Blue Ridge Pre-Provision Income Rises After Hydroponic Charge-Off

The Tip Desk · October 26, 2026 · 3 min read

Adjusted pre-tax earnings were $5.3 million in the third quarter as net interest income reached $17.4 million and net interest margin widened 17 bps.

Blue Ridge Bankshares (BRBS), the Richmond holding company of Blue Ridge Bank, National Association, reported a net loss of $4.2 million, or ($0.05) a share, for the quarter ended September 30, 2026, after a $9.9 million charge-off on a legacy out-of-market hydroponic-farming relationship and $1.2 million of merger-related expenses.

The loss followed a $1.3 million net loss, or ($0.01) a share, in the second quarter. The year-earlier third quarter had produced net income of $5.6 million, or $0.06 a share. The company said the 2026 credit-loss provisions were primarily due to loans from that single relationship, originated before 2024 by its former government-guaranteed lending team. Remaining balances on the borrower were about $1.5 million at quarter-end.

Excluding merger-related and severance expenses, pre-tax, pre-provision income improved to $5.3 million from $2.9 million in the second quarter, an increase of about 85%. Interim President and Chief Executive Officer Harry Golliday said the quarter reflected continued improvements in loan growth, loan yields, deposit mix and expense discipline after the regulatory consent order was lifted in late 2025.

Net interest income was $17.4 million, up $0.9 million from $16.5 million. Interest income rose $0.5 million on higher yields and higher average balances of loans held for investment; average loan balances increased $44.8 million. Interest expense fell $0.3 million, primarily on lower-cost time deposits, including brokered deposits. Net interest margin was 3.08%, up 17 basis points. Loan yields were 5.64%, with 6 basis points of accretion on acquired loans. Cost of deposits declined 3 bps to 2.22% and cost of funds 6 bps to 2.35%; 4 bps of that funds-cost decline came from recognizing an unamortized purchase-accounting adjustment when the company redeemed its 2029 subordinated notes.

Loans held for investment were $1.89 billion at September 30, up $33.1 million from June 30. The company said the increase was primarily residential mortgages purchased from a third-party originator under an adjustable-rate program. Total assets were $2.34 billion.

Total deposits were $1.81 billion. Brokered deposits were $156.9 million, or 8.6% of total deposits. Excluding brokered deposits, total deposits fell $19.2 million, with time deposits down $29.9 million and money-market accounts up $20.3 million. Noninterest-bearing deposits were 21.4% of total deposits. On July 15 the company redeemed the remaining $14.7 million of 2029 notes and had no outstanding subordinated notes. FHLB borrowings rose $86.0 million to $236.0 million.

Noninterest income was $2.6 million. Noninterest expense was $15.9 million, matching the second quarter; lower salaries and benefits of $1.1 million were offset by merger-related expenses. Headcount was 255.

Provision for credit losses on loans was $8.0 million. Net loan charge-offs were $10.3 million, of which $9.9 million related to the hydroponic borrower; the annualized charge-off ratio was 2.20%. Nonperforming loans were $24.9 million, or 1.07% of assets. The allowance for credit losses was 1.05% of loans held for investment.

The company and HomeTrust Bancshares announced a definitive merger on August 17, 2026, under which Blue Ridge and the Bank would merge into HomeTrust and HomeTrust Bank. Pending required approvals, including shareholder votes, the deal is anticipated to close in the first quarter of 2027.

Tangible common equity to tangible assets was 11.4%, and tangible book value was $3.00 a share. Tier 1 leverage was 11.25%; total risk-based capital was 15.96%. Stockholders’ equity was $267.6 million.