LOS ANGELES--(BUSINESS WIRE)---- $BRBS--BRBS Investors Have the Opportunity to Join Investigation of Blue Ridge Bankshares, Inc. with the Schall Law Firm. ...

You may also contact Robert H. Lefkowitz, Esq. either via email at [email protected] or by telephone at 212- 725-1000. One of our attorneys will personally speak with you about the case at no cost or obligation. Purcell & Lefkowitz LLP is a law firm exclusively committed to representing shareholders nationwide who are victims of securities fraud, breaches of fiduciary duty and other types of corporate misconduct. For more information about the firm and its attorneys, please visit https://pjlfirm.com. Attorn ...

BROOKLYN, N.Y., Aug. 14, 2025 (GLOBE NEWSWIRE) -- The Rosen Law Firm, P.A. announces that the United States District Court for the Eastern District of New York has approved the following announcement of a proposed class action settlement that would benefit purchasers of publicly-traded common stock of Blue Ridge Bankshares, Inc. (NYSE: BRBS): SUMMARY NOTICE OF PENDENCY AND PROPOSED CLASS ACTION SETTLEMENT If you have any questions about the Settlement, you may call or write to Lead Counsel: Jonathan Horne T ...

Blue Ridge Bankshares (NYSE: BRBS ) is a small bank in Virginia that is trading at a relatively low valuation, but the bank has some issues to fix and therefore is a risky investment for long-term investors right now.Labutes IR is a Fund Manager/Analyst specialized in the financial sector, with more than 18 years of experience in the financial markets. I have worked at several type of institutions in the industry, always at the buy side and related to portfolio management. Associated with the existing autho ...

WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-39165 BLUE RIDGE BANKSHARES, INC. (Exact name of registrant as specified in its charter) Virginia 54-183 ...

Core Viewpoint - Blue Ridge Bankshares, Inc. (BRBS) has returned to profitability in Q2 2025, reporting a net income of $1.3 million, marking a significant recovery from a net loss of $11.4 million in the same quarter last year [2][8]. Financial Performance - BRBS reported a net income of $1.3 million, or $0.01 per diluted share, compared to a net loss of $11.4 million, or ($0.47) per share, in the prior-year period [2]. - Net interest income was $19.8 million, relatively flat compared to $20.1 million in Q2 2024, with a recovery of credit losses of $0.7 million against a provision of $3.1 million in the previous year [3]. - Non-interest income surged to $3.2 million from $0.3 million in the prior year's quarter, driven by improved service charges and previously withheld mortgage servicing rights proceeds [4]. - Non-interest expenses decreased by 24.9% to $22 million from $29.3 million a year earlier, aided by cost-cutting measures [4]. Key Business Metrics - Net interest margin improved to 3.15% from 2.90% in Q1 2025 and 2.79% a year ago, primarily due to a decrease in deposit costs [5]. - Total assets decreased to $2.56 billion from $2.69 billion in Q1 2025 and $2.93 billion a year earlier [6]. - Loans held for investment declined 12.4% year over year to $1.98 billion, while deposits were down 13.6% year over year to $2.01 billion [6]. Management Commentary - CEO G. William "Billy" Beale described the quarter as a turning point, highlighting improvements in net interest margin and disciplined cost management as key factors [8]. - The company has undergone headcount reductions, with 109 positions cut in the first half of the year, as part of efforts to streamline operations [8]. Future Outlook - Management expects to achieve an annualized non-interest expense-to-assets ratio below 3% by Q4 2025, with a focus on operational improvement and further cost reductions [11]. - The company believes it is nearing completion of regulatory remediation stemming from a January 2024 consent order [12]. Strategic Developments - On March 27, 2025, BRBS completed the divestiture of Monarch Mortgage, resulting in a $0.2 million loss year to date, as part of a strategy to realign its business model towards traditional community banking [13]. - The company redeemed $15 million in subordinated debt and partially redeemed an additional $10 million of its 2029 Notes, actions aimed at supporting future interest expense reductions [14].

```markdown [Overview](index=1&type=section&id=Blue%20Ridge%20Bankshares%2C%20Inc.%20Announces%202025%20Second%20Quarter%20Results) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) The company returned to profitability in Q2 2025, reporting net income of $1.3 million, a significant improvement from the net loss in the previous quarter and the same quarter last year. For the first half of 2025, the company reported net income of $0.9 million, reversing a substantial loss from the first half of 2024 Quarterly Financial Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $1.3 million | ($0.4 million) | ($11.4 million) | | Diluted EPS | $0.01 | ($0.01) | ($0.47) | First Half Financial Performance | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $0.9 million | ($14.3 million) | | Diluted EPS | $0.01 | ($0.66) | [Message from the CEO](index=1&type=section&id=A%20Message%20From%20Blue%20Ridge%20Bankshares%2C%20Inc.%20President%20and%20CEO%2C%20G.%20William%20%27Billy%27%20Beale) CEO G. William "Billy" Beale highlighted the company's return to profitability as a sign of future sustainable earnings. Key positive trends include a growing net interest margin (3.15%) due to lower deposit costs, improved noninterest income, and significant reductions in noninterest expenses through headcount cuts. The focus is now shifting from regulatory remediation to community bank growth - The company's net interest margin grew to **3.15%** for the quarter, primarily driven by lower deposit costs[6](index=6&type=chunk) - Noninterest expense was reduced by almost **$1.0 million** from the first quarter, with an expectation of further reductions as the company nears completion of regulatory remediation activities[7](index=7&type=chunk) - Headcount was reduced by **109** in the first half of 2025 and by **170** since the end of Q2 2024, contributing to expense savings[7](index=7&type=chunk) - The company is shifting its focus from remediation activities ('fixers') to growing its community bank ('growers')[8](index=8&type=chunk)[9](index=9&type=chunk) [Sale of Monarch Mortgage](index=2&type=section&id=Sale%20of%20Monarch%20Mortgage) The company completed the sale of its Monarch Mortgage division on March 27, 2025. The transaction resulted in a minor loss of $0.2 million, and all related loan activities were concluded by the end of Q2 2025 - The sale of the Monarch Mortgage division was completed on **March 27, 2025**[9](index=9&type=chunk) - The sale resulted in a **$0.2 million loss**, which was reported in other noninterest income for the year-to-date 2025 period[9](index=9&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Q2 2025 Key Metrics Analysis](index=2&type=section&id=Q2%202025%20Highlights) The company's Q2 2025 performance showed significant improvement across key metrics. Net income turned positive, driven by a 25 basis point expansion in net interest margin to 3.15% and a $1.0 million reduction in noninterest expenses. Capital ratios strengthened, exceeding regulatory requirements, and asset quality remained stable with a slight decrease in nonperforming loans [Net Income](index=2&type=section&id=Net%20Income) The company reported net income of $1.3 million in Q2 2025, a turnaround from a $0.4 million loss in Q1 2025. The quarter's results were influenced by $0.3 million in severance costs and a $1.3 million benefit from a recovery related to a former fintech BaaS partner Net Income and Special Items (QoQ) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | **Net Income (Loss)** | **$1.3M** | **($0.4M)** | | Severance Costs | $0.3M | $0.7M | | BaaS Partner Recovery | $1.3M | - | | Mortgage Division Sale Loss | - | $0.2M | [Net Interest Income and Net Interest Margin (NIM)](index=2&type=section&id=Net%20Interest%20Income%20%2F%20Net%20Interest%20Margin) Net interest income increased to $19.8 million from $19.0 million in the prior quarter. The net interest margin improved significantly to 3.15% from 2.90%, primarily due to a 19 basis point reduction in the cost of interest-bearing deposits. The company also redeemed $15.0 million of subordinated notes Net Interest Income & Margin (QoQ) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Interest Income | $19.8M | $19.0M | | Net Interest Margin | 3.15% | 2.90% | - The improvement in NIM was primarily driven by a decline in the cost of deposits, which fell by **19 basis points** from the prior quarter[11](index=11&type=chunk) - The company redeemed its **$15.0 million, 6.0% fixed-to-floating rate subordinated note** on **June 1, 2025**[11](index=11&type=chunk) - A partial redemption of **$10.0 million** of the 2029 subordinated notes was completed on **July 15, 2025**[12](index=12&type=chunk) [Capital](index=3&type=section&id=Capital) Capital ratios improved quarter-over-quarter, with the Bank's tier 1 leverage ratio increasing to 12.89% and the total risk-based capital ratio rising to 18.91%. These levels comfortably exceed the minimums required by the OCC Consent Order. The tangible common equity to tangible total assets ratio also increased to 13.4% Bank Capital Ratios (June 30, 2025 vs March 31, 2025) | Ratio | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 12.89% | 12.33% | | Tier 1 Risk-Based Capital | 17.86% | 16.88% | | Total Risk-Based Capital | 18.91% | 17.93% | - The Bank's capital ratios exceeded the OCC Consent Order minimums of **10.00% for tier 1 leverage** and **13.00% for total risk-based capital**[15](index=15&type=chunk) - The ratio of tangible common stockholders' equity to tangible total assets increased to **13.4%** from **12.5%** at the prior quarter end[15](index=15&type=chunk) [Asset Quality](index=3&type=section&id=Asset%20Quality) Asset quality remained stable, with nonperforming loans decreasing slightly to $24.0 million, or 0.94% of total assets. The company reported a recovery of credit losses of $0.7 million, driven by loan portfolio reductions. Net loan charge-offs were minimal at $0.5 million for the quarter Asset Quality Metrics (QoQ) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Nonperforming Loans | $24.0M (0.94% of assets) | $24.9M (0.93% of assets) | | (Recovery) of Credit Losses | ($0.7M) | $0 | | ACL to Total Loans | 1.11% | 1.12% | | Net Loan Charge-offs | $0.5M | ($0.1M) | [Noninterest Income and Expense](index=4&type=section&id=Noninterest%20Income%20%2F%20Noninterest%20Expense) Noninterest income was stable at $3.2 million, supported by higher service charges on deposit accounts. Noninterest expense decreased by $1.0 million to $22.0 million, mainly due to a recovery related to a former fintech partner, which offset severance costs and new PSA expenses. Headcount was reduced from 351 to 333 during the quarter - Noninterest income was **$3.2 million**, up slightly from **$3.1 million** in Q1, primarily due to higher service charges on deposit accounts[19](index=19&type=chunk) - Noninterest expense decreased by **$1.0 million** to **$22.0 million** compared to Q1 2025. This was mainly due to a recovery of non-credit-related amounts from a former fintech BaaS partner[19](index=19&type=chunk) - Salaries and benefits expense was **$13.0 million**, which included **$0.3 million in severance** and **$2.0 million in PSA expense**. Excluding these items, the underlying expense declined by **$1.2 million** due to headcount reductions from **351 to 333**[19](index=19&type=chunk) [Income Tax](index=4&type=section&id=Income%20Tax) The company recorded an income tax expense of $0.5 million in Q2 2025, corresponding to an effective tax rate of 27.0%. This is a normalization from the 51.2% effective tax rate in Q1 2025, which was skewed by a favorable adjustment related to state tax rates Income Tax (QoQ) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Income Tax Expense (Benefit) | $0.5M | ($0.5M) | | Effective Tax Rate | 27.0% | 51.2% | - The higher effective tax rate in Q1 2025 was driven by a **$0.3 million favorable adjustment** related to a change in state tax rates[18](index=18&type=chunk) [Income Statement Analysis (YTD and YoY)](index=5&type=section&id=Income%20Statement) For the first six months of 2025, the company achieved net income of $0.9 million, a stark contrast to the $14.3 million loss in the first half of 2024. The improvement was driven by a significant reduction in noninterest expenses, particularly in salaries, consulting, and regulatory remediation, and a recovery of credit losses, which more than offset lower net interest income and noninterest income compared to the prior year - Net interest income for Q2 2025 was **$19.8 million**, down slightly from **$20.1 million** in Q2 2024, due to lower average loan balances[21](index=21&type=chunk) - Noninterest income for Q2 2025 was **$3.2 million**, a significant improvement from **$0.3 million** in Q2 2024. The prior-year period included an **$8.5 million non-cash negative fair value adjustment** on a fintech equity investment[28](index=28&type=chunk) - Noninterest expense for Q2 2025 decreased by **$7.3 million** to **$22.0 million** compared to Q2 2024, reflecting a smaller workforce, completion of regulatory directives, and the transition to a community banking model[29](index=29&type=chunk) - A recovery of credit losses of **$0.7 million** was reported for Q2 2025, compared to a provision of **$3.1 million** in Q2 2024[27](index=27&type=chunk) [Balance Sheet Analysis](index=5&type=section&id=Balance%20Sheet) The company continued to shrink its balance sheet in Q2 2025, with total assets decreasing by $129.6 million to $2.56 billion. This was driven by planned reductions in loans and deposits as the company exits non-core activities. Total deposits fell by $119.2 million to $2.01 billion, including a $43.0 million decline in brokered deposits. Liquidity remains strong, with available sources covering 183.3% of uninsured deposits Key Balance Sheet Items (QoQ) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Total Assets | $2.56 billion | $2.69 billion | | Loans Held for Investment | $1.98 billion | $2.06 billion | | Total Deposits | $2.01 billion | $2.13 billion | - Liquidity sources totaled **$750.0 million**, representing **183.3%** of uninsured deposits as of June 30, 2025[25](index=25&type=chunk) - Brokered deposits declined by **$43.0 million** during the quarter to **$296.1 million**. The company received an extension from the FDIC to accept, renew, or rollover brokered deposits through **December 2025**[33](index=33&type=chunk) [Financial Statements and Other Information](index=7&type=section&id=Financial%20Statements%20and%20Other%20Information) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) This section provides the detailed unaudited consolidated financial statements for Blue Ridge Bankshares, Inc. as of June 30, 2025. It includes the Consolidated Balance Sheets, Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024, a summary of selected quarterly financial data, and a reconciliation of non-GAAP measures - Presents the Consolidated Balance Sheets as of **June 30, 2025**, and **December 31, 2024**[45](index=45&type=chunk) - Presents the Consolidated Statements of Income for the three and six months ended **June 30, 2025**, and **June 30, 2024**[46](index=46&type=chunk)[47](index=47&type=chunk) - Provides a Quarter Summary of Selected Financial Data for the last five quarters and a Reconciliation of Non-GAAP Financial Measures[48](index=48&type=chunk)[49](index=49&type=chunk) [Forward-Looking Statements and Risk Factors](index=8&type=section&id=Forward-Looking%20Statements) The company provides a standard safe harbor statement, cautioning that forward-looking statements are subject to numerous risks and uncertainties. Key risks highlighted include the macroeconomic environment, the ability to comply with the OCC Consent Order, managing fintech relationships, credit quality of the loan portfolio, and maintaining adequate liquidity and capital - The company's performance is subject to risks from the US economy, interest rates, and inflation[40](index=40&type=chunk) - A primary risk is the ability to comply with the **January 24, 2024 Consent Order** with the OCC, including its heightened capital requirements and other restrictions[40](index=40&type=chunk) - Other significant risks include managing the wind-down of fintech partnerships, the credit quality of the loan portfolio, and maintaining adequate liquidity[41](index=41&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures such as tangible book value per common share and the ratio of tangible common equity to tangible total assets to supplement GAAP-based evaluation. Management believes these provide useful information for understanding the company's financial condition. A reconciliation of GAAP to non-GAAP measures is provided at the end of the release - Management uses non-GAAP measures including tangible assets, tangible common equity, tangible book value per common share, and tangible common equity to tangible total assets to supplement its evaluation[37](index=37&type=chunk) - These non-GAAP disclosures are not a substitute for GAAP and may not be comparable to measures presented by other companies[38](index=38&type=chunk) - Reconciliations of GAAP to non-GAAP measures are included at the end of the press release[38](index=38&type=chunk)[49](index=49&type=chunk) ```

Financial Performance - For the quarter ended June 30, 2025, the company reported net income of $1.3 million, or $0.01 per diluted common share, compared to a net loss of $0.4 million for the prior quarter and a net loss of $11.4 million for the same quarter in 2024 [2][8] - For the first half of 2025, the company reported net income of $0.9 million, or $0.01 per diluted common share, compared to a net loss of $14.3 million for the first half of 2024 [3] Revenue and Expenses - Net interest income totaled $19.8 million for the second quarter of 2025, an increase from $19.0 million in the first quarter [12][16] - Noninterest income was $3.2 million for the second quarter of 2025, compared to $3.1 million in the prior quarter [22][26] - Noninterest expense decreased to $22.0 million for the second quarter of 2025, down from $23.0 million in the first quarter [23][26] Operational Improvements - The net interest margin improved to 3.15% for the second quarter of 2025, up from 2.90% in the prior quarter, primarily due to lower funding costs [20][19] - The company has made significant progress in reducing noninterest expenses, with a focus on operational improvements and regulatory remediation [5][6] Capital and Asset Quality - The ratio of tangible common stockholders' equity to tangible total assets increased to 13.4% at the end of the second quarter of 2025, compared to 12.5% at the prior quarter end [12] - Nonperforming loans were $24.0 million, or 0.94% of total assets, at quarter end, a slight decrease from $24.9 million, or 0.93% of total assets, in the prior quarter [11] Strategic Initiatives - The company completed the sale of its mortgage division, Monarch Mortgage, resulting in a $0.2 million loss, which was reported in other noninterest income [7] - The company is transitioning to a more traditional community banking model, focusing on growing its community bank after significant remediation efforts [6][29]

Core Viewpoint - Zacks Investment Research has initiated coverage of Blue Ridge Bankshares, Inc. (BRBS) with an "Outperform" recommendation, indicating a positive outlook on the company's recovery and cost management efforts [1] Company Overview - Blue Ridge Bankshares, based in Richmond, VA, operates as a bank holding company providing a range of services including commercial and consumer banking, mortgage lending, and investment services through its subsidiary, Blue Ridge Bank, National Association, and BRB Financial Group, Inc. As of December 31, 2024, BRBS had 27 full-service branches in Virginia and central North Carolina [2] Financial Health - The capital profile of Blue Ridge Bankshares has improved significantly due to equity raises and balance sheet adjustments, with tangible common equity at 12.5% and a total risk-based capital ratio of 20.83%, exceeding regulatory requirements [3] - The company has achieved a nearly $10 million year-over-year reduction in non-interest expenses and is focusing on community banking by exiting non-core business lines, which is expected to drive future growth [4] Operational Performance - Blue Ridge Bankshares has seen a rebound in its net interest margin, which increased to 2.90% from 2.75% the previous year, alongside strong liquidity, with available resources covering over 180% of uninsured deposits [4] - The stock has outperformed industry peers and the broader market over the past year, reflecting recognition of the company's operational improvements and enhanced fundamentals [6] Market Positioning - The modest market capitalization of Blue Ridge Bankshares is $358.3 million, and the company is positioned in a promising yet risky segment of the market, with ongoing regulatory and profitability challenges [7]

[PART I: FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Blue Ridge Bankshares, Inc. as of March 31, 2025, and for the three-month period then ended [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $2.69 billion, a decrease from $2.74 billion at year-end 2024, primarily due to a reduction in loans held for investment Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,685,084** | **$2,737,260** | | Loans held for investment, net | $2,036,584 | $2,088,774 | | Securities available for sale | $325,401 | $312,035 | | **Total Liabilities** | **$2,346,795** | **$2,409,472** | | Total deposits | $2,129,477 | $2,179,442 | | FHLB borrowings | $150,000 | $150,000 | | **Total Stockholders' Equity** | **$338,289** | **$327,788** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, the company reported a net loss of $0.43 million, a significant improvement from the $2.89 million net loss in the same period of 2024 Quarterly Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $18,990 | $20,349 | | Total Noninterest Income | $3,072 | $7,788 | | Total Noninterest Expense | $22,951 | $32,437 | | Loss Before Income Taxes | $(889) | $(3,300) | | **Net Loss** | **$(434)** | **$(2,893)** | | **Basic and Diluted Loss Per Share** | **$(0.01)** | **$(0.15)** | [Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) The company recorded comprehensive income of $3.37 million for Q1 2025, a stark contrast to the comprehensive loss of $5.45 million in Q1 2024 Comprehensive (Loss) Income (in thousands) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(434) | $(2,893) | | Other Comprehensive Income (Loss), net of tax | $3,806 | $(2,558) | | **Comprehensive Net Income (Loss)** | **$3,372** | **$(5,451)** | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased from $327.8 million at the beginning of the period to $338.3 million at the end of Q1 2025 - Key drivers for the change in stockholders' equity in Q1 2025 were the exercise of **2,762,000 warrants** for common stock, generating **$6.9 million**, and a **$3.8 million** increase from other comprehensive income[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2025, cash used in operating activities was $3.6 million, cash provided by investing activities was $43.3 million, and cash used in financing activities was $43.0 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(3,588) | $(7,518) | | Net Cash Provided by Investing Activities | $43,254 | $44,724 | | Net Cash Used in Financing Activities | $(43,025) | $(30,159) | | **Net (Decrease) Increase in Cash** | **$(3,359)** | **$7,047** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, significant events, and compliance with the OCC Consent Order, covering key financial components and legal matters - On March 27, 2025, the Company completed the sale of its mortgage division, Monarch Mortgage, resulting in a **$0.2 million loss** reported in other noninterest income[20](index=20&type=chunk) - The Bank is subject to a consent order with the OCC from January 24, 2024, which requires it to maintain a leverage ratio of **10.0%** and a total capital ratio of **13.0%**. The Bank was in compliance with these ratios as of March 31, 2025[26](index=26&type=chunk) - In Q2 2024, the Company raised **$152.1 million** in net proceeds from private placements of common and preferred stock. During Q1 2025, **2,762,000 warrants** were exercised, leaving **28,689,999** outstanding[22](index=22&type=chunk)[25](index=25&type=chunk) - The company is involved in a putative class action lawsuit, for which it has agreed in principle to a settlement of **$2.5 million**, expected to be covered by insurance less a deductible[120](index=120&type=chunk)[121](index=121&type=chunk) - Subsequent to the quarter end, the Company provided a notice to redeem its **$15 million 2030 Note** and granted **3,400,000 performance-based stock awards** to executive officers[122](index=122&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results, highlighting improved net loss in Q1 2025 due to reduced noninterest expenses and compliance with regulatory capital requirements [Comparison of Financial Condition](index=34&type=section&id=Comparison%20of%20Financial%20Condition) Total assets decreased by $52.2 million to $2.69 billion at March 31, 2025, mainly due to a $52.1 million decline in loans held for investment Key Balance Sheet Changes (Q1 2025 vs YE 2024) | Account | Change (in millions) | Reason | | :--- | :--- | :--- | | Total Assets | $(52.2) | Decline in loans held for investment | | Total Deposits | $(50.0) | $63.4M decrease in brokered time deposits | | Stockholders' Equity | $10.5 | $6.9M from warrant exercises & $3.8M decrease in AOCI loss | [Results of Operations](index=34&type=section&id=Results%20of%20Operations) The company's net loss narrowed to $0.4 million in Q1 2025 from $2.9 million in Q1 2024, driven by a significant reduction in noninterest expense - Net interest margin improved to **2.90%** in Q1 2025 from **2.75%** in Q1 2024, despite a **$1.4 million** decline in net interest income[153](index=153&type=chunk) - No provision for credit losses was recorded in Q1 2025, compared to a **$1.0 million recovery** in Q1 2024[154](index=154&type=chunk) - Noninterest expense decreased by **$9.5 million (29.2%)** YoY, driven by a **$3.4 million** reduction in salaries and benefits and the elimination of **$2.6 million** in regulatory remediation costs[159](index=159&type=chunk) - The effective income tax rate was **51.2%** in Q1 2025, significantly higher than **12.3%** in Q1 2024, primarily due to a favorable adjustment related to a change in the state tax rate applied to unrealized securities losses[160](index=160&type=chunk) [Loan Portfolio and Credit Quality](index=37&type=section&id=Loan%20Portfolio%20and%20Credit%20Quality) Gross loans held for investment decreased to $2.06 billion as of March 31, 2025, with nonperforming assets remaining stable at 0.94% of total assets Nonperforming Assets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total nonperforming loans | $24,881 | $25,443 | | Total nonperforming assets | $25,160 | $25,722 | | ACL to loans held for investment | 1.12% | 1.09% | | Nonperforming assets to total assets | 0.94% | 0.94% | - The company is managing heightened risk in its Commercial Real Estate (CRE) portfolio due to the higher interest rate environment, with specific monitoring of office loans and concentration limits by property type[164](index=164&type=chunk)[166](index=166&type=chunk) [Deposits and Borrowings](index=41&type=section&id=Deposits%20and%20Borrowings) Total deposits decreased by $50.0 million in Q1 2025 to $2.13 billion, driven by a reduction in brokered deposits, while borrowings remained stable - Brokered deposits decreased to **$339.1 million (15.9% of total deposits)** from **$402.5 million (18.5%)** at year-end 2024, with the company expecting to reduce this level to **10% or less** of total deposits[185](index=185&type=chunk)[189](index=189&type=chunk) - Fintech-related deposits have been substantially reduced to **$14.4 million** as of March 31, 2025, following the exit of BaaS deposit operations in late 2024[184](index=184&type=chunk) - Subsequent to quarter-end, the company received regulatory non-objection to redeem a significant portion of its subordinated debt, which is expected to save over **$2 million** in annual interest expense[192](index=192&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $788.8 million in available sources, and capital ratios remain well above regulatory minimums and OCC Consent Order requirements Available Liquidity as of March 31, 2025 (in thousands) | Source | Available Balance | | :--- | :--- | | Cash, Fed Funds, Unpledged Securities | $323,064 | | FHLB/FRB/Other Borrowing Capacity | $465,770 | | **Total Available Liquidity** | **$788,834** | Bank Capital Ratios vs. Consent Order Minimums (March 31, 2025) | Ratio | Actual | Minimum Required | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 12.33% | 10.00% | | Total Risk-Based Capital Ratio | 17.93% | 13.00% | - While subject to the Consent Order, the Bank is deemed 'adequately capitalized' rather than 'well capitalized', which restricts its ability to accept brokered deposits without a waiver from the FDIC[197](index=197&type=chunk)[205](index=205&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk through its ALCO using a net interest income simulation model, showing asset-sensitivity in rising rates and liability-sensitivity in falling rates Net Interest Income Sensitivity Analysis (Year 1 - as of March 31, 2025) | Rate Shock Scenario | Change in NII ($ thousands) | Change in NII (%) | | :--- | :--- | :--- | | +200 bps | $2,662 | 3.1% | | +100 bps | $1,698 | 2.0% | | **Base Case** | **-** | **-** | | -100 bps | $(2,919) | (3.4%) | | -200 bps | $(6,458) | (7.4%) | [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[223](index=223&type=chunk) - There were no changes in the Company's internal control over financial reporting during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, these controls[224](index=224&type=chunk) [PART II: OTHER INFORMATION](index=48&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to ordinary course legal proceedings which are not expected to have a material adverse effect - For detailed information regarding legal proceedings, refer to Note 11 of the unaudited consolidated financial statements[226](index=226&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have been made to the risk factors disclosed in the 2024 Form 10-K[227](index=227&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[228](index=228&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) During the quarter ended March 31, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or other non-Rule 10b5-1 trading arrangement during the fiscal quarter[228](index=228&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Filed exhibits include CEO and CFO certifications pursuant to Rule 13(a)-14(a) and 18 U.S.C. Section 1350, as well as XBRL data files[229](index=229&type=chunk)