Blue Ridge Bankshares in Charlottesville, Va., reported a large quarterly loss, suspended its dividend and announced plans to restate several quarters of financial results.
The $3.3 billion-asset Blue Ridge said in a press release that it lost $41.4 million in the third quarter, largely reflecting a $26.8 million goodwill impairment charge that was “driven by the pressure” on the company’s stock price.
The results also included a $6 million settlement reserve for litigation tied to Blue Ridge’s 2019 purchase of Virginia Community Bankshares.
The company disclosed in a separate regulatory filing that it decided to suspend its common stock dividend “until further notice … based on the desire to preserve capital.”
Finally, Blue Ridge said it will restate financial results for 2022 and the first half of this year after determining that it misclassified certain specialty finance loans that were placed on nonaccrual status. Overall, the restatements should result in a $2.6 million cumulative increase in net income.
Blue Ridge said it conducted two external reviews of its specialty finance portfolio which revealed no additional problematic loans. The company also formed a credit policy and risk committee to draft a new credit policy. It also began institutionalizing a new philosophy around loan portfolio management.
“My focus since coming on board at Blue Ridge has been to ensure we are driving enhanced oversight, rigor and portfolio refinement into our operations so we can take better advantage of our inherent strengths and the opportunities before us,” Billy Beale, the company’s president and CEO, said in the release.
“These focus areas involve our ongoing regulatory remediation efforts related to our fintech operations, as well as further advancing our team’s review of and controls over our loan portfolio and its risk profile,” Beale added.
Prior to Beale’s arrival, Blue Ridge entered into an agreement with the Office of the Comptroller of the Currency to tighten up its oversight of its fintech partnerships.
The company said it is making progress, having completed its Bank Secrecy Act look-back requirement and by closing Banking-as-a-Service accounts that were inactive or lacked proper documentation. Blue Ridge also said it had developed a strategic road map for refining and rationalizing its fintech/BaaS line of business.
Blue Ridge incurred $3.8 million of remediation costs in the third quarter tied to the order, an increase from $2.4 million a quarter earlier.
“Fintech remains an important focus for Blue Ridge and I’m confident that our ongoing work with our primary regulator will enhance our position in how we serve this market,” Beale said.