Protection Program

7,234

11,967

Real estate – construction, commercial

165,863

183,301

Real estate – construction, residential

82,199

76,599

Real estate – mortgage, commercial

879,729

864,989

Real estate – mortgage, residential

709,565

631,772

Real estate – mortgage, farmland

5,583

6,599

Consumer

62,510

47,423

Gross loans

2,458,604

2,412,699

Less: deferred loan fees, net of costs

327

(1,640
)
Total

$
2,458,931

$
2,411,059

The Company has pledged certain commercial and residential mortgages as collateral for borrowings with the FHLB. Loans totaling $~~601.9~~765.7 million and $436.0 million were pledged as of ~~June~~September 30, 2023 and December 31, 2022, respectively. Additionally, PPP loans were pledged as collateral for the FRB's Paycheck Protection Program Liquidity Facility ("PPPLF") advances in the amount of $0 and $51 thousand as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

The following table presents the aging of the amortized cost of loans held for investment by loan category as of the date stated.


	June 30, 2023												September 30, 2023
(Dollars in thousands)	Current Loans		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total Loans		Current Loans		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total Loans
Commercial and industrial	$	482,419	$	1,654	$	—	$	—	$	61,848	$	545,921	$	472,291	$	2,543	$	1,748	$	1,528	$	54,889	$	532,999
Paycheck Protection Program		7,234		—		—		—		—		7,234		6,414		—		—		—		—		6,414
Real estate – construction, commercial		162,176		2,329		313		—		1,045		165,863		156,722		3,541		—		—		2,597		162,860
Real estate – construction, residential		80,818		727		—		—		654		82,199		75,831		—		—		—		1,065		76,896
Real estate – mortgage, commercial		866,968		462		1,104		—		11,195		879,729		867,480		—		1,104		—		11,071		879,655
Real estate – mortgage, residential		698,181		389		571		1,998		8,426		709,565		710,944		373		449		2,016		7,601		721,383
Real estate – mortgage, farmland		5,583		—		—		—		—		5,583		6,150		—		—		—		—		6,150
Consumer		59,530		1,370		658		405		547		62,510		56,766		1,435		313		379		635		59,528
Less: Deferred loan fees, net of costs		327		—		—		—		—		327		485		—		—		—		—		485
Total Loans	$	2,363,236	$	6,931	$	2,646	$	2,403	$	83,715	$	2,458,931	$	2,353,083	$	7,892	$	3,614	$	3,923	$	77,858	$	2,446,370

The following table presents the amortized cost of nonaccrual loans held for investment by loan category as of the date stated.

June 30, 2023

(Dollars in thousands)

Nonaccrual Loans with No ACL

Nonaccrual Loans with an ACL

Total Nonaccrual Loans

Commercial and industrial

$
27

$
61,821

$
61,848

Real estate – construction, commercial

—

1,045

1,045

Real estate – construction, residential

—

654

654

Real estate – mortgage, commercial

10,102

1,093

11,195

Real estate – mortgage, residential

879

7,547

8,426

Consumer

1

546

547

Total

$
11,009

$
72,706

$
83,715

~~Nonaccrual loans increased $73.4~~ ~~million to $83.7~~ ~~million as of June 30, 2023 from $10.3~~ ~~million as of December 31, 2022. Of this increase, $37.3~~ ~~million was due to~~ ~~one~~ ~~commercial and industrial loan that was placed on nonaccrual status in the second quarter of 2023, discussed further in the modified loans section below.~~


	September 30, 2023
(Dollars in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with an ACL		Total Nonaccrual Loans
Commercial and industrial	$	—	$	54,889	$	54,889
Real estate – construction, commercial		2,100		497		2,597
Real estate – construction, residential		—		1,065		1,065
Real estate – mortgage, commercial		5,519		5,552		11,071
Real estate – mortgage, residential		866		6,735		7,601
Consumer		—		635		635
Total	$	8,485	$	69,373	$	77,858

The Company recognized $0 and $89 thousand of interest income from nonaccrual loans during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively.

The Company ~~categorizes~~segments loans held for investment into risk categories based on relevant information about the expected ability and willingness of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. Management considers loan risk grades to be the best indication of credit quality of its portfolio of loans held for investment. The Company uses the following definitions for loan risk grades and periodically evaluates the appropriateness of these grades across its loan portfolio. Independent third-party loan reviews are periodically performed on the Company's loan portfolio and such reviews are used to verify management's determination of loan risk grades. Bank regulatory agencies also periodically review the Company's loan portfolio, including loan risk ~~grades. Loan risk~~ grades ~~as determined by management~~and may, ~~be changed by regulators,~~on occasion, change a grade based on their judgment of the facts at the time of review.

Risk Grade 1 – Strong: This grade is reserved for loans to the strongest of borrowers. These loans are to individuals or corporations that are well known to the Bank and are always secured with an almost guaranteed source of repayment such as a lien on a bank deposit account. Character, credit history, and ability of individuals or company principals are excellent and unquestioned. Source of income and industry of borrower appears stable. High liquidity, minimum risk, good ratios, and low handling cost are present.

Risk Grade 2 – Minimal: This grade is reserved for loans to borrowers who are deemed exceptionally strong. These loans are within guidelines and where the borrowers have documented significant overall financial strength. These loans have excellent sources of repayment, significant balance sheet liquidity, no significant identifiable risk of collection, and conform in all respects to policy, guidelines, underwriting standards, and federal and state regulations (no exceptions of any kind). In addition, guarantor support, when available, is viewed as excellent.

Risk Grade 3 – Acceptable: This grade is reserved for loans to borrowers who are deemed strong. These loans have adequate sources of repayment, with little identifiable risk of collection. Generally, loans assigned this risk grade will demonstrate the following characteristics: (1) conformity in all respects with policy, guidelines, underwriting standards, and federal and state regulations (no exceptions of any kind), (2) documented historical cash flow that meets or exceeds required minimum guidelines, or that can be supplemented with verifiable cash flow from other sources, and (3) adequate secondary sources to liquidate the debt. In addition, guarantor support, when available, is viewed as strong.

Risk Grade 4 – Satisfactory: This grade is given to satisfactory loans containing more risk than Risk Grade 3 ~~loans.~~loans and where the borrower is still viewed as sound. These loans have adequate sources of repayment, with little identifiable risk of collection. Loans assigned this risk grade will demonstrate the following characteristics: (1) general conformity to the Bank's underwriting requirements, with limited exceptions to policy, product, or underwriting guidelines. All exceptions noted have documented mitigating factors that offset any additional risk associated with the exceptions noted, (2) documented historical cash flow that meets or exceeds required minimum guidelines, or that can be supplemented with verifiable cash flow from other sources, and (3) adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor.

Risk Grade 5 – Watch: This grade is for satisfactory loans containing acceptable but elevated risk. These loans are characterized by borrowers who have a marginal cash flow, marginal profitability, or have experienced an unprofitable year and declining financial condition. The borrower's management may be deemed to be satisfactory, the collateral securing the loan may create a loan-to-value ratio in excess of 90%, the debt service coverage ratio and global debt service coverage are unstable but mostly positive, and/or guarantor support, if any, is inadequate. Loans classified as Watch warrant additional monitoring by management.

Risk Grade 6 – Special Mention: This grade is for loans that have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the Bank's credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Special mention credits typically exhibit underwriting guideline tolerances and/or exceptions with no mitigating factors, or emerging weaknesses that may or may not be cured as time passes.

Risk Grade 7 – Substandard: A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans consistently not meeting the repayment schedule should be downgraded further to substandard. Loans in this category are characterized by deterioration in quality exhibited by any number of well-defined weaknesses requiring corrective action. The weaknesses may include, but are not limited to: (1) high debt to worth ratios, (2) declining or negative earnings trends, (3) declining or inadequate liquidity, (4) improper loan structure, (5) questionable repayment sources, (6) lack of well-defined secondary repayment source, and (7) unfavorable competitive comparisons. Such loans are no longer considered to be adequately protected due to the borrower's declining net worth, lack of earnings capacity, declining collateral margins, and/or unperfected collateral positions. The possibility of loss of a portion of the loan balance cannot be ruled out. The repayment ability of the borrower is marginal or weak and the loan may have exhibited excessive overdue status or extensions and/or renewals.

Risk Grade 8 – Doubtful: Loans classified doubtful have all the weaknesses inherent in loans classified substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the Bank's position, which can include, but not limited to (1) an injection of capital, (2) alternative financing, and (3) liquidation of assets or the pledging of additional collateral. Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is charged off against the allowance for credit losses.

Risk Grade 9 – Loss: Loans classified loss are considered ~~uncollectable~~uncollectible and of such little value that their continuance as assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer charging off the worthless loan, even though partial recovery may be effected in the future. Probable loss portions of doubtful loans are charged off promptly against the allowance for credit losses.

The following table presents the amortized cost of loans held for investment by internal loan risk grade by year of origination as of ~~June~~September 30, 2023. Also presented are current period gross charge-offs by loan type for the ~~six~~nine months ended ~~June~~September 30, 2023.


	Term Loans Amortized Cost Basis by Origination Year																Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial and industrial
Risk Grades 1 - 4	$	36,665	$	131,441	$	44,931	$	31,890	$	12,814	$	17,085	$	135,331	$	410,157	$	33,067	$	140,132	$	36,097	$	27,087	$	11,425	$	16,388	$	131,422	$	395,618
Risk Grades 5 - 6		28,363		1,904		9,964		6,793		450		1,827		17,375		66,676		26,097		2,123		12,446		6,427		790		1,775		23,641		73,299
Risk Grade 7		—		55,429		2,172		3,253		870		44		1,567		63,335		—		3,731		2,460		3,421		825		36		2,620		13,093
Risk Grade 8		—		5,338		36		—		—		—		379		5,753		—		48,160		2,450		—		—		379		—		50,989
Total		65,028		194,112		57,103		41,936		14,134		18,956		154,652		545,921		59,164		194,146		53,453		36,935		13,040		18,578		157,683		532,999
Current period gross charge-offs		—		198		39		—		625		9		7,224		8,095		1,334		7,214		248		232		725		43		131		9,927

Paycheck Protection Program
Risk Grades 1 - 4		—		—		7,234		—		—		—		—		7,234		—		—		6,414		—		—		—		—		6,414
Total		—		—		7,234		—		—		—		—		7,234		—		—		6,414		—		—		—		—		6,414

Real estate – construction, commercial
Risk Grades 1 - 4		4,684		56,296		46,538		16,193		2,345		8,865		10,820		145,741		7,496		65,904		36,512		15,800		2,104		5,759		11,530		145,105
Risk Grades 5 - 6		—		6,464		6,252		532		—		840		5,792		19,880		3,370		6,851		2,020		—		—		748		3,621		16,610
Risk Grade 7		—		—		—		—		—		242		—		242		119		—		—		532		18		476		—		1,145
Total		4,684		62,760		52,790		16,725		2,345		9,947		16,612		165,863		10,985		72,755		38,532		16,332		2,122		6,983		15,151		162,860
Current period gross charge-offs		—		—		—		—		—		28		—		28		—		—		—		—		—		28		—		28

Real estate – construction, residential
Risk Grades 1 - 4		27,215		39,151		7,998		347		1,194		71		2,046		78,022		31,389		33,009		2,659		63		946		69		1,987		70,122
Risk Grades 5 - 6		—		2,278		473		585		—		—		240		3,576		1,288		3,566		—		169		241		—		—		5,264
Risk Grade 7		21		580		—		—		—		—		—		601		21		580		462		447		—		—		—		1,510
Total		27,236		42,009		8,471		932		1,194		71		2,286		82,199		32,698		37,155		3,121		679		1,187		69		1,987		76,896

Real estate – mortgage, commercial
Risk Grades 1 - 4		29,516		268,410		113,715		153,897		44,080		144,333		11,689		765,640		13,996		289,696		123,153		136,403		39,800		132,130		21,357		756,535
Risk Grades 5 - 6		—		25,746		4,757		16,870		13,304		31,823		4,042		96,542		2,353		24,797		5,767		16,959		15,943		31,425		4,065		101,309
Risk Grade 7		—		—		6,307		2,180		131		8,831		98		17,547		331				8,266		4,647		112		8,455		—		21,811
Total		29,516		294,156		124,779		172,947		57,515		184,987		15,829		879,729		16,680		314,493		137,186		158,009		55,855		172,010		25,422		879,655

Real estate – mortgage, residential
Risk Grades 1 - 4		50,358		204,528		117,255		71,731		29,032		146,643		57,415		676,962		41,916		209,899		124,713		70,812		28,702		139,827		55,703		671,572
Risk Grades 5 - 6		35		8,570		24		1,605		2,482		6,475		1,189		20,380		11,372		8,325		184		1,627		1,895		6,935		1,663		32,001
Risk Grade 7		—		650		2,287		1,934		611		6,417		324		12,223		—		2,263		2,005		1,980		996		10,438		128		17,810
Total		50,393		213,748		119,566		75,270		32,125		159,535		58,928		709,565		53,288		220,487		126,902		74,419		31,593		157,200		57,494		721,383
Current period gross charge-offs		—		744		—		498		—		14		—		1,256		—		744		—		498		—		14		—		1,256

Real estate – mortgage, farmland
Risk Grades 1 - 4		—		729		1,424		—		1,549		1,624		211		5,537		—		875		1,809		—		1,535		1,573		209		6,001
Risk Grades 5 - 6		—		—		—		—		—		—		46		46		149		—		—		—		—		—		—		149
Total		—		729		1,424		—		1,549		1,624		257		5,583		149		875		1,809		—		1,535		1,573		209		6,150

Consumer
Risk Grades 1 - 4		23,641		17,070		4,779		3,875		1,854		970		9,043		61,232		22,899		15,567		4,204		3,198		1,471		666		10,268		58,273
Risk Grades 5 - 6		56		54		11		71		4		444		30		670		64		51		13		16		14		440		30		628
Risk Grade 7		15		159		125		118		85		106		—		608		14		223		87		117		56		130		—		627
Total		23,712		17,283		4,915		4,064		1,943		1,520		9,073		62,510		22,977		15,841		4,304		3,331		1,541		1,236		10,298		59,528
Current period gross charge-offs		571		156		131		23		41		27		1		950		1,083		280		200		31		48		57		—		1,699

Total Loans
Risk Grades 1 - 4	$	172,079	$	717,625	$	343,874	$	277,933	$	92,868	$	319,591	$	226,555	$	2,150,525	$	150,763	$	755,082	$	335,561	$	253,363	$	85,983	$	296,412	$	232,476	$	2,109,640
Risk Grades 5 - 6		28,454		45,016		21,481		26,456		16,240		41,409		28,714		207,770		44,693		45,713		20,430		25,198		18,883		41,323		33,020		229,260
Risk Grade 7		36		56,818		10,891		7,485		1,697		15,640		1,989		94,556		485		6,797		13,280		11,144		2,007		19,535		2,748		55,996
Risk Grade 8		—		5,338		36		—		—		—		379		5,753		—		48,160		2,450		—		—		379		—		50,989
Total	$	200,569	$	824,797	$	376,282	$	311,874	$	110,805	$	376,640	$	257,637	$	2,458,604	$	195,941	$	855,752	$	371,721	$	289,705	$	106,873	$	357,649	$	268,244	$	2,445,885
Total current period gross charge-offs	$	571	$	1,098	$	170	$	521	$	666	$	78	$	7,225	$	10,329	$	2,417	$	8,238	$	448	$	761	$	773	$	142	$	131	$	12,910

~~The table above includes one~~Of the $~~5.3~~51.0 million of commercial and industrial ~~loan~~loans classified as doubtful (risk grade 8) as of ~~June~~September 30, 2023, ~~which~~$48.2 million was ~~fully reserved~~attributable to a group of specialty finance loans with a collective specific reserve of $21.8 million as of the same date. There were no loans classified as loss (risk grade 9) as of ~~June~~September 30, 2023.

The following table presents an analysis of the change in the ACL by major loan segment for the period stated. Loan segments are presented as either commercial or consumer as follows:

The increase in the ACL during the ~~six~~nine months ended ~~June~~September 30, 2023 was primarily attributable to specific reserve needs ~~of $14.1~~ ~~million~~ for a portfolio of specialty finance loans (classified as commercial and industrial loans) and $~~4.0~~7.4 million due to the adoption of ASC 326 effective January 1, 2023. Of the $~~9.0~~ ~~million and $10.3~~12.9 million in gross loan charge-offs for the ~~three and six~~nine months ended ~~June~~September 30, 2023, ~~respectively,~~ $7.0 million was attributable to one commercial and industrial loan that was fully charged-off in the second quarter of 2023.

~~Other than the aforementioned, there~~There were no material changes to the assumptions, loss factors (both quantitative and qualitative), or reasonable and supportable forecasts used in the estimation of the ACL and the provision for credit losses for loans held for investment as of and for the ~~six~~nine months ended ~~June~~September 30, 2023.

The following table presents the amortized cost of collateral-dependent loans as of the date stated.


(Dollars in thousands)	June 30, 2023		September 30, 2023
Commercial and industrial	$	94,743	$	83,437
Real estate – construction, commercial		5,792		6,635
Real estate – construction, residential		1,646		2,299
Real estate – mortgage, commercial		17,403		18,352
Real estate – mortgage, residential		1,735		3,029
Total collateral-dependent loans	$	121,319	$	113,752

As of ~~June~~September 30, 2023, the amortized cost of PCD loans totaled $~~57.1~~56.6 million with an estimated ACL of $~~601~~556 thousand. The remaining non-credit discount on PCD loans was $~~5.0~~4.5 million as of ~~June~~September 30, 2023.

The Company closely monitors the performance of borrowers experiencing financial difficulty ~~to understand the effectiveness of its~~that have been granted certain loan ~~modification efforts.~~modifications it would otherwise not consider.

The following table presents information on modified loans as of the date stated.


	June 30, 2023									September 30, 2023
(Dollars in thousands)	Number of Loans		Amortized Cost		Amortized Cost of Modified Loans to Gross Loans by Category			Financial Effect		Number of Loans		Amortized Cost		Amortized Cost of Modified Loans to Gross Loans by Category			Financial Effect
Modification - term extension and forbearance																	Forbearance agreements
Commercial and industrial(1)		1		37,250		6.82	%	See Note (1)			1		32,750		6.14	%
Real estate – mortgage, commercial		2		6,288		0.71	%	Forbearance agreements			2		6,208		0.71	%
Modification - interest-only																	Interest-only payments for six months
Real estate – mortgage, commercial		1		3,051		0.35	%	Interest-only payments for six months			1		244		0.03	%
Modification - term extension and interest-only
Commercial and industrial											1		2,982		0.34	%
Modification - Payment Deferral																	Payment Deferral 3-9 Months
Real estate – mortgage, commercial		1		287		0.03	%	Term extension and interest-only payments for six months			1		2,999		0.34	%
Commercial and industrial											5		5,806		0.66	%
Total		5	$	46,876		1.91	%				11	$	50,989		2.08	%
(1) This $37.3 million loan was modified via a forbearance agreement in the second quarter of 2023 under which the borrower defaulted in this same period. The Company received cash payments of $4.5 million in the six months ended June 30, 2023 for interest. This loan is collateral-dependent, is on nonaccrual status, and has a specific reserve of $8.0 million as of June 30, 2023.
(1) A $32.8 million loan was modified via a forbearance agreement in the second quarter of 2023 under which the borrower defaulted in the same period. The Company received cash payments of $4.5 million in the first half of 2023 for interest. This loan is collateral-dependent, is on nonaccrual status, and has a specific reserve of $9.3 million as of September 30, 2023.									(1) A $32.8 million loan was modified via a forbearance agreement in the second quarter of 2023 under which the borrower defaulted in the same period. The Company received cash payments of $4.5 million in the first half of 2023 for interest. This loan is collateral-dependent, is on nonaccrual status, and has a specific reserve of $9.3 million as of September 30, 2023.

The following table presents an aging analysis of the amortized cost of loans modified in the preceding 12 months as of the date stated.

None of the loans in the table above other than the $~~37.3~~32.75 million commercial and industrial loan on nonaccrual had a payment default during the ~~six~~nine months ended June 30, 2023.

~~Six~~Four residential mortgage loans with a total amortized cost of $~~645~~974 thousand were in the process of foreclosure as of ~~June~~September 30, 2023, ~~compared to~~and none as of December 31, 2022.

Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The following disclosures are presented under this previously applicable GAAP for the applicable prior periods.

The following table presents the aging of the amortized cost of loans held for investment as of the date stated.


	December 31, 2022																		December 31, 2022
(Dollars in thousands)	Current Loans			30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total Past Due & Nonaccrual		PCI Loans		Total Loans				30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total Past Due & Nonaccrual		PCI Loans		Current Loans			Total Loans
Commercial and industrial	$	585,487		$	488	$	279	$	—	$	2,314	$	3,081	$	1,481	$	590,049			$	488	$	279	$	—	$	68,039	$	68,806	$	1,481	$	519,762		$	590,049
Paycheck Protection Program		11,967			—		—		—		—		—		—		11,967				—		—		—		—		—		—		11,967			11,967
Real estate – construction, commercial		181,432			1,136		19		—		714		1,869		—		183,301				1,137		19		—		714		1,870		—		181,431			183,301
Real estate – construction, residential		73,972			1,416		1,204		—		—		2,620		7		76,599				1,416		1,204		—		—		2,620		7		73,972			76,599
Real estate – mortgage, commercial		799,378			6,199		297		6,234		1,658		14,388		51,223		864,989				6,198		297		6,234		1,658		14,387		51,223		799,379			864,989
Real estate – mortgage, residential		614,178			4,544		231		1,998		5,143		11,916		5,678		631,772				4,544		231		1,998		5,143		11,916		5,678		614,178			631,772
Real estate – mortgage, farmland		6,524			—		75		—		—		75		—		6,599				—		75		—		—		75		—		6,524			6,599
Consumer		45,461			880		200		28		495		1,603		359		47,423				880		200		28		495		1,603		359		45,461			47,423
Less: deferred loan fees, net of costs		(1,640	)		—		—		—		—		—		—		(1,640	)			—		—		—		—		—		—		(1,640	)		(1,640	)
Total Loans	$	2,316,759		$	14,663	$	2,305	$	8,260	$	10,324	$	35,552	$	58,748	$	2,411,059			$	14,663	$	2,305	$	8,260	$	76,049	$	101,277	$	58,748	$	2,251,034		$	2,411,059

The following table presents the aging of the amortized cost of PCI loans as of the date stated.


	December 31, 2022								December 31, 2022
(Dollars in thousands)	Current Loans		30-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Total Loans		Current Loans		30-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Total Loans
Commercial and industrial	$	1,481	$	—	$	—	$	1,481	$	—	$	—	$	1,481	$	1,481
Real estate – construction, commercial		7		—		—		7		—		—		7		7
Real estate – mortgage, commercial		51,223		—		—		51,223		—		—		51,223		51,223
Real estate – mortgage, residential		5,324		354		—		5,678		354		—		5,324		5,678
Consumer		359		—		—		359		—		—		359		359
Total PCI Loans	$	58,394	$	354	$	—	$	58,748	$	354	$	—	$	58,394	$	58,748

The following table presents the outstanding principal balance and related recorded investment of acquired loans included in the consolidated balance sheet as of the date stated.


(Dollars in thousands)	December 31, 2022
PCI loans
Outstanding principal balance	$	64,911
Recorded investment		58,748
Purchased performing loans
Outstanding principal balance		513,461
Recorded investment		511,752
Total acquired loans
Outstanding principal balance		578,372
Recorded investment		570,500

The table above excludes PPP loans of $12.0 million as of December 31, 2022. PPP loans are fully guaranteed by the U.S. government; therefore, the Company recorded no allowance for loan losses for these loans.

Impaired loans also include TDRs, and as of December 31, 2022, there were 1112 TDRs totaling $~~1.1~~38.3 million.

The following table presents the amortized cost of loans held for investment by internal loan risk grade as of the date stated.


	December 31, 2022																	December 31, 2022
(Dollars in thousands)	Grade 1 Prime		Grade 2 Desirable		Grade 3 Good		Grade 4 Acceptable		Grade 5 Pass/Watch		Grade 6 Special Mention		Grade 7 Substandard		Total			Grade 1 Prime		Grade 2 Desirable		Grade 3 Good		Grade 4 Acceptable		Grade 5 Pass/Watch		Grade 6 Special Mention		Grade 7 Substandard		Total
PCI loans:
Commercial and industrial	$	—	$	—	$	—	$	1,369	$	—	$	112	$	—	$	1,481		$	—	$	—	$	—	$	1,369	$	—	$	112	$	—	$	1,481
Real estate – construction, commercial		—		—		—		7		—		—		—		7			—		—		—		7		—		—		—		7
Real estate – mortgage, commercial		—		—		—		22,778		26,059		1,700		686		51,223			—		—		—		22,778		26,059		1,700		686		51,223
Real estate – mortgage residential		—		—		—		1,453		1,985		—		2,240		5,678			—		—		—		1,453		1,985		—		2,240		5,678
Consumer		—		—		—		—		353		—		6		359			—		—		—		—		353		—		6		359
Total PCI loans		—		—		—		25,607		28,397		1,812		2,932		58,748			—		—		—		25,607		28,397		1,812		2,932		58,748
Originated and purchased performing loans:
Commercial and industrial		318		885		193,144		312,278		38,552		2,834		40,557		588,568			318		885		192,393		291,204		31,902		2,834		69,032		588,568
Paycheck Protection Program		11,967		—		—		—		—		—		—		11,967			11,967		—		—		—		—		—		—		11,967
Real estate – construction, commercial		—		361		14,223		156,027		8,504		3,365		814		183,294			—		361		14,223		156,027		8,504		3,365		814		183,294
Real estate – construction, residential		—		—		3,110		72,327		1,162		—		—		76,599			—		—		3,110		72,327		1,162		—		—		76,599
Real estate – mortgage, commercial		—		2,330		187,648		561,554		54,352		2,048		5,834		813,766			—		2,330		187,648		561,554		54,352		2,048		5,834		813,766
Real estate – mortgage residential		—		7,311		233,697		365,511		11,858		—		7,717		626,094			—		7,311		233,697		365,511		11,858		—		7,717		626,094
Real estate – mortgage, farmland		549		—		1,315		4,609		126		—		—		6,599			549		—		1,315		4,609		126		—		—		6,599
Consumer		197		—		21,330		24,731		256		—		550		47,064			197		—		21,330		24,731		256		—		550		47,064
Total originated and purchased performing loans		13,031		10,887		654,467		1,497,037		114,810		8,247		55,472		2,353,951			13,031		10,887		653,716		1,475,963		108,160		8,247		83,947		2,353,951
Gross loans	$	13,031	$	10,887	$	654,467	$	1,522,644	$	143,207	$	10,059	$	58,404	$	2,412,699		$	13,031	$	10,887	$	653,716	$	1,501,570	$	136,557	$	10,059	$	86,879	$	2,412,699
Less: deferred loan fees, net of costs																(1,640	)																(1,640	)
Total															$	2,411,059																$	2,411,059

There were no loans classified as doubtful or loss as of December 31, 2022.

Note 6 – Borrowings

FHLB Borrowings

The Bank has a line of credit from the FHLB secured by pledged qualifying real estate loans and securities. At ~~June~~September 30, 2023 and December 31, 2022, based on pledged collateral, the line totaled $~~572.7~~532.7 million and $525.1 million, respectively. The FHLB will lend up to 30% of the Bank’s total assets as of the prior quarter end, subject to certain eligibility requirements, including adequate collateral. The Bank had borrowings from the FHLB totaling $~~219.1~~150.0 million and $311.7 million at ~~June~~September 30, 2023 and December 31, 2022, respectively. FHLB borrowings required the Bank to hold $~~10.9~~9.4 million and $14.7 million of FHLB stock at ~~June~~September 30, 2023 and December 31, 2022, respectively, which is included in restricted equity investments on the consolidated balance sheets. The Bank also has letters of credit issued by the FHLB in the amount of $~~67.6~~100.0 million as of ~~June~~September 30, 2023 for the purpose of collateral for public deposits with the Treasury Board of the Commonwealth of Virginia. Outstanding letters of credit reduce the available balance of the borrowing facility with the FHLB, which was $~~286.0~~282.7 million as of ~~June~~September 30, 2023.

The following table presents information regarding FHLB advances outstanding as of the date stated.

June 30, 2023
(Dollars in thousands)

Balance

Origination Date

Stated Interest Rate

Maturity Date
Fixed Rate Credit

$
50,000

3/15/2023

4.07
%

3/15/2027
Fixed Rate Credit

50,000

5/2/2023

3.87
%

5/3/2027
Fixed Rate Credit

50,000

5/4/2023

3.52
%

5/4/2028
Daily Rate Credit

69,100

5/8/2023

5.32
%

5/8/2024
Total FHLB borrowings

$
219,100


	September 30, 2023
(Dollars in thousands)	Balance		Origination Date	Stated Interest Rate			Maturity Date
Fixed Rate Credit	$	50,000	3/15/2023		4.07	%	3/15/2027
Fixed Rate Credit		50,000	5/2/2023		3.87	%	5/3/2027
Fixed Rate Credit		50,000	5/4/2023		3.52	%	5/4/2028
Total FHLB borrowings	$	150,000

FRB Borrowings

Advances under the BTFP are up to a one-year term and are priced at the one-year overnight index swap rate plus 10 basis points, which is fixed for the term on the advance date. Advances can be repaid at any time without penalty. As of ~~June~~September 30, 2023, the Company had an immediately available line through the BTFP of $~~100.5~~267.0 million, of which the Company had drawn one advance for $65.0 million, maturing May 10, 2024, with a fixed interest rate of 4.74%. As of ~~June~~September 30, 2023, availability through the FRB Discount Window was $~~11.1~~277.6 million. As of ~~June~~September 30, 2023 and December 31, 2022, the Company had no outstanding borrowings through the FRB Discount Window.

Other Borrowings

The Company had unsecured lines of credit with correspondent banks, which totaled $25.0 million and $28.0 million as of ~~both June~~September 30, 2023 and December 31, ~~2022.~~2022, respectively. These lines bear interest at the prevailing rates for such loans and are ~~cancellable~~cancelable any time by the correspondent bank. As of ~~June~~September 30, 2023 and December 31, 2022, none of these lines of credit with correspondent banks were drawn upon.

The Company had $39.9 million of subordinated notes, net, outstanding as of both ~~June~~September 30, 2023 and December 31, 2022. The Company's subordinated notes are comprised of an issuance in October 2019 maturing

October 15, 2029 (the “2029 Notes”) and an issuance in May 2020 maturing June 1, 2030 (the “2030 Note”). As of ~~June~~September 30, 2023, the net carrying amount of the 2029 Notes was $25.1 million, inclusive of a $~~629~~603 thousand purchase accounting adjustment (premium). For the three months ended ~~June~~September 30, 2023 and 2022, the effective interest rate on the 2029 Notes was ~~4.99% and~~ ~~4.94~~5.3%, ~~respectively,~~ inclusive of the amortization of the purchase accounting adjustment (premium). For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, the effective interest rate on the 2029 Notes was ~~5.04% and~~ ~~5.01~~5.1%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium). As of ~~June~~September 30, 2023, the net carrying amount of the 2030 Note, including capitalized, unamortized debt issuance costs, was $14.8 million. For the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, the effective interest rate on the 2030 Note was 6.10%.

Note 7 – Derivative Financial Instruments and Hedging Activities

The Company enters into interest rate swap agreements to accommodate the needs of its banking customers. The Company mitigates the interest rate risk entering into these swap agreements by entering into equal and offsetting swap agreements with highly-rated third-party financial institutions. These back-to-back swap agreements are free-standing derivatives and are recorded at fair value in the consolidated balance sheets (asset positions are included in other assets and liability positions are included in other liabilities).

The following tables present the notional and fair value of interest rate swap agreements as of the dates stated.


	June 30, 2023					September 30, 2023
(Dollars in thousands)	Notional Amount		Fair Value			Notional Amount		Fair Value
Interest rate swap agreement
Receive fixed/pay variable swaps	$	1,974	$	(95	)	$	2,178	$	(143	)
Pay fixed/receive variable swaps		1,974		95			2,178		143

	December 31, 2022					December 31, 2022
(Dollars in thousands)	Notional Amount		Fair Value			Notional Amount		Fair Value
Interest rate swap agreement
Receive fixed/pay variable swaps	$	2,178	$	(95	)	$	2,178	$	(95	)
Pay fixed/receive variable swaps		2,178		95			2,178		95

As part of its efforts to sell originated government guaranteed and conventional residential mortgages into the secondary market, the Bank had entered into $~~9.0~~7.0 million and $11.7 million of rate lock commitments with borrowers, net of expected fallout, as of ~~June~~September 30, 2023 and December 31, 2022, respectively. Additionally, $~~10.2~~7.7 million and $12.8 million of closed loan inventory waiting for sale were hedged by $~~16.0~~10.3 million and $21.5 million in forward to-be-announced mortgage-backed securities as of ~~June~~September 30, 2023 and December 31, 2022, respectively. Mortgage derivative assets totaled $~~305~~449 thousand and $112 thousand as of ~~June~~September 30, 2023 and December 31, 2022, respectively, and

mortgage derivative liabilities were $0 ~~thousand~~ and $24 thousand as of ~~June~~September 30, 2023 and December 31, 2022, respectively. Mortgage derivative assets and liabilities are included in other assets and other liabilities, respectively, in the consolidated balance sheets.

Note 8 – Stock-Based Compensation

The Company grants time-based restricted stock awards (“time-based RSAs”) to employees and directors under the Blue Ridge Bankshares, Inc. 2023 Stock Incentive Plan, which was approved by shareholders at the Company’s 2023 annual meeting of shareholders on June 14, 2023 and replaced the Company’s prior stock-based compensation plan, the Blue Ridge Bankshares, Inc. Equity Incentive Plan, effective such date.Plan. Time-based RSAs are considered fixed awards as the number of shares and fair value are both known at the date of grant, and the fair value of the award at the grant date is amortized over the requisite service period, which is generally three years. Beginning in 2022, the Company began granting performance-based restricted stock awards (“PSAs”) to employees, in addition to time-based RSAs. PSAs vest at the end of a three-year period contingent on the Company's achievement of financial goals and are being expensed on a straight-line basis over the same period with adjustments periodically based on projected achievement of the performance target, which may change the number of PSA shares that will ultimately vest. Time-based RSAs carry voting and dividend rights, while PSAs carry voting rights and are subject to deferred dividend payout restrictions.

Compensation expense recognized in the consolidated statements of operations related to time-based RSAs and PSAs, net of forfeitures, was $~~457~~554 thousand and $~~936~~1.5 ~~thousand~~million for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, and was $~~374~~415 thousand and $~~729~~1.1 ~~thousand~~million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2023, no grants of289,981 time-based RSAs or PSAs were made, while forfeitures relating to ~~26,841~~46,846 shares of the Company's common stock resulted due to employee terminations. As of ~~June~~September 30, 2023, time-based RSAs and PSAs relating to ~~281,523~~438,974 shares of the Company's common stock were outstanding, and unrecognized compensation expense related to these awards totaled $~~1.7~~3.2 million.

During the first ~~six~~nine months of 2023, stock options relating to 3,750 shares were exercised and stock options relating to ~~1,875~~15,058 shares expired, resulting in stock options relating to ~~47,049~~33,866 shares remaining outstanding as of ~~June~~September 30, 2023. These options were assumed by the Company in connection with the Bay Banks Merger and expire between March 2024 and December 2029.

Note 9 – Leases

The Company’s long-term lease agreements are classified as operating leases and consist primarily of real estate for retail branches and office space. Certain of these leases offer the option to extend the lease term and such extensions are included in the calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases as of the dates and for the periods stated.


	For the three months ended				For the six months ended				For the three months ended				For the nine months ended
(Dollars in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022		September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Operating lease cost	$	526	$	654	$	1,241	$	1,210	$	672	$	644	$	1,913	$	1,854
Total lease cost		526		654		1,241		1,210		672		644		1,913		1,854
Cash paid for amounts included in the measurement of lease liabilities		546		341		1,145		1,077		628		274		1,773		1,351

(Dollars in thousands)

June 30, 2023

December 31, 2022

Right-of-use assets

$
5,744

$
6,903

Lease liabilities

$
6,765

$
7,860

Weighted average remaining lease term (years)

5.76

5.85

Weighted average discount rate

2.41
%

2.40
%


(Dollars in thousands)	September 30, 2023			December 31, 2022
Right-of-use assets	$	9,100		$	6,903
Lease liabilities	$	10,015		$	7,860
Weighted average remaining lease term (years)		7.25			5.85
Weighted average discount rate		3.24	%		2.40	%

The following table presents a maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities as of the date stated.


(Dollars in thousands)	June 30, 2023			September 30, 2023
Six months ending December 31, 2023	$	889
Three months ending December 31, 2023				$	513
Twelve months ending December 31, 2024		1,445			1,915
Twelve months ending December 31, 2025		1,116			1,598
Twelve months ending December 31, 2026		1,049			1,503
Twelve months ending December 31, 2027		963			1,366
Thereafter		1,771			4,468
Total undiscounted cash flows		7,233			11,363
Discount		(468	)		(1,348	)
Lease liabilities	$	6,765		$	10,015

Note 10 – Fair Value

The fair value of a financial instrument is the current amount that would be exchanged between willing parties in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances,

there are no quoted market prices for the various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.

Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The Company records fair value adjustments to certain assets and liabilities and determines fair value disclosures utilizing a definition of fair value of assets and liabilities that states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Additional considerations are involved to determine the fair value of financial assets in markets that are not active.

The Company uses a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy based on these two types of inputs are as follows:


Level 1 –		Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2 –		Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market.
Level 3 –		Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.

Securities

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly-liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions, and certain corporate, asset-backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. The carrying value of restricted FRB

and FHLB stock approximates fair value based upon the redemption provisions of each entity and is therefore excluded from the following table.

Rabbi trust assets

The Company's rabbi trust is associated with a deferred compensation plan. The assets held by the rabbi trust are invested at the direction of the individual participants and are generally invested in marketable investment securities, such as common stocks and mutual funds or short-term investments (e.g., cash) (Level 1). Rabbi trust assets and the associated deferred compensation plan liability are included in other assets and other liabilities, respectively, in the consolidated balance sheets.

Derivative financial instruments

Derivative instruments used to hedge residential mortgage loans held for sale and the related interest rate lock commitments include forward commitments to sell mortgage loans and are reported at fair value utilizing Level 2 inputs. The fair values of derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for rate lock commitments.

The Company has interest rate swap assets and liabilities associated with certain customer commercial loans. The interest rate swap asset with the customer is offset with an equal swap agreement with a ~~highly rated~~highly-rated third-party

financial institution (i.e., “back-to-back”). Both the interest rate swap assets and liabilities are free-standing derivatives and are recorded at fair value utilizing Level 2 inputs.

The following tables present the balances of financial assets measured at fair value on a recurring basis as of the dates stated.


	June 30, 2023								September 30, 2023
(Dollars in thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Securities available for sale
State and municipals	$	50,909	$	—	$	50,909	$	—	$	41,277	$	—	$	41,277	$	—
U.S. Treasury and agencies		60,702		—		60,702		—		59,412		—		59,412		—
Mortgage backed securities		192,042		—		184,598		7,444		180,733		—		173,372		7,361
Corporate bonds		36,964		—		28,665		8,299		32,508		—		28,709		3,799
Total securities available for sale	$	340,617	$	—	$	324,874	$	15,743	$	313,930	$	—	$	302,770	$	11,160
Other assets
MSR assets	$	28,246	$	—	$	—	$	28,246	$	29,139	$	—	$	—	$	29,139
Rabbi trust assets		584		584		—		—		515		515		—		—
Mortgage derivative asset		305		—		305		—		449		—		449		—
Interest rate swap asset		95		—		95		—		142		—		142		—
Other liabilities
Interest rate swap liability	$	95	$	—	$	95	$	—	$	142	$	—	$	142	$	—


	December 31, 2022
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Securities available for sale
State and municipals	$	50,993	$	—	$	50,993	$	—
U.S. Treasury and agencies		67,162		—		67,162		—
Mortgage backed securities		196,336		—		188,719		7,617
Corporate bonds		39,850		—		35,561		4,289
Total securities available for sale	$	354,341	$	—	$	342,435	$	11,906
Other assets
MSR assets	$	28,991	$	—	$	—	$	28,991
Rabbi trust assets		584		584		—		—
Mortgage derivative asset		112		—		112		—
Interest rate swap asset		95		—		95		—
Other liabilities
Mortgage derivative liability	$	24	$	—	$	24	$	—
Interest rate swap liability		95		—		95		—

The following table presents the change in corporate bonds and mortgage backed securities using Level 3 inputs for the periods stated.


(Dollars in thousands)	Corporate Bonds		Mortgage Backed Securities			Corporate Bonds			Mortgage Backed Securities
Balance as of December 31, 2022	$	4,289	$	7,617		$	4,289		$	7,617
Transfers from Level 2 to Level 3		4,000		—
Transfers from Level 3 to Level 2							(500	)		—
Fair value adjustments		10		(173	)		10			(256	)
Balance as of June 30, 2023	$	8,299	$	7,444
Balance as of September 30, 2023						$	3,799		$	7,361

As of ~~June~~September 30, 2023, 1110 corporate bonds totaling $~~8.3~~3.8 million and six mortgage backed securities totaling $7.4 million were reported at their respective amortized cost and as Level 3 assets in the fair value hierarchy, as there were no observable market prices for similar investments. ~~The $4.0~~ ~~million transfer from Level 2 to Level 3 inputs for corporate bonds in the first six months of 2023 was attributable to one security for which a fair value could not be obtained as of June 30, 2023.~~

Mortgage Servicing Rights

A third-party model is used to determine the fair value of the Company’s MSR assets. The model establishes pools of performing loans, calculates projected future cash flows for each pool, and applies a discount rate to each pool. As of ~~June~~

September 30, 2023 and December 31, 2022, the Company was servicing approximately $~~2.15~~2.13 billion and $2.16 billion of loans, respectively. Loans are segregated into ~~homogenous~~homogeneous pools based on loan term, interest rates, and other similar characteristics. Cash flows are then estimated based on net servicing fee income and utilizing assumed servicing costs and prepayment speeds. The weighted average net servicing fee income of the portfolio was 28.3 basis points as of ~~June~~September 30, 2023. Estimated base annual servicing costs were $75.00 to $85.00 per loan depending on the guarantor. Prepayment speeds in the model are based on empirically derived data for mortgage pool factors and differences between a mortgage pool’s weighted average coupon and its current mortgage rate. The weighted average prepayment speed assumption used in the fair value model was ~~8.06~~7.87% as of ~~June~~September 30, 2023. A base discount rate of 9.50% to 11.50% (9.92% weighted average discount rate) was then applied to each pool’s projected future cash flows as of ~~June~~September 30, 2023. The discount rate is intended to represent the estimated market yield for the highest quality grade of comparable servicing. MSR assets are classified as Level 3.

The following table presents the change in MSR assets as of the dates and for the periods stated.


(Dollars in thousands)	MSR Assets			MSR Assets
Balance as of December 31, 2022	$	28,991		$	28,991
Additions		619			874
Fair value adjustments		(1,364	)		(726	)
Balance as of June 30, 2023	$	28,246
Balance as of September 30, 2023				$	29,139

Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements.

Other Equity Investments

The fair value of other equity investments, including the Company's investments in certain fintech companies, is based on either observable market prices, if available, or observable market transactions for identical or significantly similar investments (Level 2).

Collateral-dependent Loans

Collateral-dependent loans with specific reserves are carried at fair value, which equals the estimated market value of the collateral less estimated costs to sell. Collateral may be in the form of real estate, securities, or business assets, including equipment, inventory, and accounts receivable. A loan may have multiple types of collateral; however, the majority of the Company’s loan collateral is real estate. The value of real estate collateral is generally determined

utilizing a market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral value is significantly adjusted due to differences in the comparable properties or is discounted by the Company because of lack of marketability, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant or the net book value on the applicable borrower’s financial statements if not considered significant. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Fair value adjustments are recorded in the period incurred as provision for credit losses on the consolidated statements of operations.

Loans Held for Sale

Mortgage loans originated or purchased and intended for sale in the secondary market (i.e., loans held for sale) are carried at estimated market value in the aggregate. Changes in fair value are recognized in residential mortgage banking income, including MSRs, on the consolidated statements of operations (Level 2).

Certain consumer loans originated by the Bank and sourced by fintech partners are classified on the consolidated balance sheets as held for sale. After origination, these loans are sold directly to the applicable fintech partner or another investor at par, generally up to 10 days from origination. Due to the relatively short time between origination and sale, these loans are held at cost, which approximates fair value (Level 2).

Government guaranteed loans, or portions thereof, intended for sale in the secondary market are classified as held for sale on the consolidated balance sheets and carried at the lower of cost or estimated fair market value (Level 2).

Other Real Estate Owned (“OREO”)

Certain assets such as OREO are measured at fair value less estimated costs to sell. Valuation of OREO is generally determined using current appraisals from independent appraisers (Level 2). If current appraisals cannot be obtained prior to reporting dates, or if declines in value are identified after a recent appraisal is received, appraisal values are discounted, resulting in Level 3 estimates. If the Company markets the property with a real estate agent or broker, estimated selling costs reduce the listing price, resulting in a valuation based on Level 3 inputs.

The following tables summarize assets that were measured at fair value on a nonrecurring basis as of the dates stated.


	June 30, 2023								September 30, 2023
(Dollars in thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Other equity investments	$	22,693	$	—	$	22,693	$	—	$	22,061	$	—	$	22,061	$	—
Collateral-dependent loans		78,311		—		—		78,311		68,612		—		—		68,612
Loans held for sale		64,102		—		64,102		—		69,640		—		69,640		—


	December 31, 2022								December 31, 2022
(Dollars in thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Other equity investments	$	23,776	$	—	$	23,776	$	—	$	23,776	$	—	$	23,776	$	—
Impaired loans - Pre-ASC 326		34,888		—		—		34,888		54,906		—		—		54,906
Loans held for sale		69,534		—		69,534		—		69,534		—		69,534		—
OREO		195		—		—		195		195		—		—		195

The following tables present quantitative information about Level 3 fair value measurements as of the dates stated.

(Dollars in thousands)

Balance as of June 30, 2023

Unobservable Input

Range

Collateral-dependent loans

Discounted appraised value technique

78,311

Selling Costs

7
%


(Dollars in thousands)	Balance as of September 30, 2023		Unobservable Input	Range
Collateral-dependent loans
Discounted appraised value technique		68,612	Selling Costs	7% - 10%


(Dollars in thousands)	Balance as of December 31, 2022		Unobservable Input	Range			Balance as of December 31, 2022		Unobservable Input	Range
Impaired loans - Pre-ASC 326
Discounted appraised value technique		34,743	Selling Costs	7% - 10%				54,761	Selling Costs	7% - 10%
Discounted cash flows technique		145	Discount Rate	4% - 11%				145	Discount Rate	4% - 11%
OREO
Discounted appraised value technique		195	Selling Costs		7	%		195	Selling Costs		7	%

Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity that contractual right or obligation to either receive or deliver cash for another financial instrument. The information used to determine fair value is highly subjective and judgmental in nature and, therefore, the results may not be precise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different.

The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated.


	June 30, 2023										September 30, 2023
					Fair Value Measurements										Fair Value Measurements
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	131,843	$	131,843	$	131,843	$	—	$	—	$	238,573	$	238,573	$	238,573	$	—	$	—
Federal funds sold		2,492		2,492		2,492		—		—		2,584		2,584		2,584		—		—
Securities available for sale		340,617		340,617		—		324,874		15,743		313,930		313,930		—		302,770		11,160
Restricted equity investments		17,538		17,538		—		17,538		—		16,006		16,006		—		16,006		—
Other equity investments		22,693		22,693		—		22,693		—		22,061		22,061		—		22,061		—
Other investments		27,157		27,157		—		—		27,157		28,453		28,453		—		—		28,453
PPP loans receivable, net		7,234		7,234		—		—		7,234		6,414		6,414		—		—		6,414
Loans held for investment, net		2,408,630		2,329,532		—		—		2,329,532		2,390,325		2,303,005		—		—		2,303,005
Accrued interest receivable		15,474		15,474		—		15,474		—		16,387		16,387		—		16,387		—
Bank owned life insurance		47,828		47,828		—		47,828		—		48,136		48,136		—		48,136		—
MSR assets		28,246		28,246		—		—		28,246		29,139		29,139		—		—		29,139
Financial Liabilities														—						—
Noninterest-bearing demand deposits	$	575,989	$	575,989	$	575,989	$	—	$	—	$	572,969	$	572,969	$	572,969	$	—	$	—
Interest-bearing demand and money market deposits		1,293,754		1,293,754		—		1,293,754		—		1,350,601		1,350,601		—		1,350,601		—
Savings deposits		131,332		131,332		—		131,332				124,321		124,321		—		124,321		—
Time deposits		612,019		608,923		—		—		608,923		728,260		721,265		—		—		721,265
FHLB borrowings		219,100		223,296		—		223,296		—		150,000		156,282		—		156,282		—
FRB borrowings		65,000		65,000		—		65,000		—		65,000		65,000		—		65,000		—
Subordinated notes, net		39,888		37,094		—		—		37,094		39,871		37,335		—		—		37,335


	December 31, 2022										December 31, 2022
					Fair Value Measurements										Fair Value Measurements
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	77,274	$	77,274	$	77,274	$	—	$	—	$	77,274	$	77,274	$	77,274	$	—	$	—
Federal funds sold		1,426		1,426		1,426		—		—		1,426		1,426		1,426		—		—
Securities available for sale		354,341		354,341		—		342,435		11,906		354,341		354,341		—		342,435		11,906
Restricted equity investments		21,257		21,257		—		21,257		—		21,257		21,257		—		21,257		—
Other equity investments		23,776		23,776		—		23,776		—		23,776		23,776		—		23,776		—
Other investments		24,672		24,672		—		—		24,672		24,672		24,672		—		—		24,672
PPP loans receivable, net		11,967		11,967		—		—		11,967		11,967		11,967		—		—		11,967
Loans held for investment, net		2,376,153		2,321,042		—		—		2,321,042		2,368,352		2,321,042		—		—		2,321,042
Accrued interest receivable		12,393		12,393		—		12,393		—		11,569		11,569		—		11,569		—
Bank owned life insurance		47,245		47,245		—		47,245		—		47,245		47,245		—		47,245		—
MSR assets		28,991		28,991		—		—		28,991		28,991		28,991		—		—		28,991
Financial Liabilities
Noninterest-bearing demand deposits	$	640,101	$	640,101	$	640,101	$	—	$	—	$	640,101	$	640,101	$	640,101	$	—	$	—
Interest-bearing demand and money market deposits		1,318,799		1,318,799		—		1,318,799		—		1,318,799		1,318,799		—		1,318,799		—
Savings deposits		151,646		151,646		—		151,646		—		151,646		151,646		—		151,646		—
Time deposits		391,961		352,294		—		—		352,294		391,961		352,294		—		—		352,294
FHLB borrowings		311,700		311,700		—		311,700		—		311,700		311,700		—		311,700		—
FRB borrowings		51		51		—		51		—		51		51		—		51		—
Subordinated notes, net		39,920		37,689		—		—		37,689		39,920		37,689		—		—		37,689

Note 11 – Minimum Regulatory Capital Requirements

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

Pursuant to the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks (the “Basel III rules”), the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios of 2.50% for all ratios, except the tier 1 leverage ratio. If a banking organization dips into its capital

conservation buffer, it is subject to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized; although, these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. As of ~~June~~September 30, 2023 and December 31, 2022, the Bank met the capital requirements to be classified as well capitalized.

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. The three-year phase-in of the CECL Transitional Amount to regulatory capital will be 25%, 50%, and 25% in 2023, 2024, and 2025, respectively. The Bank made this irrevocable election effective with its first quarter 2023 call report.

The following tables present the capital and capital ratios to which the Bank is subject and the amounts and ratios to be adequately and well capitalized as of the dates stated. Adequately capitalized ratios include the conversation buffer, if applicable. The CECL Transitional Amount was $~~5.5~~8.1 million, of which $~~1.4~~2.0 million reduced the regulatory capital amounts and capital ratios as of ~~June~~September 30, 2023.


	September 30, 2023
	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.	$	284,407		10.44	%	$	286,055		10.50	%	$	272,434		10.00	%
Tier 1 capital
(To risk-weighted assets)
Blue Ridge Bank, N.A.	$	250,210		9.18	%	$	231,567		8.50	%	$	217,946		8.00	%
Common equity tier 1 capital
(To risk-weighted assets)
Blue Ridge Bank, N.A.	$	250,210		9.18	%	$	190,703		7.00	%	$	177,081		6.50	%
Tier 1 leverage
(To average assets)
Blue Ridge Bank, N.A.	$	250,210		7.63	%	$	131,175		4.00	%	$	163,969		5.00	%


	December 31, 2022
	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.	$	301,097		10.93	%	$	289,246		10.50	%	$	275,473		10.00	%
Tier 1 capital
(To risk-weighted assets)
Blue Ridge Bank, N.A.	$	268,545		9.75	%	$	234,152		8.50	%	$	220,379		8.00	%
Common equity tier 1 capital
(To risk-weighted assets)
Blue Ridge Bank, N.A.	$	268,545		9.75	%	$	192,831		7.00	%	$	179,058		6.50	%
Tier 1 leverage
(To average assets)
Blue Ridge Bank, N.A.	$	268,545		8.90	%	$	120,644		4.00	%	$	150,805		5.00	%

In addition to the foregoing capital requirements, the OCC has notified the Bank of its decision to establish individual minimum capital ratios (“IMCR”) for the Bank that are higher than those required for capital adequacy purposes generally. Specifically, the Bank is required to maintain a leverage ratio of 10.00% and a total capital ratio of 13.00%. As of September 30, 2023, the Bank did not meet these IMCR requirements,which could subject the Bank to additional regulatory requirements or directives, including developing and maintaining capital plans, asset sales, limitations on growth, further regulatory sanctions and/or other regulatory enforcement actions.

Note 12 – Commitments and Contingencies

In the ordinary course of operations, the Company offers various financial products to its customers to meet their credit and liquidity needs. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and stand-by letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional commitments as it does for on-balance sheet commitments.

Subject to its normal credit standards and risk monitoring procedures, the Company makes contractual commitments to extend credit. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. As of ~~June~~September 30, 2023 and December 31, 2022, the Company had outstanding loan commitments of $~~679.1~~590.1 million and $736.1 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 ~~June~~September 30, 2023 and December 31, 2022, commitments under outstanding financial stand-by letters of credit totaled $~~29.5~~23.3 million and $29.8 million, respectively. The credit risk of issuing financial stand-by letters of credit can be greater than the risk involved in extending loans to customers.

Upon the adoption of ASC 326 on January 1, 2023, the Company recorded an increase in its reserve for unfunded commitments of $3.7 million. Most of this increase was attributable to higher funding assumptions of the underlying credit commitments, based on industry data available. For the three and ~~six~~nine months ended ~~June~~September 30, 2023, the Company recorded a reduction in the provision for credit losses for unfunded commitments of $~~600~~550 thousand and $~~1.0~~1.6 million,

respectively, which was primarily attributable to lower balances of loan commitments. As of ~~June~~September 30, 2023, the reserve for unfunded commitments was $~~4.5~~4.0 million compared to $1.8 million as of December 31, 2022.

The Company invests in various partnerships, limited liability companies, and SBIC funds. Pursuant to these investments, the Company commits to an investment amount to be fulfilled in future periods. At ~~June~~September 30, 2023, the Company had future commitments outstanding totaling $~~17.9~~16.6 million related to these investments.

Note 14 – Business Segments

The Company has three reportable business segments: commercial banking, mortgage banking, and holding company activities. The commercial banking business segment makes loans to and generates deposits from individuals and businesses, while offering a wide array of general banking activities to its customers. It is distinct from the Company's mortgage banking division, which concentrates on individual mortgage lending and sales activities. Activities at the holding company (or parent level) are primarily associated with investments, borrowings, and certain noninterest expenses.

The following tables present statement of operations items and assets by segment as of the dates and for the periods stated.

As of and for the three months ended June 30, 2023

(Dollars in thousands)

Commercial Banking

Mortgage Banking

Parent Only

Eliminations

Blue Ridge
Bankshares,
Inc.
Consolidated

NET INTEREST INCOME

Interest income

$
38,553

$
415

$
5

$
—

$
38,973

Interest expense

17,853

170

547

—

18,570

   Net interest income

20,700

245

(542
)

—

20,403

Provision for credit losses

20,500

—

—

—

20,500

   Net interest income after provision for credit losses

200

245

(542
)

—

(97
)
NONINTEREST INCOME

Residential mortgage banking income, including MSRs

712

3,583

—

—

4,295

Gain on sale of guaranteed government loans

2,384

—

—

—

2,384

Service charges on deposit accounts

349

—

—

—

349

Increase in cash surrender value of bank owned life insurance

292

—

—

—

292

Other income

2,797

—

(282
)

(99
)

2,416

   Total noninterest income

6,534

3,583

(282
)

(99
)

9,736

NONINTEREST EXPENSE

Salaries and employee benefits

12,233

2,285

—

—

14,518

Other operating expenses

15,917

1,392

2,324

(99
)

19,534

   Total noninterest expense

28,150

3,677

2,324

(99
)

34,052

(Loss) income from continuing operations before income tax expense

(21,416
)

151

(3,148
)

—

(24,413
)
Income tax (benefit) expense

(4,322
)

34

(661
)

—

(4,949
)
Net (loss) income

$
(17,094
)

$
117

$
(2,487
)

$
—

$
(19,464
)
Total assets as of June 30, 2023

$
3,141,817

$
41,124

$
273,280

$
(241,797
)

$
3,214,424


	As of and for the three months ended June 30, 2022													As of and for the three months ended September 30, 2023
(Dollars in thousands)	Commercial Banking			Mortgage Banking		Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated		Commercial Banking			Mortgage Banking			Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated
NET INTEREST INCOME
Interest income	$	25,725		$	337	$	181		$	—		$	26,243	$	41,699		$	777		$	9		$	—		$	42,485
Interest expense		1,402			93		658			—			2,153		18,766			408			1,119			—			20,293
Net interest income		24,323			244		(477	)		—			24,090		22,933			369			(1,110	)		—			22,192
Provision for credit losses		7,494			—		—			—			7,494		11,050			—			—			—			11,050
Net interest income after provision for credit losses		16,829			244		(477	)		—			16,596		11,883			369			(1,110	)		—			11,142
NONINTEREST INCOME
Residential mortgage banking income, including MSRs		(25	)		5,985		—			—			5,960		(1,095	)		4,906			—			—			3,811
Gain on sale of guaranteed government loans		1,538					—			—			1,538		6			—			—			—			6
Service charges on deposit accounts		327			—		—			—			327		365			—			—			—			365
Increase in cash surrender value of bank owned life insurance		276			—		—			—			276		311			—			—			—			311
Other income		2,457			—		(173	)		(195	)		2,089		2,896			—			125			(99	)		2,922
Total noninterest income		4,573			5,985		(173	)		(195	)		10,190		2,483			4,906			125			(99	)		7,415
NONINTEREST EXPENSE
Salaries and employee benefits		10,916			4,957		—			—			15,873		10,136			4,504			—			—			14,640
Other operating expenses		8,506			761		381			(195	)		9,453		39,655			2,834			7,591			(99	)		49,981
Total noninterest expense		19,422			5,718		381			(195	)		25,326		49,791			7,338			7,591			(99	)		64,621
Income (loss) from continuing operations before income tax expense		1,980			511		(1,031	)		—			1,460
Income tax expense (benefit)		389			108		(155	)		—			342
Net income (loss) from continuing operations	$	1,591		$	403	$	(876	)	$	—		$	1,118
Total assets as of June 30, 2022	$	2,712,209		$	55,335	$	316,891		$	(284,792	)	$	2,799,643
Loss from continuing operations before income tax expense															(35,425	)		(2,063	)		(8,576	)		—			(46,064	)
Income tax benefit															(2,446	)		(446	)		(1,801	)		—			(4,693	)
Net loss														$	(32,979	)	$	(1,617	)	$	(6,775	)	$	—		$	(41,371	)
Total assets as of September 30, 2023														$	3,183,121		$	46,959		$	230,999		$	(198,366	)	$	3,262,713


	As of and for the six months ended June 30, 2023															As of and for the three months ended September 30, 2022
(Dollars in thousands)	Commercial Banking			Mortgage Banking			Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated			Commercial Banking		Mortgage Banking			Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated
NET INTEREST INCOME
Interest income	$	81,295		$	720		$	11		$	—		$	82,026		$	32,752	$	217		$	177		$	—		$	33,146
Interest expense		32,855			309			1,100			—			34,264			3,612		126			731			—			4,469
Net interest income		48,440			411			(1,089	)		—			47,762			29,140		91			(554	)		—			28,677
Provision for credit losses		24,200			—			—			—			24,200			3,900		—			—			—			3,900
Net interest income after provision for credit losses		24,240			411			(1,089	)		—			23,562			25,240		91			(554	)		—			24,777
NONINTEREST INCOME
Residential mortgage banking income, including MSRs		642			4,956			—			—			5,598			27		3,140			—			—			3,167
Gain on sale of guaranteed government loans		4,793			—			—			—			4,793			1,565		—			—			—			1,565
Service charges on deposit accounts		692			—			—			—			692			354		—			—			—			354
Increase in cash surrender value of bank owned life insurance		574			—			—			—			574			398		—			—			—			398
Other income		5,885			—			(325	)		(198	)		5,362			2,844		—			(169	)		(191	)		2,484
Total noninterest income		12,586			4,956			(325	)		(198	)		17,019			5,188		3,140			(169	)		(191	)		7,968
NONINTEREST EXPENSE
Salaries and employee benefits		24,861			4,946			—			—			29,807			10,647		3,527			—			—			14,174
Other operating expenses		27,127			2,877			3,286			(198	)		33,092			13,861		1,002			362			(191	)		15,034
Total noninterest expense		51,988			7,823			3,286			(198	)		62,899			24,508		4,529			362			(191	)		29,208
Loss from continuing operations before income tax expense		(15,162	)		(2,456	)		(4,700	)		—			(22,318	)
Income tax benefit		(2,922	)		(549	)		(987	)		—			(4,458	)
Net loss	$	(12,240	)	$	(1,907	)	$	(3,713	)	$	—		$	(17,860	)
Total assets as of June 30, 2023	$	3,141,817		$	41,124		$	273,280		$	(241,797	)	$	3,214,424
Income (loss) from continuing operations before income tax expense																	5,920		(1,298	)		(1,085	)		—			3,537
Income tax expense (benefit)																	1,267		(246	)		(220	)		—			801
Net income (loss) from continuing operations																$	4,653	$	(1,052	)	$	(865	)	$	—		$	2,736
Total assets as of September 30, 2022																$	2,796,033	$	50,354		$	305,029		$	(271,844	)	$	2,879,572


	As of and for the six months ended June 30, 2022														As of and for the nine months ended September 30, 2023
(Dollars in thousands)	Commercial Banking			Mortgage Banking		Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated			Commercial Banking			Mortgage Banking			Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated
NET INTEREST INCOME
Interest income	$	50,908		$	928	$	209		$	—		$	52,045		$	124,629		$	1,192		$	14		$	—		$	125,835
Interest expense		2,948			128		1,211			—			4,287			52,313			578			1,666			—			54,557
Net interest income		47,960			800		(1,002	)		—			47,758			72,316			614			(1,652	)		—			71,278
Provision for credit losses		9,994			—		—			—			9,994			19,553			—			—			—			19,553
Net interest income after provision for credit losses		37,966			800		(1,002	)		—			37,764			52,763			614			(1,652	)		—			51,725
NONINTEREST INCOME
Residential mortgage banking income, including MSRs		176			15,343		—			—			15,519			850			8,559			—			—			9,409
Gain on sale of guaranteed government loans		2,965			—		—			—			2,965			4,799			—			—			—			4,799
Service charges on deposit accounts		642			—		—			—			642			1,057			—			—			—			1,057
Increase in cash surrender value of bank owned life insurance		548			—		—			—			548			885			—			—			—			885
Other income		5,634			—		9,253			(277	)		14,610			8,639			—			(157	)		(198	)		8,284
Total noninterest income		9,965			15,343		9,253			(277	)		34,284			16,230			8,559			(157	)		(198	)		24,434
NONINTEREST EXPENSE
Salaries and employee benefits		20,005			9,964		—						29,969			37,658			6,789			—			—			44,447
Other operating expenses		15,087			2,697		539			(277	)		18,046			69,130			4,226			9,915			(198	)		83,073
Total noninterest expense		35,092			12,661		539			(277	)		48,015			106,788			11,015			9,915			(198	)		127,520
Income from continuing operations before income tax expense		12,839			3,482		7,712			—			24,033
Income tax expense		3,295			732		1,468			—			5,495
Net income from continuing operations	$	9,544		$	2,750	$	6,244		$	—		$	18,538
Discontinued Operations
Income from discontinued operations before income taxes		426			—		—			—			426
Income tax expense		89			—		—			—			89
Net income from discontinued operations		337			—		—			—			337
Net income	$	9,881		$	2,750	$	6,244		$	—		$	18,875
Net income from discontinued operations attributable to noncontrolling interest		(1	)		—		—			—			(1	)
Net income attributable to Blue Ridge Bankshares, Inc.	$	9,880		$	2,750	$	6,244		$	—		$	18,874
Total assets as of June 30, 2022	$	2,712,209		$	55,335	$	316,891		$	(284,792	)	$	2,799,643
Loss from continuing operations before income tax expense																(37,795	)		(1,842	)		(11,724	)		—			(51,361	)
Income tax benefit																(2,473	)		(412	)		(2,462	)		—			(5,347	)
Net loss															$	(35,322	)	$	(1,430	)	$	(9,262	)	$	—		$	(46,014	)
Total assets as of September 30, 2023															$	3,183,121		$	46,959		$	230,999		$	(198,366	)	$	3,262,713


	As of and for the nine months ended September 30, 2022
(Dollars in thousands)	Commercial Banking			Mortgage Banking		Parent Only			Eliminations			Blue Ridge Bankshares, Inc. Consolidated
NET INTEREST INCOME
Interest income	$	83,660		$	1,145	$	386		$	—		$	85,191
Interest expense		6,560			254		1,942			—			8,756
Net interest income		77,100			891		(1,556	)		—			76,435
Provision for credit losses		13,894			—		—			—			13,894
Net interest income after provision for credit losses		63,206			891		(1,556	)		—			62,541
NONINTEREST INCOME
Residential mortgage banking income, including MSRs		203			18,483		—			—			18,686
Gain on sale of guaranteed government loans		4,530			—		—			—			4,530
Service charges on deposit accounts		996			—		—			—			996
Increase in cash surrender value of bank owned life insurance		946			—		—			—			946
Other income		8,478			—		9,084			(468	)		17,094
Total noninterest income		15,153			18,483		9,084			(468	)		42,252
NONINTEREST EXPENSE
Salaries and employee benefits		30,652			13,491		—			—			44,143
Other operating expenses		28,949			3,699		901			(468	)		33,081
Total noninterest expense		59,601			17,190		901			(468	)		77,224
Income from continuing operations before income tax expense		18,758			2,184		6,627			—			27,569
Income tax expense		4,562			486		1,248			—			6,296
Net income from continuing operations	$	14,196		$	1,698	$	5,379		$	—		$	21,273
Discontinued Operations
Income from discontinued operations before income taxes		426			—		—			—			426
Income tax expense		89			—		—			—			89
Net income from discontinued operations		337			—		—			—			337
Net income	$	14,533		$	1,698	$	5,379		$	—		$	21,610
Net income from discontinued operations attributable to noncontrolling interest		(1	)		—		—			—			(1	)
Net income attributable to Blue Ridge Bankshares, Inc.	$	14,532		$	1,698	$	5,379			—		$	21,609
Total assets as of September 30, 2022	$	2,796,033		$	50,354	$	305,029		$	(271,844	)	$	2,879,572

Note 15 – Changes to Accumulated Other Comprehensive Income (Loss), net

The following tables present components of accumulated other comprehensive income (loss) for the periods stated.

For the three months ended June 30, 2023

(Dollars in thousands)

Net Unrealized Losses on Available for Sale Securities

Transfer of Securities Held to Maturity to Available For Sale

Pension and Post-retirement Benefit Plans

Accumulated Other Comprehensive Loss, net

Balance as of April 1, 2023

$
(41,659
)

$
425

$
(1
)

$
(41,235
)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $1,446

(5,023
)

—

—

(5,023
)
Balance as of June 30, 2023

$
(46,682
)

$
425

$
(1
)

$
(46,258
)

For the three months ended June 30, 2022

(Dollars in thousands)

Net Unrealized Losses on Available for Sale Securities

Transfer of Securities Held to Maturity to Available For Sale

Pension and Post-retirement Benefit Plans

Accumulated Other Comprehensive Loss, net

Balance as of April 1, 2022

$
(21,900
)

$
425

$
(1
)

$
(21,476
)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $4,257

(16,015
)

—

—

(16,015
)
Balance as of June 30, 2022

$
(37,915
)

$
425

$
(1
)

$
(37,491
)


	For the three months ended September 30, 2023
(Dollars in thousands)	Net Unrealized Losses on Available for Sale Securities			Transfer of Securities Held to Maturity to Available For Sale		Pension and Post-retirement Benefit Plans			Accumulated Other Comprehensive Loss, net
Balance as of July 1, 2023	$	(46,682	)	$	425	$	(1	)	$	(46,258	)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $2,309		(8,022	)		—		—			(8,022	)
Reclassification for previously unrealized net losses recognized in net income, net of income tax benefit of $145		504			—		—			504
Balance as of September 30, 2023	$	(54,200	)	$	425	$	(1	)	$	(53,776	)

	For the three months ended September 30, 2022
(Dollars in thousands)	Net Unrealized Losses on Available for Sale Securities			Transfer of Securities Held to Maturity to Available For Sale		Pension and Post-retirement Benefit Plans			Accumulated Other Comprehensive Loss, net
Balance as of July 1, 2022	$	(37,915	)	$	425	$	(1	)	$	(37,491	)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $3,160		(11,889	)		—		—			(11,889	)
Balance as of September 30, 2022	$	(49,804	)	$	425	$	(1	)	$	(49,380	)


	For the six months ended June 30, 2023											For the nine months ended September 30, 2023
(Dollars in thousands)	Net Unrealized Losses on Available for Sale Securities			Transfer of Securities Held to Maturity to Available For Sale		Pension and Post-retirement Benefit Plans			Accumulated Other Comprehensive Loss, net			Net Unrealized Losses on Available for Sale Securities			Transfer of Securities Held to Maturity to Available For Sale		Pension and Post-retirement Benefit Plans			Accumulated Other Comprehensive Loss, net
Balance as of January 1, 2023	$	(45,525	)	$	425	$	(1	)	$	(45,101	)	$	(45,525	)	$	425	$	(1	)	$	(45,101	)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $333		(1,157	)		—		—			(1,157	)
Balance as of June 30, 2023	$	(46,682	)	$	425	$	(1	)	$	(46,258	)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $2,642													(9,179	)		—		—			(9,179	)
Reclassification for previously unrealized net losses recognized in net income, net of income tax benefit of $145													504			—		—			504
Balance as of September 30, 2023												$	(54,200	)	$	425	$	(1	)	$	(53,776	)

	For the six months ended June 30, 2022											For the nine months ended September 30, 2022
(Dollars in thousands)	Net Unrealized Losses on Available for Sale Securities			Transfer of Securities Held to Maturity to Available For Sale		Pension and Post-retirement Benefit Plans			Accumulated Other Comprehensive Loss, net			Net Unrealized Losses on Available for Sale Securities			Transfer of Securities Held to Maturity to Available For Sale		Pension and Post-retirement Benefit Plans			Accumulated Other Comprehensive Loss, net
Balance as of January 1, 2022	$	(4,056	)	$	425	$	(1	)	$	(3,632	)	$	(4,056	)	$	425	$	(1	)	$	(3,632	)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $9,000		(33,859	)		—		—			(33,859	)
Balance as of June 30, 2022	$	(37,915	)	$	425	$	(1	)	$	(37,491	)
Change in net unrealized holding losses on securities available for sale, net of deferred tax benefit of $12,160													(45,748	)		—		—			(45,748	)
Balance as of September 30, 2022												$	(49,804	)	$	425	$	(1	)	$	(49,380	)

Note 16 – Legal Matters

In the ordinary course of operations, the Company is party to legal proceedings. Based upon information currently available, management believes that such legal proceedings, in the aggregate, will not have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.

On August 12, 2019, a former employee of Virginia Community Bankshares, Inc. (“VCB”) and participant in its Employee Stock Ownership Plan (the “VCB ESOP”) filed a class action complaint against VCB, Virginia Community Bank, and certain individuals associated with the VCB ESOP in the U.S. District Court for the Western District of Virginia, Charlottesville Division. The complaint alleges, among other things, that the defendants breached their fiduciary duties to VCB ESOP participants in violation of the Employee Retirement Income Security Act of 1974, as amended. The complaint alleges that the VCB ESOP incurred damages “that approach or exceed $12 million.” The

Company automatically assumed any liability of VCB in connection with this litigation as a result of its 2019 acquisition of VCB. ~~The outcome~~

In the third quarter of ~~this litigation is uncertain, and~~2023, the Company entered into a settlement term sheet with the plaintiff to resolve the VCB ESOP litigation (the "Term Sheet"). Under the Term Sheet, the parties have agreed to negotiate towards entering into a formal settlement agreement (the "Settlement Agreement") that would be contingent upon approval by the court hearing the case. As provided in the Term Sheet, the plaintiff has agreed to release the Company, the Bank, and ~~other individuals may file additional lawsuits~~related parties from all claims related to acts or omissions associated with the VCB ESOP, once the Settlement Agreement is entered into and approved by the court. The Company has agreed to make a settlement payment of $6.0 million to a fund for the benefit of VCB ESOP participants, with $5.95 million due after final approval of the settlement by the court, which is expected to occur late in the first quarter or early in the second quarter of 2024. If the court approves the Settlement Agreement, the ongoing lawsuit will be dismissed with prejudice, and all similar claims that were or could have been brought relating to the VCB ESOP will be released and barred.

The Company entered into the Term Sheet to eliminate the burden and expense of further litigation and to resolve the claims that were or could have been asserted related to the VCB ESOP. The Company ~~believes~~accrued $6.0 million in the ~~claims are without merit~~third quarter of 2023 in anticipation of this proposed settlement.

Note 17 – Subsequent Events

On October 30, 2023, the Board of Directors (the “Board”) of the Company determined to forego the declaration and no ~~loss has been accrued for this lawsuit.~~payment of a cash dividend on the Company’s common stock in the fourth quarter of 2023. Additionally, the Board made the decision to suspend future quarterly dividend payments until further notice. The decision was based on the desire to preserve capital.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following presents management’s discussion and analysis of the Company’s consolidated financial condition and the results of our operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the notes thereto included in this Form 10-Q and the audited consolidated financial statements and the notes thereto included in our Annual Report on Form ~~10-K~~10-K/A for the year ended December 31, 2022 (the “2022 Form ~~10-K~~10-K/A”). Results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2023 are not necessarily indicative of the results of operations for the balance of 2023, or for any other period. As used in this report, the terms “the Company,” “we,” “us,” and “our” refer to Blue Ridge Bankshares, Inc. and its consolidated subsidiaries. The term “Bank” refers to Blue Ridge Bank, National Association.

The Company makes certain forward-looking statements in this Form 10-Q that are subject to risks and uncertainties. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of management’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on management’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond its control. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.

The following factors, among others, could cause the Company’s financial performance to differ materially from that expressed in such forward-looking statements: (i) the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; (ii) 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; (iii) the residual effects of the COVID-19 pandemic, including the adverse impact on the Company’s business and operations and on the Company’s customers which may result, among other things, in increased delinquencies, defaults, foreclosures and losses on loans; (iv) the occurrence of significant natural disasters, including severe weather conditions, floods, health related issues, and other catastrophic events; (v) 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; (vi) changes in consumer spending and savings habits; (vii) deposit out flows; (viii) technological and social media changes; (ix) the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rate, market and monetary fluctuations; (x) 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 Company’s subsidiary 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; (xi) the impact of changes in financial services policies, laws, and regulations, including laws, regulations and policies concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies; (xii) the impact of, and the ability to comply with, the terms of the formal written agreement between the Bank and the Office of the Comptroller of the Currency (the “OCC”); (xiii) the impact of changes in laws, regulations, and policies affecting the real estate industry; (xiv) the effect of changes in accounting policies and practices, as may be adopted from time to time by bank regulatory agencies, the Securities and Exchange Commission (the “SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setting bodies; (xv) the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; (xvi) the willingness of users to substitute competitors’ products and services for the Company’s products and services; (xvii) the outcome of any legal proceedings that may be instituted against the Company; (xviii) reputational risk and potential adverse reactions of the Company’s customers, suppliers, employees, or other business partners; (xix) the ability to maintain adequate liquidity

by retaining ~~deposits~~deposit customers and secondary funding sources, especially if the Company's or industry's reputation become damaged; (xx) maintaining capital levels adequate to support the Company's ~~growth~~business and to remain well-capitalized under regulatory standards; (xxi) the effects of acquisitions the Company may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such transactions; (xxii) changes in the level of the Company’s nonperforming assets and charge-offs; (xxiii) the Company’s involvement, from time to time, in legal proceedings and examination and remedial actions by regulators; (xxiv) 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; (xxv) potential exposure to fraud, negligence, computer theft, and cyber-crime; (xxvi) the Company’s ability to pay dividends; (xxvii) the ability to manage the Company's fintech relationships, including implementing enhanced controls and maintaining deposit levels and the quality of loans associated with these relationships; (xxviii) the Company’s involvement as a participating lender in the Paycheck Protection Program (“PPP”) as administered through the U.S. Small Business Administration; and ~~(xxiv)~~(xxix) other risks and factors identified in the “Risk Factors” sections and elsewhere in documents the Company files from time to time with the SEC.

The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in the 2022 Form ~~10-K~~10-K/A and this Form 10-Q, including those discussed in the ~~section~~sections entitled “Risk Factors.” If one or more of the factors affecting forward-looking information and statements proves incorrect, then actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this Form 10-Q. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements. The Company will not update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how these risks and uncertainties will affect it.

On August 29, 2022, the Bank entered into a formal written agreement (the “Written Agreement”) with the OCC, the Bank's primary federal banking regulator. The Written Agreement principally concerns the Bank’s fintech line of business and requires the Bank to continue enhancing its controls for assessing and managing the third-party, Bank Secrecy Act/Anti-Money Laundering, and information technology risks stemming from its fintech partnerships. A complete copy of the Written Agreement was filed as an exhibit to a Form 8-K filed with the SEC on September 1, 2022 and can be accessed on the SEC’s website (www.sec.gov) and the Company’s website (www.blueridgebankshares.com).

The Company is actively working to bring the Bank’s fintech policies, procedures, and operations into conformity with OCC directives. ~~The Company reports that although~~Although work is progressing, many aspects of the Written Agreement require considerable time for completion, implementation, validation, and ~~sustainability.~~sustainability problems, and weaknesses in the Bank’s BSA compliance program remain, which could subject the Bank to additional compliance costs and further regulatory enforcement actions and/or civil monetary penalties. If the Company does not comply with the Written Agreement, or the OCC imposes additional measures, the Company could be subject to additional regulatory requirements or directives, including developing and maintaining capital plans, asset sales, loan reserves or impairments, limitations on growth, further regulatory sanctions, and/or other regulatory enforcement actions.

On May 15, 2023, the Company sold its wholesale mortgage business operating as LenderSelect Mortgage Group (“LSMG”) to a third-party for $250 thousand in cash. The Company recorded a loss on the sale of LSMG of $553 thousand, which is reported in other noninterest income in the consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2023.

The Company sold its majority interest in MoneyWise Payroll Solutions, Inc. (“MoneyWise”) to the holder of the minority interest in MoneyWise in the first quarter of 2022. Income statement amounts related to MoneyWise are reported as discontinued operations for all periods presented.

There were no changes to the Critical Accounting Policies disclosed in Item 7 of the 2022 Form ~~10-K,~~10-K/A, except as noted in Part I, Note 2 - Adoption of New Accounting Standard of this Form 10-Q, which describes the Company's adoption of Accounting Standards Codification (“ASC”) 326 - Financial Instruments – Credit Losses (referred herein as “ASC 326” or “CECL”), effective January 1, 2023.

Certain amounts presented in the consolidated financial statements of prior periods have been reclassified to conform to current year presentations. The reclassifications had no effect on net income, net income per share, total assets, total liabilities, or stockholders’ equity as previously reported.

Comparison of Financial Condition as of ~~June~~September 30, 2023 and December 31, 2022

Total assets were ~~$3.21~~$3.26 billion as of ~~June~~September 30, 2023, an increase of ~~$73.4~~$132.2 million from ~~$3.14~~$3.13 billion as of December 31, 2022. Most of this increase was attributable to higher cash and due from banks balances, which increased ~~$54.6~~$161.3 million to ~~$131.8~~$238.6 million as of ~~June~~September 30, 2023 from $77.3 million as of December 31, 2022. Loans held for investment, excluding PPP loans, increased ~~$52.6~~$40.9 million to ~~$2.45~~$2.44 billion as of ~~June~~September 30, 2023 from $2.40 billion at December 31, ~~2022, an annualized growth rate of 4.39%.~~2022. The allowance for credit losses (“ACL”) increased ~~$20.1~~$18.9 million to ~~$43.1~~$49.6 million as of ~~June~~September 30, 2023 from ~~$22.9~~$30.7 million as of December 31, 2022. Most of this increase was attributable to ~~$14.1 million of~~ specific reserves for specialty finance loans, reported in commercial and industrial loans, ~~placed on nonaccrual status in the second quarter of 2023,~~ while ~~$4.0~~$7.4 million of the year-to-date increase was due to the adoption of ASC 326 on January 1, 2023.

Total deposits as of ~~June~~September 30, 2023 were ~~$2.61~~$2.78 billion, an increase of ~~$110.6~~$273.6 million from December 31, 2022. The increase in the first ~~six~~nine months of 2023 was primarily due to an increase of ~~$220.1~~$336.3 million in time deposit balances, of which ~~$211.0~~$409.5 million was attributable to brokered time ~~deposits secured primarily in response to banking industry liquidity events in March 2023.~~deposits. Partially offsetting this increase were lower noninterest-bearing demand deposit balances of ~~$64.1~~$67.1 million. Deposits related to fintech relationships increased by ~~$17.4~~$30.6 million ~~or 2.52%,~~ from December 31, 2022, to ~~$707.6~~$720.8 million as of ~~June~~September 30, 2023. Fintech related deposits represented ~~27.1%~~26.0% and 27.6% of total deposits as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

Total stockholders’ equity decreased by ~~$28.1~~$66.0 million to ~~$231.3~~$182.8 million as of ~~June~~September 30, 2023 compared to ~~$259.4~~$248.8 million at December 31, 2022. Of the decrease, ~~$17.9~~$46.0 million was due to a net loss for the first ~~six~~nine months of 2023, while ~~$5.5~~$8.1 million was attributable to the after-tax adoption of ASC 326. The fair value of the Company’s portfolio of securities available for sale (“AFS”) decreased in the first ~~six~~nine months of 2023, primarily as a result of a modest increase in market longer-term interest rates, resulting in an after-tax decrease in stockholders’ equity of ~~$1.2~~$8.7 million. The Company had no investment securities classified as held to maturity as of ~~June~~September 30, 2023 or December 31, 2022.

Comparison of Results of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022

For the three months ended ~~June~~September 30, 2023, the Company reported a net loss from continuing operations of ~~($19.5)~~$41.4 million, or ~~($1.03)~~$2.18 per diluted common share, compared to net income from continuing operations of ~~$1.1~~$2.7 million, or ~~$0.06~~$0.15 per diluted common share, for the three months ended ~~June~~September 30, 2022.

For the ~~six~~nine months ended ~~June~~September 30, 2023, the Company reported a net loss from continuing operations of ~~($17.9)~~$46.0 million, or ~~($0.95)~~$2.43 per diluted common share, compared to net income from continuing operations of ~~$18.5~~$21.3 million, or ~~$0.99~~$1.13 per diluted common share, for the ~~six~~nine months ended ~~June~~September 30, 2022.

The loss from continuing operations before income taxes for the three and ~~six~~nine months ended ~~June~~September 30, 2023 included a $26.8 million non-cash, after-tax charge for goodwill impairment related to the Company's stock performance and a provision for credit losses on loans of ~~$21.1~~$11.6 million and ~~$25.2~~$21.1 million, respectively, most of which was attributable to specific reserves on specialty finance ~~loans totaling $14.1 million. Additionally, net loan charge-offs~~loans. The Company recorded a $6.0 million settlement reserve in the third quarter of ~~$8.0 million and $9.1 million were recorded~~2023 for the ~~same respective periods.~~previously disclosed Employee Stock Ownership Plan ("ESOP") litigation assumed in the 2019 acquisition of Virginia Community Bankshares, Inc. ("VCB"). Also contributing to the decline in income

from continuing operations before income taxes from the year-ago periods was ~~$9.3~~$9.2 million of fair value adjustments for the Company's equity investments, primarily in certain fintech companies, reported in the 2022 ~~period.~~periods. For the three and ~~six~~nine months ended ~~June~~September 30, 2023, income from continuing operations before income taxes included ~~$2.4~~$3.8 million and ~~$3.5~~$7.3 million, respectively, of costs incurred primarily for professional services and staff augmentation related to regulatory remediation efforts in connection with the Written ~~Agreement.~~

Net Interest Income. Net interest income is the amount by which interest earned on assets exceeds the interest paid on interest-bearing liabilities and is the Company’s primary revenue source. Net interest income is thereby affected by overall balance sheet growth, changes in interest rates, and changes in the mix of investments, loans, deposits, and borrowings. The Company’s principal interest-earning assets are loans to businesses, real estate investors, and individuals and its investment securities portfolio. Interest-bearing liabilities consist primarily of negotiable order of withdrawal and savings accounts, money market accounts, certificates of deposit, and Federal Home Loan Bank of Atlanta (“FHLB”) and Federal Reserve Bank of Richmond (“FRB”) advances. A common net interest income measure is net interest margin. Net interest margin represents the difference between interest income and interest expense calculated as a percentage of average interest-earning assets.

The following table presents the average balance sheets for the three months ended ~~June~~September 30, 2023 and 2022. Also shown are the amounts of interest earned on interest-earning assets, with related tax-equivalent yields, and interest expense on interest-bearing liabilities, with related rates, as well as a volume and rate analysis of changes in net interest income for the periods stated.


		Average Balances, Income and Expense, Yields and Rates																											Average Balances, Income and Expense, Yields and Rates
		For the three months ended June 30,																											For the three months ended September 30,
		2023								2022									Total Increase/			Increase/(Decrease) Due to							2023								2022								Total Increase/			Increase/(Decrease) Due to
(Dollars in thousands)		Average Balance			Interest		Yield/ Rate (1)			Average Balance			Interest			Yield/ Rate (1)			(Decrease)			Volume (2)			Rate (2)				Average Balance			Interest		Yield/ Rate (1)			Average Balance			Interest		Yield/ Rate (1)			(Decrease)			Volume (2)			Rate (2)
Average Assets
Taxable securities		$	367,814		$	2,543		2.77	%	$	394,000		$	2,129			2.16	%	$	414		$	(141	)	$	555			$	355,373		$	2,493		2.81	%	$	394,235		$	2,337		2.37	%	$	156		$	(230	)	$	386
Tax-exempt securities (3)			20,713			121		2.34	%		21,336			113			2.12	%		8			(3	)		11				15,383			93		2.42	%		20,783			103		1.98	%		(10	)		(27	)		17
Total securities			388,527			2,664		2.74	%		415,336			2,242			2.16	%		422			(145	)		567				370,756			2,586		2.79	%		415,018			2,440		2.35	%		146			(257	)		403
Interest-earning deposits in other banks			121,248			1,452		4.79	%		77,703			148			0.76	%		1,304			83			1,221				126,660			1,312		4.14	%		82,935			352		1.70	%		960			186			774
Federal funds sold			3,539			45		5.09	%		44,979			90			0.80	%		(45	)		(83	)		38				4,270			57		5.34	%		31,192			171		2.19	%		(114	)		(148	)		34
Loans held for sale			56,102			396		2.82	%		42,957			348			3.24	%		48			106			(58	)			67,021			446		2.66	%		29,985			213		2.84	%		233			263			(30	)
Paycheck Protection Program loans (4)			7,599			16		0.84	%		19,412			64			1.32	%		(48	)		(39	)		(9	)			6,744			13		0.77	%		14,060			40		1.14	%		(27	)		(21	)		(6	)
Loans held for investment (4,5,6)			2,487,089			34,428		5.54	%		1,881,678			23,376			4.97	%		11,052			7,521			3,531				2,463,344			38,092		6.19	%		2,113,186			29,950		5.67	%		8,142			4,963			3,179
Total average interest-earning assets			3,064,104			39,001		5.09	%		2,482,065			26,268			4.23	%		12,733			7,444			5,289				3,038,795			42,506		5.60	%		2,686,376			33,166		4.94	%		9,340			4,986			4,354
Less: allowance for credit losses			(31,151	)							(13,619	)																		(41,034	)							(18,251	)
Total noninterest-earning assets			244,330								232,125																			251,468								235,322
Total average assets		$	3,277,283							$	2,700,571																		$	3,249,229							$	2,903,447
Average Liabilities and Stockholders’ Equity:
Interest-bearing demand, money market deposits, and savings		$	1,347,499		$	8,860		2.63	%	$	1,144,418		$	690			0.24	%	$	8,170		$	122		$	8,048			$	1,349,336		$	10,038		2.98	%	$	1,198,555		$	2,219		0.74	%	$	7,819		$	279		$	7,540
Time deposits (7)			661,259			5,764		3.49	%		415,815			851			0.82	%		4,913			502			4,411				643,449			6,077		3.78	%		382,961			814		0.85	%		5,263			554			4,709
Total interest-bearing deposits			2,008,758			14,624		2.91	%		1,560,233			1,541			0.40	%		13,083			624			12,459				1,992,785			16,115		3.23	%		1,581,516			3,033		0.77	%		13,082			833			12,249
FHLB borrowings ~~(8)~~			262,345			2,958		4.51	%		23,955			(33	)		(0.55	)%		2,991			(328	)		3,319				256,668			2,836		4.42	%		149,711			866		2.31	%		1,970			619			1,351
FRB borrowings			35,714			439		4.92	%		3,266			100			12.25	%		339			994			(655	)			65,000			777		4.78	%		58			—		—			777			—			—
Subordinated notes and other borrowings ~~(9)~~(8)			39,905			548		5.49	%		39,969			545			5.45	%		3			(1	)		4				39,906			566		5.67	%		39,961			570		5.71	%		(4	)		(1	)		(3	)
Total average interest-bearing liabilities			2,346,722			18,569		3.17	%		1,627,423			2,153			0.53	%		16,416			1,289			15,127				2,354,359			20,294		3.45	%		1,771,246			4,469		1.01	%		15,825			1,451			13,597
Noninterest-bearing demand deposits			638,274								772,310																			624,202								835,389
Other noninterest-bearing liabilities			35,170								29,700																			32,138								29,755
Stockholders' equity			257,117								271,138																			238,530								267,057
Total average liabilities and stockholders’ equity		$	3,277,283							$	2,700,571																		$	3,249,229							$	2,903,447
Net interest income and margin (10)					$	20,432		2.67	%				$	24,115			3.89	%	$	(3,683	)	$	6,155		$	(9,838	)
Cost of funds (11)								2.49	%								0.36	%
Net interest spread (12)								1.93	%								3.70	%
Net interest income and margin (9)																																$	22,212		2.92	%				$	28,697		4.27	%	$	(6,485	)	$	3,535		$	(9,243	)
Cost of funds (10)																																			2.73	%							0.69	%
Net interest spread (11)																																			2.15	%							3.93	%

(1) Annualized.	(1) Annualized.																											(1) Annualized.
(2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each.	(2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each.																											(2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each.
(3) Computed on a fully taxable equivalent basis assuming a 22.65% and 21% income tax rate for the three months ended June 30, 2023 and 2022, respectively.
(3) Computed on a fully taxable equivalent basis assuming a 22.65% and 21% income tax rate for the three months ended September 30, 2023 and 2022, respectively.																												(3) Computed on a fully taxable equivalent basis assuming a 22.65% and 21% income tax rate for the three months ended September 30, 2023 and 2022, respectively.
(4) Includes deferred loan fees/costs.	(4) Includes deferred loan fees/costs.																											(4) Includes deferred loan fees/costs.
(5) Non-accrual loans have been included in the computations of average loan balances.	(5) Non-accrual loans have been included in the computations of average loan balances.																											(5) Non-accrual loans have been included in the computations of average loan balances.
(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $463 thousand and $1.3 million for the three months ended June 30, 2023 and 2022, respectively.
(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $222 thousand and $366 thousand for the three months ended June 30, 2023 and 2022, respectively.
(8) Includes amortization of fair value adjustments (premiums) on assumed FHLB borrowings of $0 and $108 thousand for the three months ended June 30, 2023 and 2022, respectively.
(9) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $25 thousand for both the three months ended June 30, 2023 and 2022.
(10) Net interest margin is net interest income divided by average interest-earning assets.
(11) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits.
(12) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities.
(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $624 thousand and $758 thousand for the three months ended September 30, 2023 and 2022, respectively.																												(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $624 thousand and $758 thousand for the three months ended September 30, 2023 and 2022, respectively.
(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $160 thousand and $336 thousand for the three months ended September 30, 2023 and 2022, respectively.																												(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $160 thousand and $336 thousand for the three months ended September 30, 2023 and 2022, respectively.
(8) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $25 thousand for both the three months ended September 30, 2023 and 2022.																												(8) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $25 thousand for both the three months ended September 30, 2023 and 2022.
(9) Net interest margin is net interest income divided by average interest-earning assets.																												(9) Net interest margin is net interest income divided by average interest-earning assets.
(10) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits.																												(10) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits.
(11) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities.																												(11) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities.

Average interest-earning assets were ~~$3.06~~$3.04 billion for the three months ended ~~June~~September 30, 2023 compared to ~~$2.48~~$2.69 billion for the same period of 2022, a ~~$582.0~~$352.4 million increase. This increase was primarily attributable to growth in average balances of loans held for investment, which were greater by ~~$605.4~~$350.2 million in the 2023 period compared to the 2022 ~~period, partially offset by lower average balances of taxable securities, federal funds sold, and PPP loans.~~period. Total interest income (on a taxable equivalent basis) increased ~~$12.7~~$9.3 million for the three-month period ended ~~June~~September 30, 2023 from the same period of 2022. This increase was primarily due to higher average balances and yields, including fee income, on loans held for investment, and interest earning deposits in other banks. Higher

yields in the 2023 period were primarily attributable the re-pricing of variable rate loans and new ~~loans~~loan production in the higher interest rate environment, partially offset by the reversal of interest on the previously mentioned group of specialty loans placed on nonaccrual status in the second quarter of 2023, and lower accretion of purchase accounting adjustments (discounts) on acquired loans. The reversal of interest income in the second quarter of 2023 was $4.7 million for the group of specialty finance loans placed on nonaccrual status, which had an approximate negative 75 basis point impact on the yield on loans held

~~for investment.~~environment. Interest income for the three months ended ~~June~~September 30, 2023 and 2022 included accretion of discounts on acquired loans of ~~$463~~$624 thousand and ~~$1.3 million,~~$758 thousand, respectively.

Average interest-bearing liabilities were $2.35 billion for the three months ended ~~June~~September 30, 2023 compared to ~~$1.63~~$1.77 billion for the same period of 2022, a ~~$719.3~~$583.1 million increase. Of this increase, ~~$533.4~~$260.5 million was attributable to higher average balances of ~~wholesale funding,~~time deposits, primarily brokered time deposits, ~~and~~while $107.0 million was attributable to higher average balances of FHLB advances. Interest expense increased by ~~$16.4~~$15.8 million to ~~$18.6~~$20.3 million for the three months ended ~~June~~September 30, 2023 compared to the same period of 2022. Cost of interest-bearing liabilities increased to ~~3.17%~~3.45% for the ~~second~~third quarter of 2023 from ~~0.53%~~1.01% for the ~~second~~third quarter of 2022, while cost of funds were ~~2.49%~~2.73% and ~~0.36%~~0.69% for the same respective periods. Higher cost of funds in the 2023 period was primarily due to higher market interest rates and a shift in the mix of average ~~interest-bearing~~ liabilities, including higher cost wholesale ~~funding sources.~~funding. Interest expense in the ~~second~~third quarters of 2023 and 2022 included the amortization of fair value adjustments (premium) on assumed time deposits of ~~$222~~$160 thousand and ~~$366~~$336 thousand, respectively, which was a reduction to interest expense.

Net interest income (on a taxable equivalent basis) for the three months ended ~~June~~September 30, 2023 was ~~$20.4~~$22.2 million compared to ~~$24.1~~$28.7 million for the same period in 2022, a decrease of ~~$3.7~~$6.5 million. Net interest margin was ~~2.67%~~2.92% and ~~3.89%~~4.27% for the ~~second~~third quarters of 2023 and 2022, respectively. ~~The reversal of interest income previously noted had an approximate negative 60 basis point impact on net interest margin for the second quarter of 2023.~~ Accretion and amortization of purchase accounting adjustments had a 911 and 2917 basis point positive effect on net interest margin for the same respective periods.

The following table presents the average balance sheets for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022. Also shown are the amounts of interest earned on interest-earning assets, with related tax-equivalent yields, and interest expense on interest-bearing liabilities, with related rates, as well as a volume and rate analysis of changes in net interest income for the periods stated.


		Average Balances, Income and Expense, Yields and Rates																											Average Balances, Income and Expense, Yields and Rates
		For the six months ended June 30,																											For the nine months ended September 30,
		2023								2022									Total Increase/			Increase/(Decrease) Due to							2023								2022								Total Increase/			Increase/(Decrease) Due to
(Dollars in thousands)		Average Balance			Interest		Yield/ Rate (1)			Average Balance			Interest			Yield/ Rate (1)			(Decrease)			Volume (2)			Rate (2)				Average Balance			Interest		Yield/ Rate (1)			Average Balance			Interest		Yield/ Rate (1)			(Decrease)			Volume (2)			Rate (2)
Average Assets
Taxable securities		$	371,270		$	5,171		2.79	%	$	388,419		$	3,899			2.01	%	$	1,272		$	(172	)	$	1,444			$	365,802		$	7,663		2.79	%	$	391,144		$	6,236		2.13	%	$	1,427		$	(404	)	$	1,831
Tax-exempt securities (3)			20,719			239		2.31	%		20,359			208			2.04	%		31			4			27				18,921			331		2.33	%		20,502			310		2.02	%		21			(24	)		45
Total securities			391,989			5,410		2.76	%		408,778			4,107			2.01	%		1,303			(168	)		1,471				384,723			7,994		2.77	%		411,646			6,546		2.12	%		1,448			(428	)		1,876
Interest-earning deposits in other banks			114,469			2,393		4.18	%		86,160			183			0.42	%		2,210			60			2,150				118,576			3,705		4.17	%		85,073			535		0.84	%		3,170			211			2,959
Federal funds sold			6,200			144		4.65	%		48,201			112			0.46	%		32			(98	)		130				5,549			201		4.83	%		42,469			283		0.89	%		(82	)		(246	)		164
Loans held for sale			48,107			678		2.82	%		58,249			969			3.33	%		(291	)		(169	)		(122	)			54,481			1,124		2.75	%		48,724			1,183		3.24	%		(59	)		140			(199	)
Paycheck Protection Program loans (4)			8,924			36		0.81	%		23,225			457			3.94	%		(421	)		(281	)		(140	)			8,190			49		0.80	%		20,136			497		3.29	%		(448	)		(295	)		(153	)
Loans held for investment (4,5,6)			2,492,544			73,420		5.89	%		1,840,395			46,261			5.03	%		27,159			16,393			10,766				2,481,518			112,836		6.06	%		1,932,315			76,211		5.26	%		36,625			21,661			14,964
Total average interest-earning assets			3,062,233			82,081		5.36	%		2,465,008			52,089			4.23	%		29,992			15,737			14,255				3,053,037			125,909		5.50	%		2,540,363			85,255		4.47	%		40,654			21,043			19,611
Less: allowance for credit losses			(27,954	)							(12,845	)																		(37,992	)							(14,667	)
Total noninterest-earning assets			239,584								230,652																			242,886								233,896
Total average assets		$	3,273,863							$	2,682,815																		$	3,257,931							$	2,759,592
Average Liabilities and Stockholders’ Equity:
Interest-bearing demand, money market deposits, and savings		$	1,317,834		$	17,119		2.60	%	$	1,113,751		$	1,275			0.23	%	$	15,844		$	234		$	15,610			$	1,328,450		$	27,157		2.73	%	$	1,142,330		$	3,494		0.41	%	$	23,663		$	569		$	23,094
Time deposits (7)			587,858			8,836		3.01	%		449,339			1,822			0.81	%		7,014			562			6,452				606,592			14,913		3.28	%		426,970			2,635		0.82	%		12,278			1,109			11,169
Total interest-bearing deposits			1,905,692			25,955		2.72	%		1,563,090			3,097			0.40	%		22,858			795			22,063				1,935,042			42,070		2.90	%		1,569,300			6,129		0.52	%		35,941			1,678			34,263
FHLB borrowings (8)			295,102			6,768		4.59	%		17,071			(22	)		(0.26	)%		6,790			(358	)		7,148				282,150			9,604		4.54	%		61,770			845		1.82	%		8,759			3,015			5,744
FRB borrowings			17,958			439		4.89	%		9,786			114			2.33	%		325			95			230				33,811			1,216		4.80	%		6,508			114		2.34	%		1,102			478			624
Subordinated notes and other borrowings (9)			39,916			1,102		5.52	%		39,969			1,099			5.50	%		3			(1	)		4				39,908			1,666		5.57	%		39,961			1,668		5.57	%		(2	)		(2	)		0
Total average interest-bearing liabilities			2,258,668			34,264		3.03	%		1,629,916			4,288			0.53	%		29,976			531			29,445				2,290,911			54,556		3.18	%		1,677,539			8,756		0.70	%		45,800			5,169			40,631
Noninterest-bearing demand deposits			723,131								745,820																			690,117								775,440
Other noninterest-bearing liabilities			34,947								35,831																			38,373								39,482
Stockholders' equity			257,117								271,248																			238,530								267,131
Total average liabilities and stockholders’ equity		$	3,273,863							$	2,682,815																		$	3,257,931							$	2,759,592
Net interest income and margin (10)					$	47,817		3.12	%				$	47,801			3.88	%	$	16		$	15,206		$	(15,190	)					$	71,353		3.12	%				$	76,499		4.02	%	$	(5,146	)	$	15,874		$	(21,020	)
Cost of funds (11)								2.30	%								0.36	%																	2.44	%							0.48	%
Net interest spread (12)								2.33	%								3.70	%																	2.32	%							3.78	%

(1) Annualized.	(1) Annualized.																											(1) Annualized.
(2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each.	(2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each.																											(2) Change in income/expense due to both volume and rate has been allocated in proportion to the absolute dollar amounts of the change in each.
(3) Computed on a fully taxable equivalent basis assuming a 22.65% and 21% income tax rate for the six months ended June 30, 2023 and 2022, respectively.
(3) Computed on a fully taxable equivalent basis assuming a 22.65% and 21% income tax rate for the nine months ended September 30, 2023 and 2022, respectively.																												(3) Computed on a fully taxable equivalent basis assuming a 22.65% and 21% income tax rate for the nine months ended September 30, 2023 and 2022, respectively.
(4) Includes deferred loan fees/costs.	(4) Includes deferred loan fees/costs.																											(4) Includes deferred loan fees/costs.
(5) Non-accrual loans have been included in the computations of average loan balances.	(5) Non-accrual loans have been included in the computations of average loan balances.																											(5) Non-accrual loans have been included in the computations of average loan balances.
(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $1.2 million and $4.1 million for the six months ended June 30, 2023 and 2022, respectively.
(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $506 thousand and $840 thousand for the six months ended June 30, 2023 and 2022, respectively.
(8) Includes amortization of fair value adjustments (premiums) on assumed FHLB borrowings of $0 and $111 thousand for the six months ended June 30, 2023 and 20221, respectively.
(9) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $50 thousand for both the six months ended June 30, 2023 and 2022.
(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $1.8 million and $4.8 million for the nine months ended September 30, 2023 and 2022, respectively.																												(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $1.8 million and $4.8 million for the nine months ended September 30, 2023 and 2022, respectively.
(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $666 thousand and $1.2 million for the nine months ended September 30, 2023 and 2022, respectively.																												(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $666 thousand and $1.2 million for the nine months ended September 30, 2023 and 2022, respectively.
(8) Includes amortization of fair value adjustments (premiums) on assumed FHLB borrowings of $111 thousand for the nine months ended September 30, 2022.																												(8) Includes amortization of fair value adjustments (premiums) on assumed FHLB borrowings of $111 thousand for the nine months ended September 30, 2022.
(9) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $75 thousand for both the nine months ended September 30, 2023 and 2022.																												(9) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $75 thousand for both the nine months ended September 30, 2023 and 2022.
(10) Net interest margin is net interest income divided by average interest-earning assets.	(10) Net interest margin is net interest income divided by average interest-earning assets.																											(10) Net interest margin is net interest income divided by average interest-earning assets.
(11) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits.	(11) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits.																											(11) Cost of funds is total interest expense divided by total interest-bearing liabilities and non-interest bearing demand deposits.
(12) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities.	(12) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities.																											(12) Net interest spread is the yield on average interest-earning assets less the cost of average interest-bearing liabilities.

Average interest-earning assets were ~~$3.06~~$3.05 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$2.47~~$2.54 billion for the same period of 2022, a ~~$597.2~~$512.7 million increase. This increase was primarily attributable to growth in average balances of loans held for investment, which increased ~~$652.1~~$549.2 million in the 2023 period compared to the 2022 period, partially offset by lower average balances of taxable securities, federal funds sold, loans held for sale, and PPP loans. Total interest income (on a taxable equivalent basis) increased ~~$30.0~~$40.7 million for the ~~six-month~~nine-month period ended ~~June~~September 30, 2023 from the same period of 2022. This increase was primarily due to higher average balances and yields, including fee income on loans held for investment and ~~interest earning~~interest-earning deposits in other banks. Higher yields in the 2023 period were primarily attributable to the re-pricing of variable rate loans and new ~~loans~~loan production in the higher interest rate environment, partially offset by ~~the previously noted reversal of interest income on nonaccrual loans, and~~ lower accretion of purchase accounting adjustments (discounts) on acquired loans. Interest income for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 included accretion of discounts on acquired loans of ~~$1.2~~$1.8 million thousand and ~~$4.1~~$4.8 million, respectively.

Average interest-bearing liabilities were ~~$2.26~~$2.29 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$1.63~~$1.68 billion for the same period of 2022, a ~~$628.8~~$613.4 million increase. Interest expense increased by ~~$30.0~~$45.8 million to ~~$34.3~~$54.6 million for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to the same period of 2022. Cost of

interest-bearing liabilities increased to ~~3.03%~~3.18% for the ~~second half~~first nine months of 2023 from ~~0.53%~~0.70% for the ~~second half~~same period of 2022, while cost of funds were ~~2.30%~~2.44% and ~~0.36%~~0.48% for the same respective periods. Higher cost of funds in the 2023 period was primarily due to higher market interest rates and a shift in the mix of average ~~interest-bearing~~ liabilities, including higher cost wholesale ~~funding sources.~~funding. Interest expense in the first ~~halves~~nine months of 2023 and 2022 included the amortization of fair value adjustments (premium) on assumed time deposits of ~~$506~~$666 thousand and ~~$840 thousand,~~$1.2 million, respectively, which was a reduction to interest expense.

Net interest income (on a taxable equivalent basis) ~~was $47.8 million~~ for ~~both~~ the ~~six~~nine months ended ~~June~~September 30, 2023 ~~and~~was $71.4 million as compared to $76.5 for the same period in 2022. Net interest margin was 3.12% and ~~3.88%~~4.02% for the ~~second halves of~~nine months ended September 30, 2023 and 2022, respectively. ~~The reversal of interest income previously noted had an approximate negative 31 basis point impact on net interest margin for the first half of 2023.~~ Accretion and amortization of purchase accounting adjustments had a 11 basis point and 4132 basis point positive effect on net interest margin for the same respective periods.

Provision for Credit Losses. The Company recorded a provision for credit losses of ~~$20.5~~$11.1 million in the ~~second~~third quarter of 2023 compared to ~~$7.5~~$3.9 million in the ~~second~~third quarter of 2022. Provision for credit losses for the first ~~halves~~nine months of 2023 and 2022 was ~~$24.2~~$19.6 million and ~~$10.0~~$13.9 million, respectively. Provision for credit losses in the 2023 periods were primarily attributable to specific reserves on the previously noted group of specialty finance loans, ~~and net loan charge-offs,~~ partially offset by a credit to provision for credit losses on unfunded commitments.

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

Lower noninterest income in the ~~first half~~third quarter of 2023 compared to the same period of 2022 was primarily attributable to a lower gain on sale of guaranteed government loans, partially offset by higher residential mortgage banking income, including mortgage servicing rights (“~~MSR”~~MSRs”)~~, which was driven by lower mortgage volumes~~ and an increase in the 2023 period ($107.0 million) compared to the 2022 period ($269.2 million). The change in the fair value of MSR assets was a negative $1.4 million and a positive $3.5 million for the first halves of 2023 and 2022, respectively. Also contributingnoninterest income from other investments.

Contributing to the decline in the ~~six~~nine month period ended ~~June~~September 30, 2023 compared to the 2022 period was higher income from fair value adjustments of other equity investments in the 2022 period attributable to the Company's equity investments, primarily in certain fintech companies. The Company records certain equity investments

at fair value when an observable market event occurs, such as the issuance or transfer of shares of substantially similar ~~investments.~~

investments. Also contributing to the decline was lower residential mortgage banking income primarily due to a significant decline in mortgage production and sales in the 2023 period ($149.5 million) compared to the 2022 period ($352.2 million).

Noninterest Expense. The following tables present a summary of noninterest expense and the dollar and percentage change for the periods stated.

Excluding the $26.8 million goodwill impairment charge, the $6.0 million reserve for a proposed settlement of the VCB ESOP litigation, and regulatory remediation, ~~and merger-related expenses,~~ noninterest expense increased ~~$6.3~~$2.7 million (or 11.2%) and ~~$11.4~~$14.8 million (20.3%) for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to the same periods of 2022. ~~Lower salaries and employees in both comparative periods were due to lower headcount in the Company's mortgage division.~~ Regulatory remediation expenses include consulting, legal, and other costs incurred as part of the Company's efforts to remediate the findings in the Written Agreement. Higher other contractual services expense in the 2023 periods was primarily due to outsourced BSA/AML compliance services as the Bank continues to augment its compliance staff, while higher legal expense was primarily attributable to corporate, employee benefit plans, and other employment matters. Included in legal expense is $3.2 million incurred during 2023 in defense of the VCB ESOP litigation. Higher FDIC insurance expense relative to the prior periods was primarily due to balance sheet growth and other factors such as lower profitability and regulatory capital levels, which increase the assessment rate. ~~Included in other noninterest expense for the first six months of 2023 was a $0.9 million charge related to the sale of PPP loans in the second quarter of 2021.~~

Income Tax (Benefit) Expense. Income tax benefit from continuing operations for the three months ended ~~June~~September 30, 2023 was ~~$5.0~~$4.7 million compared to income tax expense of ~~$0.3~~$801 thousand for the same period of 2022, resulting in an effective income tax rate of 10.2% and 22.6% for the same respective periods. Income tax benefit from continuing operations for the nine months ended September 30, 2023 was $5.3 million compared to income tax expense of $6.3 million for the same period of 2022, resulting in an effective income tax rate of 20.3% and 23.4% for the same respective periods. Income tax benefit from continuing operations for the six months ended June 30, 2023 was $4.5 million compared to income tax expense of $5.5 million for the same period of 2022, resulting in an effective income tax rate of 20.0%10.4% and 22.8% for the same respective periods.

The lower effective tax rates in the 2023 periods was primarily attributable to the goodwill impairment charge of $26.8 million, which has no tax effect, thus resulting in a lower income tax benefit.

All loan portfolio and ACL information presented as of and for the three and ~~six~~nine months ended ~~June~~September 30, 2023 is in accordance with ASC 326. All loan information presented prior to this period is presented in accordance with previously applicable GAAP. As a result, the presentation of information pre-ASC 326 and post-ASC 326 adoption will not be comparable for most disclosures.

Loan Portfolio. The Company makes loans to commercial entities and to individuals. Loan terms vary as to interest rate, repayment, and collateral requirements based on the type of loan and the creditworthiness of the borrower. Credit risk tends to be geographically concentrated in that a majority of the loans are to borrowers located in the markets served by the Company; however, the loans contributing to the increase in nonperforming assets and the ACL in the first ~~six~~nine months of 2023 were primarily to borrowers outside of the Company's primary geographic footprint. All loans are underwritten within specific lending policy guidelines that are designed to maximize the Company’s profitability within an acceptable level of business risk.

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

The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of ~~June~~September 30, 2023.

Allowance for Credit Losses. Management makes estimates based on facts available at the time the ACL is determined. Such estimation requires significant judgment at the time made. Management believes that the Company’s ACL was adequate as of ~~June~~September 30, 2023 and December 31, 2022. There can be no assurance, however, that adjustments to the ACL will not be required in the future. Changes in the economic assumptions underlying management’s estimates and judgments; adverse developments in the economy, on a national basis or in the Company’s market area; and changes in the circumstances of particular borrowers are criteria, among others, that could increase the level of the ACL required, resulting in charges to the provision for credit losses for loans. In addition, bank regulatory agencies periodically review the Bank's ACL and may require anthe Bank to increase in the ~~provision for credit losses~~ACL or the recognition of ~~further~~ loan charge-offs, based on judgments different than those of management.

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

Of the $9.0 million and $10.3 million in gross loan charge-offs for the three and six months ended June 30, 2023, respectively, $7.0 million was attributable to one commercial and industrial loan that was fully charged-off in the second quarter of 2023.

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

The information in the table above excludes PPP loans, which carry no ACL as they are fully guaranteed by the U.S. government.

Nonperforming Assets. Nonperforming assets consist of nonaccrual loans, loans past due 90 days and still accruing interest, and other real estate owned (“OREO”).

OREO includes properties that have been substantively repossessed or acquired in complete or partial satisfaction of a loan. Such properties, which are held for resale, are carried at the lower of cost or fair market value, including a reduction for the estimated selling expenses.

The following table presents summary information pertaining to nonperforming assets and certain asset quality ratios as of the dates stated.

The increase in nonperforming loans at June 30, 2023 compared to December 31, 2022 was primarily due to $58.1 million of specialty finance loans (classified in commercial and industrial loans) that were placed on nonaccrual status in the second quarter of 2023. The increase in the ratio of ACL to total loans held for investment, excluding PPP loans, at ~~June~~September 30, 2023 compared to December 31, 2022 was primarily attributable to ~~$14.1 million of~~ specific reserves associated with the aforementioned group of specialty finance loans, while ~~$4.0~~$7.4 million was due to the adoption of ASC 326 on January 1, 2023. The ACL as of September 30, 2023 includes $21.8 million of specific reserves on $48.2 million of specialty finance loans. The remaining purchase accounting adjustments (discounts) related to loans acquired in the Bay Banks of Virginia, Inc. merger in 2021 and earlier acquisitions by the Company were ~~$6.4~~$5.8 million and $7.9 million at ~~June~~September 30, 2023 and December 31, 2022, respectively.

Over the last several quarters, the Company tightened its credit risk management practices, including, but not limited to, 1) restructuring the composition of its management loan committee to include greater credit personnel participation, 2) reducing lending approval limits, and 3) reducing lending commitments on borrower relationships.

Modified Loans. The Company granted certain loan modifications to borrowers experiencing financial difficulties during the ~~six~~nine months ended ~~June~~September 30, 2023. The total amortized cost of these modified loans was ~~$46.9~~$51.0 million, or ~~1.91%~~2.08% of gross loans held for investment, as of ~~June~~September 30, 2023, ~~all~~ of which $48.1 million were on nonaccrual status as of the same date.

Investment Securities. The investment portfolio is used as a source of interest income, credit risk diversification, and liquidity, as well as to manage rate sensitivity and provide collateral for ~~short-term~~ borrowings. Securities in the investment portfolio classified as securities AFS may be sold in response to changes in market interest rates, changes in the securities’ prepayment risk, increased loan demand, general liquidity needs, and other similar factors, and are carried at estimated fair value. The fair value of the Company’s AFS investment securities was ~~$340.6~~$313.9 million as of ~~June~~September 30, 2023, a decrease from $354.3 million at December 31, 2022, primarily due to decline in fair market value and the amortization of securities. As a result of ~~a modest~~an increase in market longer-term interest rates in the first ~~six~~nine months of 2023, the Company’s portfolio of AFS securities had an unrealized loss of approximately ~~$1.5~~$11.2 million in the same period.

As of ~~June~~September 30, 2023 and December 31, 2022, the majority of the investment securities portfolio consisted of securities rated as investment grade by a leading rating agency. Investment grade securities are judged to have a low risk of default. At ~~June~~September 30, 2023 and December 31, 2022, securities with a fair value of ~~$178.8~~$25.0 million and $241.9 million, respectively, were pledged to secure the Bank’s borrowing facility with the FHLB. As of ~~June~~September 30, 2023, the Company pledged securities with ~~$108.7~~$267.0 million of par value (amortized cost and fair value of ~~$109.6~~$269.0 million and ~~$90.0~~$216.0 million, respectively) as collateral for the Bank Term Funding Program (“BTFP”), established by the Board of Governors of the Federal Reserve System. The Company also pledged securities with a fair value of ~~$11.6~~$11.2 million (amortized cost of $13.4 million) as of ~~June~~September 30, 2023 for access to the FRB Discount Window.

The Company reviews its AFS investment securities portfolio for potential credit losses no less than quarterly. AFS investment securities with unrealized losses are generally a result of pricing changes due to changes in the current interest rate environment and not as a result of permanent credit impairment. The Company does not intend to sell, nor

does it believe that it will be required to sell, any of its temporarily impaired AFS securities prior to the recovery of the amortized cost. No ACL has been recognized for AFS securities as of ~~June~~September 30, 2023.

Restricted equity investments consisted of stock in the FHLB (carrying basis ~~$10.9~~$9.4 million and $14.7 million at ~~June~~September 30, 2023 and December 31, 2022, respectively), stock in the FRB (carrying basis of $6.1 million at both ~~June~~September 30, 2023 and December 31, 2022, respectively), and stock in the Company’s correspondent bank (carrying basis of $468 thousand at both ~~June~~September 30, 2023 and December 31, 2022). Restricted equity investments are carried at cost. The Company holds various other equity investments, including shares in other financial institutions and fintech companies, totaling ~~$22.7~~$22.1 million and $23.8 million as of ~~June~~September 30, 2023 and December 31, 2022, respectively, which are carried at fair value with any gain or loss reported in the consolidated statements of operations each reporting period.

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

Deposits. The principal sources of funds for the Company are core deposits (demand deposits, interest-bearing transaction accounts, money market accounts, savings deposits, and certificates of deposit), primarily from its geographic market area. The Company’s deposit base includes transaction accounts, time and savings accounts, and other accounts that customers use for cash management purposes and which provide a source of fee income and cross-marketing opportunities as well as a source of funds. Time and savings accounts, including money market deposit accounts, also provide a relatively stable source of funding.

Total deposits as of ~~June~~September 30, 2023 were ~~$2.61~~$2.78 billion, an increase of ~~$110.6~~$273.6 million from December 31, 2022, of which ~~$220.1~~$409.5 million was due to higher time deposits, primarily brokered time ~~deposits.~~deposits, which increased $364.2 million in 2023. The Company's relationships with fintech partners have resulted in approximately ~~$707.6~~$720.8 million of deposits as of ~~June~~September 30, 2023, up from $690.2 million as of December 31, 2022. Estimated uninsured deposits totaled approximately ~~$865.7~~$864.8 million as of ~~June~~September 30, 2023, or ~~33%~~31% of total deposits, compared to ~~$1.01~~$1.14 billion, or ~~40%~~46% of total deposits, as of December 31, 2022. Excluding fintech-related deposits, estimated uninsured deposits were ~~26%~~28% and 31% of total deposits as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

Approximately ~~22.0%~~20.6% of total deposits as of ~~June~~September 30, 2023 were composed of noninterest-bearing demand deposits compared to 25.6% as of December 31, 2022. In contrast, approximately ~~23.4%~~26.2% of total deposits as of ~~June~~September 30, 2023 were composed of time deposits compared to 15.6% as of December 31, 2022, which was primarily due to the addition of brokered time deposits in ~~late~~the first ~~quarter~~and third quarters of 2023 in response to ~~then recent~~ industry ~~events.~~events in

March 2023. Brokered time deposits represented approximately ~~10.7%~~14.8% and ~~1.7%~~1.97% of total deposits as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

Deposits, excluding brokered deposits and fintech-related deposits, declined $121.2 million in the nine months ended September 30, 2023; however, deposits grew 0.06% (annual rate of 2.40%) in the third quarter of 2023.

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

Borrowings. The following tables present information on the balances and interest rates on borrowings as of and for the periods stated.

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

Subordinated notes, net, totaled $39.9 million as of both ~~June~~September 30, 2023 and December 31, 2022.

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

The Company has established a formal liquidity contingency plan that provides guidelines for liquidity management. Pursuant to the Company’s liquidity management program, it first determines its current liquidity position and then forecasts liquidity based on anticipated changes in the balance sheet. In this forecast, the Company expects to maintain a liquidity cushion. Management then stress tests the Company’s liquidity position under several different stress scenarios, from moderate to severe. Guidelines for the forecasted liquidity cushion and for liquidity cushions for each stress scenario have been established. Management also monitors the Company’s liquidity position through cash flow forecasting and believes its level of liquidity is adequate to conduct the business of the Company.

Deposits are the primary source of the Company’s liquidity. Cash flow from amortizing assets or maturing assets provides funding to meet the needs of depositors and borrowers. The Bank had unsecured federal fund lines available with correspondent banks for overnight borrowing totaling $25.0 million and $28.0 million as of ~~June~~September 30, 2023 and December 31, ~~2022.~~2022, respectively. These lines bear interest at the prevailing rates for such loan and are ~~cancellable~~cancelable any time by the correspondent bank. As of ~~June~~September 30, 2023 and December 31, 2022, none of these lines of credit with correspondent banks were drawn upon.

In addition to deposits and federal funds lines, the Company has access to various wholesale funding markets. These markets include the brokered certificate of deposit market, listing service deposit market, and the federal funds market. The Company is a member of the IntraFi Network (formerly, Promontory Interfinancial Network), which allows banking customers to access Federal Deposit Insurance Corporation (the “FDIC”) insurance protection through the Bank on deposits that exceed FDIC insurance limits. The Company also has one-way authority with the IntraFi Network for both Certificate of Deposit Account Registry Service and Insured Cash Sweep products, which provides the Company the ability to access additional wholesale funding as needed.

The Company maintains secured lines of credit with the FHLB under which the Company can borrow up to the allowable amount for the collateral pledged. As of ~~June~~September 30, 2023, the Company had a credit line available of ~~$572.7~~$532.7 million with the FHLB with outstanding advances totaling ~~$219.1~~$150.0 million and letters of credit totaling ~~$67.6~~$100.1 million, leaving the remaining credit availability of ~~$286.0~~$282.6 million as of the same date. The letters of credit are for the benefit of the Treasury Board of the Commonwealth of Virginia to secure public deposits.

The BTFP provides banks with additional liquidity via a secured line of credit collateralized by eligible pledged securities. Available credit is equal to the current par value of the pledged securities. Advances under the BTFP are up to a one-year term and are priced at the one-year overnight index swap rate plus 10 basis points, which is fixed for the term on the advance date. Advances can be repaid at any time without penalty. The Company had an available line of credit through the BTFP of ~~$100.5~~$267.0 million as of ~~June~~September 30, 2023, of which the Company had drawn one advance for $65.0 million, maturing May 10, 2024, with a fixed interest rate of 4.74%, leaving the remaining credit availability of ~~$35.5~~$202.0 million as of the same date.

The Company maintains access to the FRB Discount Window, under which the Company can borrow up to the allowable amount for the securities pledged as collateral. As of ~~June~~September 30, 2023, availability under the FRB Discount Window was $11.1 million. The Company had no outstanding borrowings through the FRB Discount Window as of ~~June~~September 30, 2023 or December 31, ~~2022.~~2022,.

The Company utilized the FRB Paycheck Protection Program Liquidity Facility to partially fund PPP loans, which collateralize the advances. As of ~~June~~September 30, 2023 and December 31, 2022, FRB borrowings under this facility totaled $0 and $51 thousand, respectively.

Subsequent to the financial industry events in early March 2023, the Company has undertaken efforts to increase its borrowing capacity by pledging additional eligible collateral with the FHLB, adding borrowing capacity by participating in the BTFP, and more actively sourcing brokered deposits to enhance its liquidity position. The Company has increased its secured borrowing capacity by $552.2 million from $525.1 million at December 31, 2022 to $1.08 billion at September 30, 2023. The Company also added a treasury management resource to provide additional oversight to the Company's liquidity position.

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

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

banks (the “Basel III rules”), the Bank must hold a capital conservation buffer of 2.50% above the adequately capitalized risk-based capital ratios for all ratios, except the tier 1 leverage ratio. If a banking organization dips into its capital conservation buffer, it is subject to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers. The ~~Banks's~~Bank's primary regulators may place certain restrictions on dividends paid by the Bank. The total amount of dividends which may be paid at any date is generally limited to retained earnings of the Bank.

As of ~~June~~September 30, 2023 and December 31, 2022, the Bank met the capital requirements to be classified as well ~~capitalized.~~capitalized; however, the Bank's total risk based capital dropped below the capital conservation buffer as of September 30, 2023, subjecting the Bank to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers. There have been no conditions or events since these dates that management believes have changed the institution's categorization.

If the Bank were fail to meet the capital adequacy guidelines for a “well-capitalized” bank, it could be required to pay higher insurance premiums to the FDIC or subject to increased regulatory scrutiny. In addition, the Bank would not be able to renew or accept brokered deposits without prior regulatory approval and would be subject to interest rate restrictions on its deposit accounts.

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. The three-year phase-in of the CECL Transitional Amount to regulatory capital will be 25%, 50%, and 25% in 2023, 2024, and 2025, respectively. The Bank made this irrevocable election effective with its first quarter 2023 call report.

The following tables present the Company's capital ~~and capital ratios to which the Bank is subject and the amounts and ratios to be adequately and well capitalized~~position as of the dates stated. Adequately capitalized ratios include the conversation buffer, if applicable. The CECL Transitional Amount was $5.5 million, of which $1.4 million reduced the regulatory capital amounts and capital ratios as of June 30, 2023.

In addition to the foregoing capital requirements, the OCC has notified the Bank of its decision to establish IMCR for the Bank that are higher than those required for capital adequacy purposes generally. Specifically, the Bank is required to maintain a leverage ratio of 10.00% and a total capital ratio of 13.00%. As of September 30, 2023, the Bank did not meet these IMCR requirements,which could subject the Bank to additional regulatory requirements or directives, including developing and maintaining capital plans, asset sales, limitations on growth, further regulatory sanctions and/or other regulatory enforcement actions. In light of these enhanced requirements, the Company is exploring options for raising additional capital, which could be substantially dilutive to current shareholders.

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. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis, in a manner similar to that if underwriting a loan. The approved commitments to extend credit that were available but unused as of ~~June~~September 30, 2023 and December 31, 2022 totaled ~~$679.1~~$590.1 million and $736.1 million, respectively.

credit totaled ~~$29.5~~$23.3 million and ~~$28.3~~$29.8 million, respectively. The credit risk of issuing stand-by letters of credit can be greater than the risk involved in extending loans to customers.

Upon the adoption of ASC 326 on January 1, 2023, the Company recorded an increase to its reserve for unfunded commitments of $3.7 million. For the ~~six~~nine months ended ~~June~~September 30, 2023, the Company recorded a reduction to the provision for credit losses for unfunded commitments of ~~$1.0~~$1.6 million, which was primarily attributable to lower balances of loan commitments. As of ~~June~~September 30, 2023, the reserve for unfunded commitments was ~~$4.5~~$4.0 million compared to $1.8 million as of December 31, 2022.

The Company invests in various partnerships, limited liability companies, and small business investment company funds. Pursuant to these investments, the Company commits to an investment amount that may be fulfilled in future periods. At ~~June~~September 30, 2023, the Company had future commitments outstanding totaling ~~$17.9~~$16.6 million related to these investments.

As a financial institution, the Company is exposed to various business risks, including interest rate risk. Interest rate risk is the risk to earnings and value arising from volatility in market interest rates. Interest rate risk arises from timing differences in the repricing and maturities of interest-earning assets and interest-bearing liabilities, changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers' ability to prepay loans

and depositors' ability to redeem certificates of deposit before maturity, changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion, and changes in spread relationships between different yield curves, such as U.S. Treasuries and other market-based index rates. The Company’s goal is to maximize net interest income without incurring excessive interest rate risk. Management of net interest income and interest rate risk must be consistent with the level of capital and liquidity that the Bank maintains. The Company manages interest rate risk through an asset and liability committee comprised of members of its board of directors and management (the “ALCO”). The ALCO is responsible for monitoring the Company’s interest rate risk in conjunction with liquidity and capital management.

The Company employs an independent consulting firm to model its interest rate sensitivity that uses a net interest income simulation model as its primary tool to measure interest rate sensitivity. Assumptions for modeling are developed based on expected activity in the balance sheet. For maturing assets, assumptions are created for the redeployment of these assets. For maturing liabilities, assumptions are developed for the replacement of these funding sources. Assumptions are also developed for assets and liabilities that could reprice during the modeled time period. These assumptions also cover how management expects interest rates to change on non-maturity deposits such as interest checking, money market checking, savings accounts, as well as certificates of deposit. Based on inputs that include the current balance sheet, the current level of interest rates, and the developed assumptions, the model produces an expected level of net interest income assuming that market rates remain unchanged. This is considered the base case. The model then simulates the impact on net interest income based on specific changes in interest rates. The rate simulations are performed for a two-year period and include rapid rate changes of down 100 basis points to ~~300~~400 basis points and up 100 basis points to ~~300~~400 basis points. The results of these simulations are then compared to the base case.

The following table presents the estimated change in net interest income under various rate change scenarios. The scenarios assume rate changes occur instantaneous and in a parallel manner, which means the changes are the same on all points of the rate curve.

The severity of the effect of instantaneous increases in interest rates as shown above is due to the timing of pricing change in the Company's interest-bearing liabilities compared to its interest-earning assets. ~~A significant portion~~As of September 30, 2023, approximately 70% of the Company's deposits through its fintech partnerships reprice with changes in federal funds rates. Therefore, an instantaneous change in this index rate results in a relative change in deposit costs. The Company contracts with its fintech partners and continually assesses the cost of these fintech-related deposits relative to sources of fees and other noninterest income earned from these partnerships.

Stress testing the balance sheet and net interest income using instantaneous parallel shock movements in the yield curve ~~of 100 to 300 basis points~~ is a regulatory and banking industry practice. However, these stress tests may not represent a realistic forecast of future interest rate movements in the yield curve. In addition, instantaneous parallel interest rate shock modeling is not a predictor of actual future performance of earnings. It is a financial metric used to manage interest rate risk and track the movement of the Company’s interest rate risk position over a historical time frame for comparison purposes.

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

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

The Company maintains disclosure controls and procedures that are designed to provide assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods required by the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of ~~June~~September 30, 2023 was carried out under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer. Based on and as of the date of such evaluation, the aforementioned officers concluded that the Company’s disclosure controls and procedures were ~~effective.~~effective, except as discussed below.

As previously disclosed in the Explanatory Note to the Consolidated Financial Statements included in the 2022 Form 10-K/A, the Company evaluated the effect of the facts leading to the restatement. Management concluded that a material weakness existed in the timely risk grading and placing of loans on nonaccrual status and, thus, in the determination of the adequacy of the allowance for credit losses for the specialty finance loans. It was further determined that such material weakness did not exist in the remainder of the loan portfolio.

Management, with oversight from the Audit Committee of the Company's Board of Directors, is currently remediating the foregoing material weakness and has taken the following steps in the third quarter of 2023:

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

~~There have been no material developments in the status of the~~For information regarding legal proceedings ~~previously disclosed~~ in ~~Part I, Item 3 of~~which the ~~Company’s 2022~~Company is involved, please see Note 16 to the unaudited consolidated financial statements included in this Form ~~10-K.~~10-Q.

In the ordinary course of its operations, the Company is a party to various legal proceedings. As of the date of this report, there are no pending or threatened proceedings against the Company, other than ~~previously~~as disclosed ~~as stated~~ in the preceding paragraph, that, if determined adversely, would have a material effect on the business, results of operations or financial position of the Company.

Other than as set forth below, there have been no material changes to the risk factors disclosed in the 2022 Form ~~10-K.~~10-K/A. The following risk factors supplement, and should be read together with, the risk factors disclosed in the 2022 Form ~~10-K.~~10-K/A. Additional risks not presently known to the Company, or that it currently deems immaterial, may also adversely affect the Company's business, financial condition, or results of operations. See also “Cautionary Note About Forward-Looking Statements,” included in Part 1, Item 2, of this Form 10-Q.

The Company’s liquidity needs could adversely affect results of operations and financial condition.

The Company’s primary sources of funds are deposits and loan repayments. While scheduled loan repayments are a relatively stable source of funds, they are subject to the ability of borrowers to repay the loans. The ability of borrowers to repay loans can be adversely affected by a number of factors, including, but not limited to, changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, availability of, and/or access to, sources of refinancing, business closings or lay-offs, pandemics or endemics, inclement weather, natural disasters and geopolitical uncertainty.

Additionally, deposit levels 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. Much of the Company’s recent deposit growth has been concentrated in its fintech relationships, which can be relatively high-cost and rate-sensitive, and which account for approximately $720.8 million, or 26.0%, of the Company’s deposits as of September 30, 2023. 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. Either of these factors could reduce the Company’s net interest margin and net interest income and could have an adverse effect on the Company’s business, financial condition, results of operations and cash flows from operations.

Further, 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. Such sources include Federal Home Loan Bank of Atlanta (“FHLB”) advances, sales of securities and loans, and federal funds lines of credit from correspondent banks, as well as additional out-of-market time deposits and brokered deposits. While the Company believes that these sources are currently adequate, there can be no assurance they will be sufficient to meet future liquidity demands, particularly if the Company experiences increasing loan demand or is unable to maintain its deposit base, including fintech deposits. Further, there can be no assurance that these arrangements will be available to the Company when needed, on favorable terms, or at all, or that they will be sufficient to meet future liquidity needs. For example, the Company’s ability to access borrowings from the FHLB will be dependent upon whether and the extent to which the Company can provide collateral to secure FHLB borrowings, and the Company’s use of brokered deposits may be limited or discouraged by our banking regulators. The Company may be required, among other things, to slow or discontinue loan growth, capital expenditures or other investments, or liquidate assets. If the Company is unable to access funding sufficient to support its business operations or is unable to access such funding on attractive terms, it may not be able to satisfy its obligations.

In light of the IMCR requirements discussed below, the Company is exploring options for raising additional capital. Access to sufficient capital is critical in order to enable the Company to implement its business plan, support its business, expand its operations, and meet applicable capital requirements. The inability to have sufficient capital,

whether internally generated through earnings or raised in the capital markets, could adversely impact the Company’s ability to support and to grow its operations. Further, if the Company grows its operations faster than it generates capital internally, it will need to access the capital markets. The Company’s ability to raise additional capital will depend on, among other things, conditions in the capital markets, market perceptions of the banking industry generally and the Company in particular, and the Company’s financial condition and results of operations. Economic conditions and a loss of confidence in financial institutions may increase the Company’s cost of capital and limit access to some sources of capital. An inability to raise additional capital on acceptable terms when needed could have a material adverse impact on the Company’s business, financial condition, and capital ratios.

Future issuances of the Company’s securities could adversely affect the market price of the common stock and could be dilutive.

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 the Company’s shareholders. Any sale of additional shares of the Company’s common stock may be at prices lower than the current market value of the Company’s shares. In addition, new investors may have rights, preferences, and privileges that are senior to, and that could adversely affect, the Company’s existing shareholders. For example, preferred stock would be senior to common stock in right of dividends and as to distributions in liquidation. The Company’s shareholders bear the risk of future offerings diluting their stock holdings, adversely affecting their rights as shareholders, and/or reducing the market price of the Company’s common stock.

Regulatory capital standards require the Company and the Bank to maintain higher levels of capital, which could adversely affect the Company’s profitability and return on equity.

The Company is subject to capital adequacy guidelines and other regulatory requirements specifying minimum amounts and types of capital that the Company and the Bank must maintain. From time to time, regulators implement changes to these regulatory capital adequacy guidelines. If the Company or the Bank fails to meet these minimum capital guidelines and/or other regulatory requirements, its financial condition would be materially and adversely affected. The Basel III Capital Rules require bank holding companies and their subsidiaries to maintain significantly more capital as a result of higher required capital levels and more demanding regulatory capital risk weightings and calculations. The Bank must also comply with the capital requirements set forth in the “prompt corrective action” regulations pursuant to Section 38 of the FDI Act.

In addition to the foregoing capital requirements, the OCC has notified the Bank of IMCR requirements for the Bank that are higher than those required for capital adequacy purposes generally. Specifically, the Bank is required to maintain a leverage ratio of 10.00% and a total capital ratio of 13.00%. As of September 30, 2023, the Bank did not meet these IMCR requirements, which could subject the Bank to additional regulatory requirements or directives, including developing and maintaining capital plans, asset sales, limitations on growth, further regulatory sanctions and/or other regulatory enforcement actions.

Satisfying these capital and IMCR requirements also may require the Bank to limit its banking operations and/or require the Company to raise additional capital to improve regulatory capital levels, which could negatively affect the business, financial condition, and results of operations of the Company.

The Company and the Bank are subject to regulatory restrictions which limit their ability to pay dividends.

The Company’s ability to make dividend payments on its common stock depends primarily on certain regulatory considerations and the receipt of dividends and other distributions from the Bank. In consideration of the IMCR requirements discussed above, the Company and the Bank plan to preserve capital and, in October 2023, the Company’s board of directors suspended payment of dividends on the Company’s common stock until further notice. As a result, the Company likely will not resume payments of dividends in the foreseeable future.

~~Over the first six months~~As of September 30, 2023, the Company’s nonperforming loans have increased from $18.6 million, or 0.77% of total loans held for investment, excluding PPP loans, at December 31, 2022 to $85.8 million, or 3.50% of total loans held for investment, excluding PPP loans, at June 30, 2023. This increase was primarily due toinclude a group of specialty finance loans totaling ~~$58.1~~$48.2 million as of ~~June~~September 30, ~~2023 that were placed on nonaccrual status during the second quarter of~~ 2023. The Company’s ACL as of ~~June~~September 30, 2023 includes ~~$14.1~~$21.8 million of specific reserves for this group of loans. While management believes that the ACL was adequate as of ~~June~~September 30, 2023 and that the credit deterioration of this group of loans is an isolated event within the ~~Company's~~Company’s loan portfolio, there can be no assurance that the Company will not experience further deterioration within this group of loans or other

These specialty finance loans are of higher risk than other types of loans originated by the ~~Bank,~~Company, due to the nature of the collateral, and as such, the ~~Company's~~Company’s ability to pursue collections could be delayed or protracted. Any of these factors could cause the Company to incur charge-offs to the ACL, lost interest income relating to these loans, and additional increases in the ~~loan~~credit loss reserves, any of which may have a material adverse effect on earnings, liquidity, and capital.

The Bank’s formal Written Agreement with the OCC has required, and in the future will require, the Bank to devote significant resources to enhance its fintech policies, procedures, and operations, and the failure to comply with any provision of the agreement may cause the OCC to take further action against it.

On August 29, 2022, the Bank entered into the Written Agreement with the OCC. The Written Agreement requires the Bank to, among other things, enhance oversight of its third-party fintech partnerships, improve its control framework related to BSA compliance and anti-money laundering and adopt, implement, and adhere to revised and expanded risk-based policies, procedures, and processes. While subject to the Written Agreement, the Bank will also be required to obtain an OCC non-objection prior to onboarding or signing a contract with a new third-party fintech partner or offering new products or services or conducting new activities with or through existing third-party fintech partners.

The Company’s management and boards of directors have devoted, and expect to continue to devote considerable time, attention, and resources on developing, implementing, and monitoring corrective actions to comply with the terms of the Written Agreement that otherwise would be directed to its business and operations. Any such distraction on the part of the Company’s management could affect the Company’s ability to service existing business and pursue its strategic objectives and may adversely affect the business and earnings of the Company. The Company is also utilizing third-party consultants and other advisors to assist in complying with the Written Agreement, and noninterest expense has increased, and may continue to increase, as a result.

While the Company is actively working to bring the Bank’s fintech policies, procedures, and operations into conformity with OCC directives, many aspects of the Written Agreement require considerable time for completion, implementation, validation, and sustainability, and weaknesses in the Bank’s BSA compliance program remain, which could subject the Bank to additional compliance costs and further regulatory enforcement actions, including civil monetary penalties and the imposition of material restrictions on the activities of the Bank. Moreover, failure to implement and maintain an effective BSA compliance program could have reputational consequences for the Company, prevent the Company from executing its business strategy, and negatively impact its business and the price of the Company’s common stock. Any of these results could have a material adverse effect on the Company's business, financial condition and results of operations.

If the Company does not comply with the Written Agreement, or the OCC imposes additional measures, the Company could be subject to additional regulatory requirements or directives, including developing and maintaining capital plans, asset sales, loan reserves or impairments, limitations on growth, further regulatory sanctions and/or other regulatory enforcement actions.

The Company’s fintech line of business could subject it to increased operational, compliance, and other risks that could adversely affect the Company’s business, financial condition, and results of operations.

The Company’s business strategy over the past several years has included growing partnerships with fintech companies, which serve as a source of loan and deposit growth, fee income, and technology-related solutions for the Company. These fintech and banking-as-a-service ("BaaS") partnerships have resulted, among other things, in rapid growth in the Company’s deposit base. As of September 30, 2023 and December 31, 2022, fintech-related deposits accounted for $720.8 million and $690.2 million, respectively, of the Company's deposits. Of this, BaaS deposits of $537.2 million and $524.1 million were related to approximately 250,000 and 185,000 accounts of active end users as of September 30, 2023 and December 31, 2022, respectively. This rapid increase in deposit accounts necessitates enhanced operational and control systems and additional qualified personnel and to oversee and manage the increased operational and compliance burdens from these accounts, including those resulting from increased account opening, suspicious activity monitoring, network security controls related to ACH and payment systems, protection of customer records and data confidentiality, and consumer compliance matters, among others. If the Company is not able to control the growth of new fintech deposits or implement and maintain improved systems to monitor and control these additional burdens, the Company could be subject to additional supervisory actions, operational and compliance risks, and reputational harm, and could experience material adverse consequences on its business, financial condition, and results of operations.

In consideration of the risk profile of the fintech line of business and the Written Agreement, the Company is in the process of winding down certain of its current fintech and BaaS partnerships. Termination of these relationships could cause the Company’s noninterest income and deposits to decrease, which could have an adverse effect on the Company’s liquidity, earnings, and capital. See “The Company’s liquidity needs could adversely affect results of operations and financial condition.”

In certain cases, the Company also has made and may continue to make investments in these third-party fintech companies, which may be unseasoned, unprofitable, or have limited established operating histories or earnings and may be more vulnerable to financial failure. Any failure to successfully manage these partnerships, or the failure of these fintech companies to perform, could subject the Company to a loss of its investment or other adverse effects on the Company’s business prospects, future financial condition, and results of operations.

The soundness of other financial institutions could adversely affect the Company.

The Company’s ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. The Company has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial industry. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by the Company or by other institutions. Many of these transactions expose the Company to credit risk in the event of default of its counterparty or client. In addition, credit risk may be exacerbated when the collateral held cannot be realized upon or is liquidated at prices insufficient to recover the full amount of the financial instrument exposure due. There is no assurance that any such losses would not materially and adversely affect results of operations.

In addition, financial challenges at other banking institutions could lead to depositor concerns that spread within the banking industry. In March 2023, Silicon Valley Bank and Signature Bank experienced large deposit outflows coupled with insufficient liquidity to meet withdrawal demands, resulting in the institutions being placed into FDIC receiverships. In the aftermath, there was substantial market disruption and concern that diminished depositor confidence could spread across the banking industry, leading to deposit outflows that could destabilize other institutions. 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.

Changes in economic conditions, especially in the areas in which the Company conducts operations, could materially and negatively affect its business.

The Company’s business is directly impacted by economic conditions, legislative and regulatory changes, changes in government monetary and fiscal policies, and inflation, all of which are beyond its control. Although the domestic and global economies have largely recovered from the COVID-19 pandemic, certain consequences of the pandemic continue to impact the macroeconomic environment and may persist for some time. For example, the COVID-19 pandemic could have long-lasting impacts on certain industries due to changes in consumer behavior and business practices, including remote work and business travel. Further, 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, and the risk of recession. A deterioration in economic conditions, whether caused by global, national, or local concerns, especially within the Company’s market area, could result in, among other consequences, an increase in loan delinquencies, problem assets and foreclosures, a decline in demand for the Company’s products and services, a decrease in low cost or non-interest bearing deposits, and/or a deterioration in the value of collateral for loans, especially real estate loans, any of which could result in losses that materially and adversely affect the Company’s business.

The Company is directly and indirectly affected by changes in market conditions. Market risk generally represents the risk that values of assets and liabilities or revenues will be adversely affected by changes in market conditions. As a financial institution, market risk is inherent in the financial instruments associated with the Company’s operations and activities, including loans, deposits, securities, short-term borrowings, long-term debt, and trading account assets and liabilities. A few of the market conditions that may shift from time to time, thereby exposing the Company to market risk, include fluctuations in interest rates, equity and futures prices, and price deterioration or changes in value due to

changes in market perception or actual credit quality of issuers. Any 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 other-than-temporary impairment of the securities in the investment securities portfolio, which could adversely affect the Company’s financial condition, capital ratios, and results of operations.

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. For example, the Company carries its available for sale securities portfolio at estimated fair market value. As a result of rising interest rates during 2022 and 2023, the unrealized losses in the Company’s investment securities portfolio increased dramatically during 2022 and 2023 and thereby negatively impacted the Company’s accumulated other comprehensive income. These unrealized losses (net of income taxes) were approximately $53.8 million at September 30, 2023, compared to approximately $45.1 million and $3.6 million as of December 31, 2022 and 2021, respectively. 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.

The Company’s business and earnings are impacted by governmental, fiscal, and monetary policy over which it has no control.

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. The actions of the Federal Reserve also can materially affect the value of financial instruments that the Company holds, such as loans and debt securities, and also can affect the Company’s borrowers, potentially increasing the risk that they may fail to repay their loans. The Federal Reserve increased the target federal funds rate by 425 basis points during 2022 to a range of 425 to 450 basis points as of December 31, 2022 and by another 100 basis points during 2023 to a range of 525 to 550 basis points at September 30, 2023. The Company’s business and earnings also are affected by the fiscal or other policies that are adopted by various regulatory authorities of the United States. Changes in fiscal or monetary policy are beyond the Company’s control and hard to predict.

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Virginia	54-1838100
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1807 Seminole Trail Charlottesville, Virginia	22901
(Address of principal executive offices)	(Zip Code)


Blue Ridge Bankshares, Inc. Table of Contents
Item		Page

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of ~~June~~September 30, 2023 (unaudited) and December 31, 2022	3

	Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	4

	Consolidated Statements of Comprehensive Income (Loss) for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	6

	Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	8

	Notes to Consolidated Financial Statements (unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3941

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5659

Item 4.	Controls and Procedures	5659

PART II	OTHER INFORMATION	5760

Item 1.	Legal Proceedings	5760

Item 1A.	Risk Factors	5760

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	5764

Item 3.	Defaults Upon Senior Securities	5764

Item 4.	Mine Safety Disclosures	5764

Item 5.	Other Information	5764

Item 6.	Exhibits	5764

Signatures		5966


	For the six months ended
(Dollars in thousands)	June 30, 2023			June 30, 2022
Cash Flows From Operating Activities
Net (loss) income from continuing operations	$	(17,860	)	$	18,538
Net income from discontinued operations		—			337
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		877			1,038
Deferred income tax (benefit) expense		(1,242	)		3,316
Provision for credit losses - loans		25,200			9,994
Provision for credit losses - unfunded commitments		(1,000	)		—
Accretion of fair value adjustments (discounts) on acquired loans		(1,161	)		(4,058	)
Accretion of fair value adjustments (premiums) on acquired time deposits		(506	)		(833	)
Accretion of fair value adjustments (premiums) on acquired subordinated notes		(50	)		(50	)
Proceeds from sale of mortgage loans held for sale		116,540			368,217
Mortgage loans held for sale, originated		(115,528	)		(275,897	)
Gain on sale of mortgage loans		(995	)		(3,136	)
Proceeds from sale of guaranteed government loans held for sale		69,449			—
Guaranteed government loans held for sale, originated		(49,708	)		—
Gain on sale of guaranteed government loans		(4,793	)		—
Loss (gain) on disposal of premises and equipment		14			(405	)
Loss on disposal of other assets		528			—
Realized gains on sale of other equity securities		(10	)		—
Investment amortization expense, net		348			809
Amortization of subordinated debt issuance costs		18			17
Intangible amortization		690			783
Fair value adjustments of other equity investments		332			(9,278	)
Fair value adjustments attributable to mortgage servicing rights		1,364			(3,548	)
Increase in cash surrender value of bank owned life insurance		(574	)		(548	)
Increase in accrued interest receivable		(3,081	)		(665	)
(Increase) decrease in other assets		(11,277	)		399
Increase in other liabilities		19,577			5,033
Net cash provided by operating activities - continuing operations		27,152			110,063
Net cash provided by operating activities - discontinued operations		—			55
Cash provided by operating activities		27,152			110,118
Cash Flows From Investing Activities
Net increase in loans held for investment		(69,948	)		(272,026	)
Net (increase) decrease in federal funds sold		(1,066	)		8,410
Purchases of securities available for sale		—			(66,761	)
Proceeds from calls, sales, paydowns, and maturities of securities available for sale		12,690			15,163
Proceeds from sale of other real estate owned		264			70
Net decrease in Paycheck Protection Program loans		4,733			14,752
Net change in restricted equity and other investments		3,499			(4,857	)
Purchase of premises and equipment		(643	)		(221	)
Proceeds from sale of premises and equipment		55			1,937
Proceeds from sale of other assets		950			—
Proceeds from sale of LSMG		250			—
Capital calls of small business investment company funds and other investments		(2,594	)		(3,997	)
Nonincome distributions from limited liability companies		332			420
Net cash used in investing activities - continuing operations		(51,478	)		(307,110	)
Net cash provided by investing activities - discontinued operations		—			245
Cash used in investing activities		(51,478	)		(306,865	)
Cash Flows From Financing Activities:
Net (decrease) increase in demand, savings, and other interest-bearing deposits		(109,471	)		144,924
Net increase (decrease) in time deposits		220,564			(106,155	)
Common stock dividends paid		(4,641	)		(4,552	)
FHLB advances		1,080,000			135,000
FHLB repayments		(1,172,600	)		(10,000	)
FRB advances		65,000			—
FRB repayments		(51	)		(17,841	)
Stock option exercises		26			15
Dividend reinvestment plan issuances		68			—
Net cash provided by financing activities - continuing operations		78,895			141,391
Net cash provided by financing activities - discontinued operations		—			—
Cash provided by financing activities		78,895			141,391
Net increase (decrease) in cash and due from banks		54,569			(55,356	)
Cash and due from banks at beginning of period		77,274			130,548
Cash and due from banks at end of period	$	131,843		$	75,192


	For the nine months ended
(Dollars in thousands)	September 30, 2023			September 30, 2022
Cash Flows From Operating Activities
Net (loss) income from continuing operations	$	(46,014	)	$	21,273
Net income from discontinued operations		—			337
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Goodwill impairment		26,826			—
Depreciation and amortization		1,290			1,513
Deferred income tax expense		163			11,219
Provision for credit losses - loans		21,103			13,894
Benefit for credit losses - unfunded commitments		(1,550	)		—
Accretion of fair value adjustments (discounts) on acquired loans		(1,785	)		(4,816	)
Accretion of fair value adjustments (premiums) on acquired time deposits		(666	)		(1,166	)
Accretion of fair value adjustments (premiums) on acquired subordinated notes		(75	)		(75	)
Proceeds from sale of mortgage loans held for sale		186,460			460,655
Mortgage loans held for sale, originated		(189,340	)		(361,895	)
Gain on sale of mortgage loans		(1,523	)		(2,617	)
Proceeds from sale of guaranteed government loans held for sale		69,455			—
Guaranteed government loans held for sale, originated		(35,027	)		—
Gain on sale of guaranteed government loans		(4,799	)		—
Loss (gain) on disposal of premises and equipment		14			(405	)
Loss on disposal of other assets		528			—
Realized loss on sale of securities available for sale		649			—
Realized gain on sale of other equity securities		(207	)		—
Investment amortization expense, net		510			1,095
Amortization of subordinated debt issuance costs		26			26
Intangible amortization		998			1,160
Fair value adjustments of other equity investments		277			(9,228	)
Fair value adjustments attributable to mortgage servicing rights		726			(3,496	)
Increase in cash surrender value of bank owned life insurance		(885	)		(946	)
Increase in accrued interest receivable		(4,818	)		(4	)
Increase in other assets		(21,658	)		(12,630	)
Increase in other liabilities		22,910			9,139
Net cash provided by operating activities - continuing operations		23,588			123,033
Net cash provided by operating activities - discontinued operations		—			55
Cash provided by operating activities		23,588			123,088
Cash Flows From Investing Activities
Net increase in loans held for investment		(72,400	)		(381,956	)
Net (increase) decrease in federal funds sold		(1,158	)		33,322
Purchases of securities available for sale		—			(68,261	)
Proceeds from calls, sales, paydowns, and maturities of securities available for sale		28,774			23,348
Proceeds from sales of other equity investments		1,297			—
Proceeds from sale of other real estate owned		264			70
Net decrease in Paycheck Protection Program loans		5,553			17,258
Net change in restricted equity and other investments		4,413			(6,098	)
Purchase of premises and equipment		(713	)		(261	)
Proceeds from sale of premises and equipment		55			1,937
Proceeds from sale of other assets		950			—
Proceeds from sale of LSMG		250			—
Capital calls of small business investment company funds and other investments		(3,816	)		(4,179	)
Nonincome distributions from limited liability companies		1,221			918
Net cash used in investing activities - continuing operations		(35,310	)		(383,902	)
Net cash provided by investing activities - discontinued operations		—			245
Cash used in investing activities		(35,310	)		(383,657	)


Cash Flows From Financing Activities:
Net (decrease) increase in demand, savings, and other interest-bearing deposits								(62,655	)		239,055
Net increase (decrease) in time deposits								336,965			(126,174	)
Common stock dividends paid								(4,641	)		(6,854	)
FHLB advances								1,500,000			335,000
FHLB repayments								(1,661,700	)		(194,900	)
FRB advances								65,000			—
FRB repayments								(51	)		(17,846	)
Stock option exercises								26			14
Dividend reinvestment plan issuances								77			31
Net cash provided by financing activities - continuing operations								173,021			228,326
Net cash provided by financing activities - discontinued operations								—			—
Cash provided by financing activities								173,021			228,326
Net increase (decrease) in cash and due from banks								161,299			(32,243	)
Cash and due from banks at beginning of period								77,274			130,548
Cash and due from banks at end of period							$	238,573		$	98,305
Supplemental Schedule of Cash Flow Information
Cash paid for:
Interest	$	28,999		$	4,395		$	48,974		$	8,794
Income taxes	$	6,656		$	575		$	6,656		$	1,892
Non-cash investing and financing activities:
Unrealized losses on securities available for sale	$	(1,490	)	$	(42,859	)	$	(11,821	)	$	(57,908	)
Restricted stock awards, net of forfeitures	$	936		$	729		$	1,382		$	997
Cumulative effect adjustment due to adoption of accounting standard, net of income taxes	$	(5,474	)	$	—		$	(8,111	)	$	—
Cumulative effect adjustment of change in accounting method, net of income taxes	$	—		$	3,542		$	—		$	3,542


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	(unaudited)						(unaudited)
(Dollars in thousands except share data)	June 30, 2023			December 31, 2022 (1)			September 30, 2023			December 31, 2022 (1)
ASSETS
Cash and due from banks	$	131,843		$	77,274		$	238,573		$	77,274
Federal funds sold		2,492			1,426			2,584			1,426
Securities available for sale, at fair value		340,617			354,341			313,930			354,341
Restricted equity investments		17,538			21,257			16,006			21,257
Other equity investments		22,693			23,776			22,061			23,776
Other investments		27,157			24,672			28,453			24,672
Loans held for sale		64,102			69,534			69,640			69,534
Paycheck Protection Program loans, net of deferred fees and costs		7,234			11,967			6,414			11,967
Loans held for investment, net of deferred fees and costs		2,451,697			2,399,092			2,439,956			2,399,092
Less: allowance for credit losses		(43,067	)		(22,939	)		(49,631	)		(30,740	)
Loans held for investment, net		2,408,630			2,376,153			2,390,325			2,368,352
Accrued interest receivable		15,474			12,393			16,387			11,569
Other real estate owned		—			195			—			195
Premises and equipment, net		22,849			23,152			22,506			23,152
Right-of-use assets		5,744			6,903			9,100			6,903
Bank owned life insurance		47,828			47,245			48,136			47,245
Goodwill		26,826			26,826			—			26,826
Other intangible assets		5,925			6,583			5,520			6,583
Mortgage servicing rights, net		28,246			28,991			29,139			28,991
Deferred tax asset, net		11,051			9,182			13,237			12,227
Other assets		28,175			19,175			30,702			14,175
Total assets	$	3,214,424		$	3,141,045		$	3,262,713		$	3,130,465
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand	$	575,989		$	640,101		$	572,969		$	640,101
Interest-bearing demand and money market deposits		1,293,754			1,318,799			1,350,601			1,318,799
Savings		131,332			151,646			124,321			151,646
Time deposits		612,019			391,961			728,260			391,961
Total deposits		2,613,094			2,502,507			2,776,151			2,502,507
FHLB borrowings		219,100			311,700			150,000			311,700
FRB borrowings		65,000			51			65,000			51
Subordinated notes, net		39,888			39,920			39,871			39,920
Lease liabilities		6,765			7,860			10,015			7,860
Other liabilities		39,306			19,634			38,839			19,634
Total liabilities		2,983,153			2,881,672			3,079,876			2,881,672
Commitments and contingencies (Note 12)
Stockholders’ Equity:
Common stock, no par value; 50,000,000 shares authorized at June 30, 2023 and December 31, 2022; 18,933,637 and 18,950,329 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		196,990			195,960
Common stock, no par value; 50,000,000 shares authorized at September 30, 2023 and December 31, 2022; 19,192,471 and 18,950,329 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively								197,445			195,960
Additional paid-in capital		252			252			252			252
Retained earnings		80,287			108,262			38,916			97,682
Accumulated other comprehensive loss, net of tax		(46,258	)		(45,101	)		(53,776	)		(45,101	)
Total stockholders’ equity		231,271			259,373			182,837			248,793
Total liabilities and stockholders’ equity	$	3,214,424		$	3,141,045		$	3,262,713		$	3,130,465


	For the three months ended June 30, 2022																For the three months ended September 30, 2022
(Dollars in thousands)	Shares of Common Stock			Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss, net			Total			Shares of Common Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss, net			Total
Balance at beginning of period		18,771,065		$	194,679	$	252	$	105,027		$	(21,476	)	$	278,482			18,761,848	$	195,053	$	252	$	103,846		$	(37,491	)	$	261,660
Net income		—			—		—		1,118			—			1,118			—		—		—		2,736			—			2,736
Other comprehensive loss		—			—		—		—			(16,015	)		(16,015	)		—		—		—		—			(11,889	)		(11,889	)
Dividends on common stock		—			—		—		(2,299	)		—			(2,299	)		—		—		—		(2,303	)		—			(2,303	)
Restricted stock awards, net of forfeitures		(9,217	)		374		—		—			—			374			182,220		267		—		—			—			267
Dividend reinvestment plan issuances																		2,200		31		—		—			—			31
Balance at end of period		18,761,848		$	195,053	$	252	$	103,846		$	(37,491	)	$	261,660			18,946,268	$	195,351	$	252	$	104,279		$	(49,380	)	$	250,502


			June 30, 2023																	September 30, 2023
			Less than 12 Months					12 Months or Greater					Total							Less than 12 Months					12 Months or Greater					Total
(Dollars in thousands)	Number of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
State and municipal		82	$	2,900	$	(74	)	$	47,119	$	(8,320	)	$	50,019	$	(8,394	)		71	$	2,026	$	(54	)	$	39,251	$	(9,791	)	$	41,277	$	(9,845	)
U.S. Treasury and agencies		23		—		—			60,699		(11,355	)		60,699		(11,355	)		25		479		—			59,410		(12,651	)		59,889		(12,651	)
Mortgage backed securities		84		5,420		(367	)		178,615		(35,561	)		184,035		(35,928	)		83		1,013		(104	)		171,876		(42,801	)		172,889		(42,905	)
Corporate bonds		33		12,895		(1,605	)		15,769		(2,845	)		28,664		(4,450	)		33		9,569		(931	)		19,140		(3,469	)		28,709		(4,400	)
Total		222	$	21,215	$	(2,046	)	$	302,202	$	(58,081	)	$	323,417	$	(60,127	)		212	$	13,087	$	(1,089	)	$	289,677	$	(68,712	)	$	302,764	$	(69,801	)


	June 30, 2023										September 30, 2023
	Payment Status (Amortized Cost)										Payment Status (Amortized Cost)
(Dollars in thousands)	Current Loans		30-89 Days Past Due		90+ Days Past Due		Nonaccrual		Total		Current Loans		30-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total
Commercial and industrial	$	—	$	—	$	—	$	37,250	$	37,250	$	2,692	$	—	$	244	$	35,864	$	38,800
Real estate – mortgage, commercial		—		—		—		9,626		9,626		—		—		—		12,189		12,189
Total modified loans	$	—	$	—	$	—	$	46,876	$	46,876	$	2,692	$	—	$	244	$	48,053	$	50,989


	December 31, 2022
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no specific allowance recorded:
Commercial and industrial	$	1,309	$	1,289	$	—
Real estate – construction, commercial		521		521		—
Real estate – mortgage, commercial		4,438		4,404		—
Real estate – mortgage, residential		835		834		—
With an allowance recorded:
Commercial and industrial	$	37,938	$	37,911	$	3,178
Real estate – mortgage, commercial		129		126		1
Total	$	45,170	$	45,085	$	3,179


					Variable rate								Fixed rate												Variable rate								Fixed rate
(Dollars in thousands)	Total Maturities		One Year or Less		Total		1-5 years		5-15 years		More than 15 years		Total		1-5 years		5-15 years		More than 15 years		Total Maturities		One Year or Less		Total		1-5 years		5-15 years		More than 15 years		Total		1-5 years		5-15 years		More than 15 years
Commercial and industrial	$	545,921	$	136,387	$	223,659	$	189,961	$	32,824	$	874	$	185,875	$	90,897	$	89,832	$	5,146	$	532,999	$	120,839	$	226,630	$	197,065	$	28,524	$	1,041	$	185,530	$	77,163	$	89,839	$	18,528
Paycheck Protection Program		7,234		—		—		—		—		—		7,234		7,234		—		—		6,414		—		—		—		—		—		6,414		6,414		—		—
Real estate – construction, commercial		165,863		46,602		80,925		31,141		16,202		33,582		38,336		35,243		1,687		1,406		162,860		49,536		74,755		27,642		18,268		28,845		38,569		35,595		1,568		1,406
Real estate – construction, residential		82,199		23,415		9,858		8,797		71		990		48,926		9,712		—		39,214		76,896		23,710		8,657		7,156		69		1,432		44,529		9,052		—		35,477
Real estate – mortgage, commercial		879,729		52,847		457,901		69,902		218,050		169,949		368,981		212,808		148,736		7,437		879,655		65,141		457,346		71,149		198,240		187,957		357,168		203,824		144,759		8,585
Real estate – mortgage, residential		709,565		13,530		405,516		11,741		74,865		318,910		290,519		44,307		41,168		205,044		721,383		14,698		414,177		11,504		76,876		325,797		292,508		45,496		37,024		209,988
Real estate – mortgage, farmland		5,583		197		1,484		60		109		1,315		3,902		2,416		757		729		6,150		151		2,162		57		257		1,848		3,837		2,709		399		729
Consumer loans		62,510		4,933		8,615		8,454		161		—		48,962		25,955		23,003		4		59,528		3,032		9,758		9,599		159		—		46,738		24,741		21,990		7
Gross loans	$	2,458,604	$	277,911	$	1,187,958	$	320,056	$	342,282	$	525,620	$	992,735	$	428,572	$	305,183	$	258,980	$	2,445,885	$	277,107	$	1,193,485	$	324,172	$	322,393	$	546,920	$	975,293	$	404,994	$	295,579	$	274,720


	As of and for the three months ended						As of and for the six months ended
(Dollars in thousands)	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
ACL, beginning of period	$	29,974		$	12,013		$	22,939		$	12,121
Impact of ASC 326 adoption		—			—			4,022			—
Charge-offs
Commercial and industrial		(7,326	)		(2,442	)		(8,125	)		(4,927	)
Consumer		(1,694	)		(349	)		(2,204	)		(640	)
Total charge-offs		(9,020	)		(2,791	)		(10,329	)		(5,567	)
Recoveries
Commercial and industrial		887			388			1,005			424
Consumer		126			138			230			270
Total recoveries		1,013			526			1,235			694
Net charge-offs		(8,007	)		(2,265	)		(9,094	)		(4,873	)
Provision for credit losses - loans		21,100			7,494			25,200			9,994
ACL, end of period	$	43,067		$	17,242		$	43,067		$	17,242
Ratio of net charge-offs to average loans outstanding during period:
Commercial		1.64	%		0.69	%		0.89	%		2.08	%
Consumer		0.68	%		0.83	%		0.44	%		0.66	%
Total loans		1.29	%		0.47	%		0.73	%		0.52	%


	As of and for the three months ended						As of and for the nine months ended
(Dollars in thousands)	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
ACL, beginning of period	$	38,567		$	17,242		$	30,740		$	12,121
Impact of ASC 326 adoption		—			—			7,418			—
Charge-offs
Commercial and industrial		(1,832	)		(31	)		(9,955	)		(4,959	)
Consumer		(749	)		(716	)		(2,954	)		(1,355	)
Total charge-offs		(2,581	)		(747	)		(12,909	)		(6,314	)
Recoveries
Commercial and industrial		1,600			6			2,605			430
Consumer		445			133			674			403
Total recoveries		2,045			139			3,279			833
Net charge-offs		(536	)		(608	)		(9,630	)		(5,481	)
Provision for credit losses - loans		11,600			3,900			21,103			13,894
ACL, end of period	$	49,631		$	20,534		$	49,631		$	20,534
Ratio of net charge-offs to average loans outstanding during period:
Commercial		0.04	%		0.00	%		0.61	%		0.49	%
Consumer		1.45	%		2.89	%		5.45	%		2.89	%
Total loans		0.09	%		0.12	%		0.78	%		0.57	%


	June 30, 2023																						September 30, 2023
	Within One Year					One to Five Years					Five to Ten Years					Over Ten Years							Within One Year					One to Five Years					Five to Ten Years					Over Ten Years
(Dollars in thousands)	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Total Amortized Cost		Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Total Amortized Cost
Securities available for sale
State and municipal	$	—		—	%	$	6,068		2.40	%	$	32,393		1.97	%	$	20,842		1.60	%	$	59,303	$	—		—	%	$	4,337		2.83	%	$	33,956		1.98	%	$	12,829		2.51	%	$	51,122
U. S. Treasury and agencies		2		—	%		19,487		0.98	%		45,568		1.88	%		7,000		2.11	%		72,057		2		—	%		26,985		1.05	%		38,076		2.01	%		7,000		2.11	%		72,063
Mortgage backed securities		—		—	%		3,094		0.51	%		26,819		1.75	%		198,048		1.92	%		227,961		—		—	%		3,067		0.52	%		29,378		2.26	%		191,193		1.89	%		223,638
Corporate bonds		500		6.54	%		6,300		6.75	%		34,114		4.60	%		500		4.00	%		41,414		—		—	%		6,300		6.75	%		30,108		4.35	%		500		4.00	%		36,908
Total	$	502				$	34,949				$	138,894				$	226,390				$	400,735	$	2				$	40,689				$	131,518				$	211,522				$	383,731


	June 30, 2023
	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.	$	298,815		10.77	%	$	291,324		10.50	%	$	277,451		10.00	%
Tier 1 capital
(To risk-weighted assets)
Blue Ridge Bank, N.A.	$	257,195		9.27	%	$	235,831		8.50	%	$	221,959		8.00	%
Common equity tier 1 capital
(To risk-weighted assets)
Blue Ridge Bank, N.A.	$	257,195		9.27	%	$	194,214		7.00	%	$	180,342		6.50	%
Tier 1 leverage
(To average assets)
Blue Ridge Bank, N.A.	$	257,195		7.86	%	$	130,888		4.00	%	$	163,610		5.00	%


	June 30, 2023										September 30, 2023
	Instantaneous Parallel Rate Shock Scenario										Instantaneous Parallel Rate Shock Scenario
	Change in Net Interest Income - Year 1					Change in Net Interest Income - Year 2					Change in Net Interest Income - Year 1					Change in Net Interest Income - Year 2
Change in interest rates:
+400 basis points											$	(17,602	)	(19.0	%)	$	(16,748	)	(17.0	%)
+300 basis points	$	(10,808	)	(11.5	%)	$	(11,204	)	(11.1	%)		(12,241	)	(13.2	%)		(11,520	)	(11.7	%)
+200 basis points		(6,460	)	(6.9	%)		(6,549	)	(6.5	%)		(7,440	)	(8.1	%)		(6,772	)	(6.9	%)
+100 basis points		(2,818	)	(3.0	%)		(2,712	)	(2.7	%)		(3,323	)	(3.6	%)		(2,844	)	(2.9	%)
Base case
-100 basis points		1,332		1.4	%		774		0.8	%		2,061		2.2	%		1,320		1.3	%
-200 basis points		2,196		2.3	%		291		0.3	%		3,681		4.0	%		1,608		1.6	%
-300 basis points		3,386		3.6	%		25		(—	%)		5,032		5.4	%		986		1.0	%
-400 basis points												5,667		6.1	%		(489	)	(0.5	%)



10.1		Amended and Restated Employment Agreement, dated ~~as of May 7,~~October 24, 2023, by and ~~between~~among Blue Ridge Bankshares, Inc., Blue Ridge Bank, National Association, and G. William Beale.


~~10.2~~		~~Blue Ridge Bankshares, Inc. 2023 Stock Incentive Plan (incorporated by reference to Appendix A of Blue Ridge Bankshares, Inc.'s proxy statement for the 2023 annual meeting, filed April 28, 2023).~~

31.1		Rule 13(a)-14(a) Certification of Chief Executive Officer.

31.2		Rule 13(a)-14(a) Certification of Chief Financial Officer.

32.1		Statement of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101		The following materials from Blue Ridge Bankshares, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30, 2023, formatted in Inline Extensible Business Reporting Language (XBRL), include: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of


		Comprehensive Income (Loss), (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) related notes (filed herewith).

104		The cover page from Blue Ridge Bankshares, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30, 2023, formatted in Inline XBRL (included with Exhibit 101).



	BLUE RIDGE BANKSHARES, INC.

Date: ~~August 7,~~November 14, 2023	By:	/s/ G. William Beale
		G. William Beale
		President and Chief Executive Officer

	By:	/s/ Judy C. Gavant
		Judy C. Gavant
		Executive Vice President and Chief Financial Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company