Blue Ridge Bankshares, Inc. Announces Third Quarter Earnings | State

CHARLOTTESVILLE, Va., Oct. 28, 2020 /PRNewswire/ — Blue Ridge Bankshares, Inc. (the “Company”) (NYSE American: BRBS) announced today its third quarter 2020 net income of $5.1 million, or $0.88 earnings per share, compared to $6.2 million, or $1.10 earnings per share, for the quarterly period ended June 30, 2020, and $1.3 million, or $0.29 earnings per share, for the quarterly period ended September 30, 2019.  Earnings for the third quarter of 2020 include approximately $1.1 million in one-time expenses related to the proposed merger with Bay Banks of Virginia, Inc. (“Bay Banks”) (OTCQB: BAYK).  The Company continues to experience record quarterly earnings, largely attributable to its mortgage division and the increased loan volumes.  The Company also continued to recognize Paycheck Protection Program (“PPP”) loan processing fees over the expected loan lives throughout the third quarter, which was largely offset by increased loan loss provisioning due to the uncertainty surrounding COVID-19 and its long-term economic impact.  Additionally, the Company was pleased to declare a third quarter 2020 dividend of $0.1425 per share, payable on October 30, 2020 to shareholders of record as of the close of business on October 22, 2020.

“Our team continues to proactively serve our clients and communities with unparalleled dedication,” said Brian K. Plum, President and Chief Executive Officer.  “The ongoing combination of Paycheck Protection Program fee accretion and a historically strong mortgage market has enabled us to achieve record earnings while funding our loan loss provision at meaningful levels.”

“We remain vigilantly engaged on the loan portfolio and maintain an open line of communication with borrowers as we work through the fallout of COVID-19 together,” Plum added.  “While the overall economic recovery this year has been strong and deferrals have significantly fallen, we recognize that many borrowers continue to struggle and will do so for the foreseeable future in an uncertain environment.  We anticipate these conditions will contribute to a deterioration of asset quality in coming quarters.”

Proposed Merger

On August 13, 2020, the Company announced the signing of a definitive merger agreement with Bay Banks, pursuant to which the companies will combine in an all-stock merger with the Company as the surviving company. At or immediately following consummation of the merger, Virginia Commonwealth Bank, the wholly-owned commercial banking subsidiary of Bay Banks, will be merged with and into Blue Ridge Bank, National Association (the “Bank”), the wholly-owned commercial banking subsidiary of Blue Ridge, with the Bank as the surviving bank.

Paycheck Protection Program

The Company funded over 2,400 PPP loans totaling approximately $361 million, as of September 30, 2020.  Estimated PPP processing fees earned by the Company for these loans is approximately $11.5 million.  The Company funded these loans, which have a statutory loan interest rate of 1.00%, using the Federal Reserve Paycheck Protection Program Liquidity Facility (“PPPLF”), which provides 100% funding at a cost of 0.35%.  PPP loans do not count toward bank regulatory capital ratios.  The Company is currently working with PPP borrowers through the forgiveness phase of the program.  As of October 28, 2020, $48.7 million in PPP loans have been submitted and are awaiting full forgiveness. 

COVID-19 Response

The Company resumed normalized branch operations early in the third quarter and continues to follow appropriate hygienic and distancing guidelines.  While branch traffic has steadily improved, the Company believes digital use adoption following COVID-19 will have a meaningful impact on future customer behaviors and business investment decisions.

Asset Quality

Nonperforming loans and loans 90 days or more past due totaled $4.5 million at September 30, 2020, a decrease of $1.7 million, or 27.1%, from June 30, 2020.  The Company’s provision for loan…