Blue Ridge Bankshares posts $4.2 million loss after major credit write-off in third quarter
Key Facts
Blue Ridge Bankshares reported on October 26 a net loss of $4.2 million, or $0.05 per diluted common share, for the quarter ended September 30, 2026. The loss widened from a net loss of $1.3 million, or $0.01 per share, in the second quarter. The company reported net income of $5.6 million and diluted earnings per share of $0.06 in the third quarter of 2025. Interim Chief Executive Harry Gullyday attributed part of the quarter’s actions to a major loan write-off tied to a legacy credit relationship outside the bank’s geographic footprint. He said the company “continued to reduce balance sheet risk” by writing off a large portion of that relationship with a hydroponics business.
Gullyday said the write-off involved a legacy credit relationship with a borrower outside the bank’s geographic footprint whose business was in hydroponics. Nonperforming loans fell to $24.9 million on September 30, from $31.2 million on June 30. But the company said the decline included a $9.9 million credit write-off on loans to a single borrower outside its market. The lower nonperforming-loan balance therefore coincided with a credit loss charged to the quarter and does not by itself indicate improved collections. In August, the bank disclosed that a commercial borrower with $11.4 million in outstanding loans had ceased operations, and it raised the specific allowance associated with those loans to $2.9 million.
The background to the relationship dates to the company’s August disclosure that the commercial borrower had informed it that the business had ceased operations, with $11.4 million in outstanding loans. The company raised the specific allowance associated with the loans to $2.9 million on June 30. It also said in the disclosure that a change in its credit-loss estimate increased the second-quarter provision by $1.4 million and raised its net loss by about $1.1 million. This places the third-quarter loss in the context of credit pressures that preceded the current results, alongside the write-off recorded during the quarter. By contrast, operating indicators showed sequential improvement in net interest margin and adjusted pre-tax earnings.
Net interest margin rose to 3.08% in the third quarter, up 17 basis points from the previous quarter. Adjusted pre-tax earnings were $5.3 million, compared with $2.9 million in the second quarter, an increase of about 85%. The measure excludes merger expenses and termination-related compensation, according to the company’s definition. Noninterest expense remained at $15.9 million in both the third and second quarters. Salaries and benefits fell $1.1 million sequentially, but that decline was partly offset by $1.2 million in merger expenses recorded in the third quarter.
The comparison between net loss and adjusted earnings reflects the different items included in each measure, as the adjusted measure excluded merger expenses and termination-related compensation. Total noninterest expense remained flat at $15.9 million between the two quarters. The $1.1 million decline in salaries and benefits coincided with merger expenses of $1.2 million. In the stock market, the company’s shares, listed under the ticker BRBS, closed at $4.07 on October 23, 2026. Available closing data did not include the stock’s daily high or low.
Blue Ridge Bankshares and HomeTrust Bancshares announced a definitive merger agreement on August 17, 2026, and the company expects to complete it in the first quarter of 2027. The expected timing remains subject to obtaining the necessary approvals, including approval from shareholders of both companies. Under the merger agreement, Blue Ridge shareholders will receive 0.086 HomeTrust shares for each Blue Ridge share they own. The agreement also provides for a cash payment in lieu of any fractional shares. The deal sets a next milestone for the bank’s shareholders, while its completion remains contingent on securing the required approvals.