Executive Summary

Q2 2024 loss widened to $11.4M (–$0.47 EPS) from –$2.9M (–$0.15 EPS) in Q1, driven by a non‑cash –$8.5M fair value mark on a fintech equity investment and higher credit provisioning; net interest margin improved to 2.79% sequentially .
Capital materially strengthened post $152.5M net private placement proceeds; Blue Ridge Bank’s Tier 1 leverage ratio rose to 11.02% and Total RBC to 15.11%, exceeding OCC Consent Order minimums (10%/13%) .
Fintech/BaaS wind‑down progressed: fintech-related deposits fell to $206.6M (8.9% of total) from $303.0M (12.3%) in Q1 and $707.6M (27.1%) YoY; estimated uninsured deposits declined to 17.9% from 22.4% in Q1 .
Management expects deposit costs to decline in H2 2024 as high-cost BaaS balances are reduced; FDIC subsequently granted a waiver enabling acceptance/renewal/rollover of brokered deposits (timed approval/amount limited) .
No earnings call transcript or S&P Global consensus estimates were available; comparisons vs Street are not determinable this quarter.

What Went Well and What Went Wrong

What Went Well

Capital and regulatory posture: “Bank capital levels meet enhanced regulatory minimum capital ratios,” with Tier 1 leverage 11.02%, CET1 14.13%, Total RBC 15.11% post capital infusion .
BaaS exit execution: BaaS deposits are “roughly 7 percent of total deposits – about one-third of what they were this time last year,” indicating steady sequential declines over three quarters .
Cost and NIM: Regulatory remediation expenses fell again; NIM improved to 2.79% from 2.75% on slightly lower funding costs; salaries/benefits declined QoQ amid headcount reductions .

Management quote: “We have moved aggressively to wind down our fintech Banking‑as‑a‑Service… plans are on track and are working” .

What Went Wrong

Earnings pressure: Q2 noninterest income fell to $0.3M due to a –$8.5M non‑cash mark on a fintech equity stake; EPS loss expanded to –$0.47 .
Credit costs/charge-offs: Provision swung to $3.1M from a $1.0M recovery in Q1; net loan charge‑offs rose to an annualized 1.81% (incl. charge‑off of a $9.4M reserve on a specialty finance loan reclassified to HFS) .
Balance sheet shrink: Loans HFI declined $134.8M QoQ to $2.26B; total assets fell $143.1M QoQ to $2.93B to meet liquidity needs of BaaS wind‑down and wholesale maturities .

Financial Results

Income Statement and EPS vs prior periods

Metric	Q2 2023	Q1 2024	Q2 2024
Net Interest Income ($USD Millions)	$23.890	$20.349	$20.085
Noninterest Income ($USD Millions)	$9.736	$7.825	$0.308
Provision for (Recovery of) Credit Losses ($USD Millions)	$10.013	$(1.000)	$3.100
Noninterest Expense ($USD Millions)	$34.052	$32.474	$29.344
Net Loss ($USD Millions)	$(8.613)	$(2.893)	$(11.435)
Diluted EPS ($USD)	$(0.45)	$(0.15)	$(0.47)

Margins and Efficiency

Metric	Q2 2023	Q1 2024	Q2 2024
Net Interest Margin (%)	3.12%	2.75%	2.79%
Efficiency Ratio (%)	101.3%	115.3%	143.9%

Balance Sheet and Deposits

Metric	Q2 2023	Q1 2024	Q2 2024
Total Assets ($USD Billions)	$3.214	$3.076	$2.933
Loans Held for Investment ($USD Billions)	$2.454	$2.394	$2.259
Total Deposits ($USD Billions)	$2.613	$2.466	$2.326
Fintech‑Related Deposits ($USD Millions)	$707.6	$303.0	$206.6
BaaS Deposits ($USD Millions)	$468.7	$273.0	$172.5
Estimated Uninsured Deposits (% of Total)	—	22.4%	17.9%

Capital and Asset Quality KPIs

Metric	Q2 2023	Q1 2024	Q2 2024
Tier 1 Leverage Ratio (%)	9.09%	7.44%	11.02%
CET1 Ratio (%)	9.09%	9.28%	14.13%
Total Risk‑Based Capital Ratio (%)	10.44%	10.51%	15.11%
ACL to Loans HFI (%)	1.57%	1.46%	1.24%
Nonperforming Loans ($USD Millions)	—	$53.2	$46.0
NPLs to Total Assets (%)	—	1.73%	1.57%
Annualized Net Charge‑offs (%)	1.28%	0.14%	1.81%
Tangible Book Value per Share ($)	10.55	9.04	4.10

Notes: OCC Consent Order minimums require 10% Tier 1 leverage and 13% Total RBC; BRB exceeded these as of June 30, 2024 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cost of Deposits	H2 2024	“Core deposits and their costs have been relatively stable going back several quarters”	“We anticipate that our overall cost of deposits will decline in the back half of 2024”	Raised (directional improvement)
Fintech/BaaS Deposits	2024	Active wind‑down, sequential declines	Wind‑down “on‑track… working”; BaaS deposits ~7% of total deposits by Q2	Maintained trajectory
Brokered Deposits Capability	Post‑Q2 2024	Under Consent Order prohibition pending waiver	FDIC approval received to accept/renew/rollover brokered deposits (for a period and amount)	Capability restored (regulated limits)
Capital Position	2024 compliance	OCC Consent minimums: Tier 1 leverage 10%, Total RBC 13%	Ratios exceeded at Q2; plan to maintain/enhance capital levels	Maintained above minimums
Formal Revenue/Margin/Tax Guidance	N/A	None provided	None provided	No change

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was available; themes are drawn from Q4 2023 and Q1/Q2 press releases.

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Regulatory/Consent Order	OCC Consent Order issued; capital/strategic plans required	Bank capital ratios exceed OCC minimums; remediation expenses declining	Improving compliance/capital
Fintech/BaaS Exit	Actively reducing BaaS partners; fintech deposits fell sharply in Q4/Q1	Wind‑down “on track,” BaaS deposits ~7% of total; fintech deposits $206.6M	De‑risking progressing
Capital Actions	Announced $150M commitments (Q4); closed $150M private placement (April)	Additional $11.6M closed (June); $152.5M net proceeds; $110M capital contributed to bank	Strengthened capital
Deposit Mix/Costs	Higher wholesale time deposits; cost of deposits 2.85% in Q1	Cost of deposits 2.84% in Q2; expectation of decline in H2 with BaaS exit	Stabilizing then easing
Asset Quality/Specialty Finance	Elevated NPLs; charge‑offs on specialty finance loans; ACL adjustments	NPLs down to $46.0M; large reserve charge‑off on specialty finance loan; ACL 1.24%	Mixed: improving NPLs, higher NCOs
Brokered Deposits	Prohibited pending waiver (Consent Order)	FDIC waiver subsequently approved with limits	Access restored (limited)

Management Commentary

Strategic transformation: “We are now several quarters into an expansive initiative to address… remediation requirements… and restore Blue Ridge Bank to its core strengths… we have a comprehensive strategy… to fundamentally strengthen our position and operating profile” .
BaaS wind‑down and deposit costs: “We have moved aggressively to wind down our fintech… BaaS operations… we anticipate that our overall cost of deposits will decline in the back half of 2024” .
Credit and balance sheet: “We have seen a general improvement in our nonperforming loan and asset ratios… will continue to improve our credit culture and oversight, and to reduce our exposure to non‑core loans” .
Capital and governance: “Pleased to have the capital raise behind us… welcomed three new directors… their contributions have been meaningful already” .

Q&A Highlights

No Q2 2024 earnings call transcript could be found; Q&A details and any guidance clarifications are unavailable this quarter.

Estimates Context

Wall Street consensus (S&P Global) for Q2 2024 EPS and revenue was unavailable due to system access limits at the time of analysis; therefore, beat/miss vs consensus cannot be determined this quarter.
Reported results: EPS –$0.47; Net interest income $20.1M; Noninterest income $0.3M; Provision $3.1M .

Key Takeaways for Investors

Capital rebuilt: $152.5M net proceeds and $110M capital contribution to the bank lifted Tier 1 leverage and Total RBC well above OCC minimums, reducing regulatory risk and supporting deposit/growth optionality .
De‑risking in motion: Rapid reduction of fintech/BaaS deposits and reclassification/sale of a specialty finance loan are simplifying the balance sheet; NPLs declined QoQ though charge‑offs elevated from reserve actions .
Earnings headwinds are transitional: Non‑cash –$8.5M fair value hit and higher provisioning weighed on Q2; remediation and salary expenses fell, suggesting operating improvement potential as one‑offs fade .
Margin stabilization: NIM ticked up to 2.79% with slightly lower funding costs and BaaS wind‑down; management expects deposit costs to ease in H2 2024, a potential margin tailwind .
Liquidity/funding flexibility: FDIC waiver enables brokered deposit usage within limits, providing a tool to manage funding while core deposits grew $43.1M in Q2 (ex‑municipality outflow) .
Watch TBV dilution vs capital strength: Tangible book per share fell to $4.10 post large share issuance, but absolute tangible common equity rose; the trade‑off may be supportive for stability over near‑term per‑share metrics .
Near‑term trading lens: Headlines/catalysts include continued BaaS exit, deposit cost trajectory, and any updates on brokered deposit limits; medium‑term thesis hinges on sustained credit normalization and cost discipline translating into margin and earnings recovery .

Sources: Q2 2024 press release and 8‑K (including full financial tables), Q1 2024 press release, Q4 2023 8‑K. Citations embedded above.

BLUE RIDGE BANKSHARES, INC. (BRBS)·Q2 2024 Earnings Summary