Executive Summary

Q3 2024 inflected to profitability with net income of $0.946M ($0.01 EPS) versus a Q2 loss, driven by a $6.2M recovery of credit losses tied to the sale of a specialty finance loan and expense reductions; net interest margin eased to 2.74% and efficiency ratio improved to 121.3% from 143.9% sequentially .
Deposits excluding fintech-related and wholesale grew $73.7M, while fintech BaaS deposits fell to 2.7% of total deposits, reinforcing the pivot back to core community banking; brokered deposits declined $33.9M sequentially .
Capital strengthened further: TCE/TA rose to 10.6% and all OCC-required bank capital ratios remained above minimums; TBV/share improved to $4.25 aided by AFS securities gains amid lower rates .
Noninterest income was pressured by MSR marks and a $1.0M MSR sale loss, partly offset by core mortgage banking income; management plans to sell the majority of remaining MSRs in Q4, implying near-term income volatility but balance sheet simplification .
Consensus estimates from S&P Global were unavailable; near-term stock catalysts are the completion of the BaaS exit by year-end, sustained core deposit growth, continued nonperformer reduction, and clarity on MSR disposition timing .

What Went Well and What Went Wrong

What Went Well

Sequential return to positive earnings: net income $0.946M and pre-tax income $1.545M, helped by $6.2M recovery of credit losses linked to an $8.4M recovery on a specialty finance loan sale .
Core deposit momentum: excluding fintech-related and wholesale, deposits rose $73.7M in Q3 and $143.5M YTD; fintech BaaS deposits down to 2.7% of total deposits, ahead of schedule to fully exit by year-end .
Cost discipline: noninterest expense fell by $2.8M sequentially (FDIC assessments, remediation, headcount in GGL/compliance) and capital ratios strengthened (Bank CET1 15.68%, TCE/TA 10.6%) .
Management tone: “We remain ahead of schedule… expect to be fully exited [BaaS] by the end of the year… noninterest expense down nearly 10%… deposits grew… nonperforming loans ratio improved,” CEO G. William “Billy” Beale .

What Went Wrong

NIM pressure and asset shrink: net interest income declined to $19.1M and NIM to 2.74%, reflecting lower average earning assets and nonaccrual interest reversals; loans HFI declined $78.9M as out-of-market exposures were reduced .
MSR drag: a $4.9M negative FV variance and $1.0M MSR sale loss depressed noninterest income to $2.739M, with further MSR sales expected in Q4 that could add volatility .
Tax rate volatility tied to discrete items: effective tax rate jumped to 38.8% (restricted stock vesting) vs. 5.1% in Q2 (BOLI surrender effect), complicating earnings run-rate extrapolation .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024	Consensus (Q3 2024)
Total Revenue ($USD Millions) = Net Interest Income + Noninterest Income	$29.607	$20.393	$21.840	N/A
Net Interest Income ($USD Millions)	$22.192	$20.085	$19.101	N/A
Noninterest Income ($USD Millions)	$7.415	$0.308	$2.739	N/A
Net Income ($USD Millions)	$(41.371)	$(11.435)	$0.946	N/A
Diluted EPS ($USD)	$(2.18)	$(0.47)	$0.01	N/A
Net Interest Margin (%)	2.92%	2.79%	2.74%	N/A
Efficiency Ratio (%)	127.7%	143.9%	121.3%	N/A

Note: Consensus EPS/Revenue via S&P Global were unavailable due to system request limits.

Segment/Component breakdown (Noninterest income):

Component ($USD Millions)	Q3 2023	Q2 2024	Q3 2024
Residential Mortgage Banking Income	$2.917	$3.090	$2.939
Mortgage Servicing Rights (FV adjustments)	$0.894	$2.019	$(2.915)
Loss on Sale of MSRs	—	—	$(1.011)
Wealth & Trust Management	$0.462	$0.623	$0.730
Service Charges on Deposit Accounts	$0.365	$0.423	$0.417
Bank & Purchase Card, net	$0.357	$0.513	$0.690
Increase in cash surrender value of BOLI	$0.311	$0.333	$0.127
Fair Value adjustments of other equity investments	$0.055	$(8.537)	$0.160
Other	$2.703	$1.832	$1.602
Total Noninterest Income	$7.415	$0.308	$2.739

KPIs and Balance Sheet:

KPI	Q3 2023	Q2 2024	Q3 2024
Loans Held for Investment ($USD Billions)	$2.446	$2.259	$2.180
Total Deposits ($USD Billions)	$2.776	$2.326	$2.346
Fintech BaaS Deposits ($USD Millions)	$493.009	$172.456	$63.674
Fintech BaaS Deposits / Total Deposits (%)	17.8%	7.4%	2.7%
Noninterest-Bearing Deposits / Total (%)	20.6%	20.2%	19.6%
Held-for-Investment Loan-to-Deposit Ratio (%)	88.1%	97.1%	92.9%
Nonperforming Loans / Total Assets (%)	2.51%	1.57%	1.09%
ACL / Loans HFI (%)	2.03%	1.24%	1.17%
Tangible Book Value per Share ($)	9.30	4.10	4.25
TCE / TA (%)	5.5%	10.3%	10.6%
Sources of Liquidity ($USD Millions)	—	—	~$805.0 (202.7% of uninsured deposits)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Exit Fintech BaaS Depository Operations	FY 2024	On track to wind down BaaS; BaaS deposits ~7% of total (Q2)	Ahead of schedule; expect fully exited by year-end; BaaS deposits ~3% at Q3-end	Maintained/Accelerated
MSR Portfolio Strategy	Q4 2024	Not specified	Expect to sell majority of remaining MSRs in Q4	New action
Brokered Deposits Waiver	6 months (from Q3 approval)	Prohibited by Consent Order	FDIC approved ability to accept/renew/rollover brokered deposits equal to maturities for six months; plan to reapply in Q4	Updated regulatory status
Capital vs OCC Minimums	Ongoing	Bank capital ratios exceeded OCC minimums in Q2	All Bank ratios remain above OCC minimums in Q3	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
Fintech BaaS Exit	Q1: Deposits related to fintech declined $162.9M; BaaS in wind down . Q2: BaaS deposits ~7% of total; continued reduction .	BaaS deposits ~2.7% of total; ahead of schedule; full exit expected by year-end .	Accelerating exit
Regulatory Remediation	Q1: Action plan advanced; tasks completed to date per OCC . Q2: Remediation expenses falling; FDIC brokered deposit waiver obtained post-Q2 .	Continued progress; remediation expenses down; capital ratios above OCC minimums .	Improving
Deposit Mix & Costs	Q1: Core deposits relatively stable; cost of deposits 2.85% . Q2: Ex-wholesale cost of deposits 2.28%; core growth $43.1M .	Excluding fintech/wholesale, deposits +$73.7M; ex-wholesale cost of deposits 1.71% .	Favorable mix, lower cost
Asset Quality	Q1: NPLs/Assets improved to 1.73% . Q2: NPLs/Assets 1.57%; specific reserves charged off on specialty finance loan .	NPLs/Assets 1.09% after recovery on loan sale; ACL/Loans 1.17% .	Improving
MSRs/Mortgage	Q1: Positive MSR FV +$0.729M . Q2: Positive MSR FV +$2.019M .	MSR FV $(2.915)M, $(1.011)M loss on MSR sale; plan to sell majority in Q4 .	Near-term headwind; strategic exit
Capital & Liquidity	Q1: Pre-placement; leverage/CET1 in single digits . Q2: Placement completed; leverage 11.02%, CET1 14.13% .	Leverage 11.56%, CET1 15.68%; liquidity ~$805M (203% of uninsured deposits) .	Strengthening

Management Commentary

“We remain ahead of schedule on this initiative and expect to be fully exited from this business by the end of the year. Consequently, deposits from fintech BaaS sources were down to only 3% of total deposits at quarter end… [noninterest expense] sequentially down nearly 10%… deposits, excluding fintech-related and wholesale, grew by $74 million… nonperforming loans to total assets ratio was 1.1%” — President & CEO G. William “Billy” Beale .
“Net interest income was $19.1 million… decline due to lower average balances of interest-earning assets and reversal of interest income due to loans placed on nonaccrual… NIM declined in the quarter to 2.74% from 2.79%” .
“Noninterest income… lower due to a $4.9 million negative variance in fair value adjustment on MSRs… and a $1.0 million loss on the sale of a portion of the Company’s portfolio of MSRs. The Company expects to sell the majority of its remaining MSRs in the fourth quarter” .
“Bank’s tier 1 leverage ratio… 11.56%… CET1 15.68%… TCE/TA 10.6%… improvement primarily due to reduction in AOCI from $10.0 million after-tax unrealized gains on AFS securities” .

Q&A Highlights

No Q3 2024 earnings call transcript was available in the document catalog; therefore, Q&A highlights and any clarifications from the call could not be assessed [ListDocuments result: 0 earnings-call-transcript].

Estimates Context

S&P Global (Capital IQ) consensus for Q3 2024 EPS and revenue was attempted but unavailable due to request limits; as such, results cannot be framed versus Street estimates in this report. This may reflect limited coverage for BRBS or system constraints at the time of retrieval. We attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and estimate counts for Q3 2024 and the latest quarters, but the data was not returned.

Key Takeaways for Investors

Near-term earnings are sensitive to discrete items: the Q3 profit was aided by a $6.2M recovery on a specialty finance loan sale, while MSR marks and sale losses suppressed noninterest income; expect continued volatility until MSR disposition completes in Q4 .
Strategic derisking is progressing: fintech BaaS deposits reduced to ~2.7% of total and ahead-of-schedule exit by year-end, lowering funding cost and operational risk; core deposits growth is a constructive sign for NIM stabilization over time .
Capital and liquidity support the pivot: post-placement metrics and rising TCE/TA (10.6%) provide flexibility to absorb balance sheet repositioning and regulatory demands; liquidity at ~$805M (203% of uninsured deposits) mitigates confidence risk .
Watch NIM trajectory: sequential NIM slippage to 2.74% reflects nonaccrual reversals and asset mix; continued reduction in higher-rate fintech deposits and wholesale funding should help funding costs, but asset shrink weighs on NII near term .
Asset quality trend positive: NPLs/Assets down to 1.09% and ACL/Loans at 1.17%; continued scrutiny of purchased loans and GGL exposures remains a monitoring point as reserves shifted this year .
Regulatory remediation de-risking: lower remediation expense and FDIC waiver to manage brokered deposits near-term are constructive; sustained compliance and OCC minimums adherence remain key to restoring valuation multiples .
Trading lens: Completion of BaaS exit, evidence of steady core deposit growth, and clarity on MSR sales are likely the near-term stock reaction catalysts; absent Street estimates, focus on sequential NII/NIM stabilization and opex trajectory for momentum .

Sources: Q3 2024 press release and attached financials ; Q3 2024 8-K (Item 2.02 and Exhibit 99.1) ; Q2 2024 press release and 8-K ; Q1 2024 press release .

BLUE RIDGE BANKSHARES, INC. (BRBS)·Q3 2024 Earnings Summary