Blue Ridge in Va. reports loss after issues with government-backed loans

Blue Ridge Bankshares in Charlottesville, Va., slipped back into the red after a problematic loan came to light.

The $2.3 billion-asset company said in a press release that it lost $200,000 in the second quarter, reversing an $800,000 profit from a quarter earlier. The net loss included an after-tax $2.1 million loan-loss provision.

Blue Ridge said that $11.4 million of loans from a single out-of-market relationship originated before 2024 by the former government-guaranteed lending team were placed on nonaccrual, and a $1.2 million after-tax reserve was created.

The quarterly loss also reflected $300,000 of after-tax expenses tied to severance. 

“After a couple years of de-risking the balance sheet and returning our focus 100% to our community banking customers and prospects, I am pleased to report a 4% annualized loan growth rate for the second quarter,” Harry Golliday, the company’s interim president and CEO, said in the release. “In addition, results of this quarters’ expense reduction actions will be realized in the second half of 2026.”

Nonperforming loans totaled $31.2 million, an increase from $21 million in the first quarter. The increase primarily reflects the out-of-market loans.