BLUE RIDGE BANKSHARES, INC.

Notes to Consolidated Financial Statements (Unaudited)

Note 1 – Organization and Basis of Presentation

Blue Ridge Bankshares, Inc. (the “Company”) conducts its business activities primarily through its wholly-owned subsidiary bank, Blue Ridge Bank, National Association (the “Bank”) and its wealth and trust management subsidiary, BRB Financial Group, Inc. (the “Financial Group”). The Company exists primarily for the purposes of holding the stock of its subsidiaries, the Bank and the Financial Group.

The accompanying unaudited consolidated financial statements of the Company include the accounts of the Bank and the Financial Group and were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. All significant intercompany balances and transactions have been eliminated in consolidation. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

The Company's significant accounting policies are disclosed in Note 2 of the audited financial statements for the year ended December 31, 2024 included in the 2024 Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2024.

Certain amounts presented in the consolidated financial statements of prior periods have been reclassified to conform to current year presentations. The reclassifications had no effect on net income, net income per share, total assets, total liabilities, or stockholders’ equity as previously reported.

Sale of Mortgage Division

On March 27, 2025, the Company completed the previously announced sale of its mortgage division operating as Monarch Mortgage. The sale included the transfer of certain assets and leases and resulted in a $0.2 million loss, reported in other noninterest income. As of June 30, 2025, the Company had closed, funded, and sold the loans that were in process at the time of the sale.

This transaction did not meet the criteria for classification as a discontinued operation under Accounting Standards Codification ("ASC") 205-20, Presentation of Financial Statements – Discontinued Operations, and is therefore reported within continuing operations as of and for all periods stated herein.

Private Placements

In the second quarter of 2024, the Company closed private placements in which it issued and sold shares of its common and preferred stock for gross proceeds of $161.6 million (collectively, the "Private Placements"). In June 2024, the Company’s shareholders approved an amendment to the Company's articles of incorporation authorizing the issuance of additional shares of common stock, thus enabling the conversion of the preferred shares issued in the Private Placements into shares of the Company’s common stock. The conversion occurred on June 28, 2024 and November 7, 2024. Capital proceeds received, net of issuance costs, from the Private Placements totaled $152.1 million. The Private Placements also included the issuance of warrants to purchase common stock at $2.50 per share.

The table below presents information pertaining to warrants to purchase the Company’s common stock as of and for the period stated.

Regulatory Matters

The Bank entered into a consent order with the Office of the Comptroller of the Currency (the "OCC") on January 24, 2024 (the "Consent Order"), which generally incorporates the provisions of the formal written agreement (the "Written Agreement") entered into between the Bank and the OCC on August 29, 2022, as well as adding new provisions. The Written Agreement principally concerned the Bank’s fintech operations and required the Bank to continue enhancing its controls for assessing and managing the third-party, Bank Secrecy Act/Anti-Money Laundering, and information technology risks stemming from its fintech partnerships. The Consent Order adds time frames by which certain of the directives are required, requires the Bank to submit a strategic plan and a capital plan, and places further restrictions on the Company’s fintech operations. The Consent Order also requires the Bank to maintain a leverage ratio of 10.0% and a total capital ratio of 13.0%, referred to as minimum capital ratios. As of June 30, 2025 and December 31, 2024, the Bank’s capital ratios exceeded these minimum capital ratios. The Company believes it has made significant progress towards meeting the requirements of the Consent Order. Complete copies of the Written Agreement and the Consent Order are included as Exhibits 10.9 and 10.10, respectively, to the 2024 Form 10-K.

Recent Accounting Pronouncements (Issued But Not Adopted)

Improvements to Income Tax Disclosures. In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09–Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. This standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The ASU requires prospective application by providing the revised disclosures for the period ending December 31, 2025, and continuing to provide the pre-ASU disclosures for the prior periods, or alternately applying the amendments retrospectively by providing the revised disclosures for all periods presented. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements, but it will result in expanded income tax-related disclosures beginning with its 2025 Form 10-K.

Improvements to Expense Disaggregation Disclosures. In January 2025, the FASB issued ASU 2025-01–Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which amended the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements, but it will result in expanded income statement expense disaggregation disclosures beginning with its financial statements for the year ending December 31, 2027.

Note 2 – Investment Securities and Other Investments

Investment securities classified as available for sale ("AFS") are carried at fair value in the consolidated balance sheets. The following tables present amortized cost, fair values, and gross unrealized gains and losses of investment securities AFS as of the dates stated.

As of June 30, 2025 and December 31, 2024, securities with a fair value of $177.0 million and $268.9 million, respectively, were pledged to secure the Bank’s borrowings facility with the Federal Home Loan Bank of Atlanta ("FHLB").

As of June 30, 2025 and December 31, 2024, securities with fair values of $0 and $16.3 million, respectively, were pledged to secure borrowing capacity with the Federal Reserve Bank of Richmond ("FRB") Discount Window, of which there wereno outstanding advances as of either date.

The following table presents the amortized cost and fair value of securities available for sale by contractual maturity as of the date stated. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following tables present fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates stated. The reference point for determining when securities are in an unrealized loss position is period-end; therefore, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period. Excluded from the tables below were securities whose amortized cost equaled their fair value or were in an unrealized gain position as of the dates stated totaling $18.1 million and $1.1 million, as of June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025 and December 31, 2024, the majority of securities in an unrealized loss position were of investment grade; however, a portion of the portfolio does not have a third-party investment grade available (securities with fair values of $27.3 million and $29.3 million, respectively). These securities were primarily subordinated debt instruments issued by bank holding companies that are classified as corporate bonds in the tables above. The Company evaluated the issuers of these individually, observing that each issuer had strong capital ratios and profitability, thereby indicating limited exposure to asset quality or liquidity issues and resulted in no identifiable credit losses. Contractual cash flows for mortgage backed securities and U.S. Treasury and agencies are guaranteed and/or funded by the U.S. government and government agencies. State and municipal securities showed no indication that the contractual cash flows would not be received when due. The Company does not intend to sell, nor does it believe that it will be required to sell, any of its impaired securities prior to the recovery of the amortized cost. As of June 30, 2025 and December 31, 2024, there was no allowance for credit losses ("ACL") for the Company's securities AFS portfolio. Any impairment that has not been recorded through an ACL is recognized in accumulated other comprehensive income (loss).

Restricted equity investments consisted of stock in the FHLB (carrying value of $9.1 million and $9.4 million as of June 30, 2025 and December 31, 2024, respectively), FRB stock (carrying value of $9.3 million and$9.4 millionat June 30, 2025 and December 31, 2024, respectively), and stock in the Company’s correspondent bank (carrying value of$0.5 million at both June 30, 2025 and December 31, 2024). Restricted equity investments are carried at cost.

The Company has various other equity investments, including an investment in a fintech company and limited partnerships, totaling $4.6 million and$4.8 million as of June 30, 2025 and December 31, 2024, respectively.

The Company also holds other investments, primarily in early-stage focused investment funds, which totaled $20.9 million and $19.4 million as of June 30, 2025 and December 31, 2024, respectively, andare reported in other investments on the consolidated balance sheets.

Note 3 – Loans and ACL

The following table presents the amortized cost of loans held for investment as of the dates stated.

The Company has pledged certain commercial and residential mortgage loans as collateral for borrowings with the FHLB. Loans totaling $749.7 million and $797.7 million were pledged with the FHLB as of June 30, 2025 and December 31, 2024, respectively. Additionally, the Company has pledged certain construction, and commercial and industrial loans totaling $75.1 million and $91.6 million as of June 30, 2025 and December 31, 2024, respectively, as collateral for borrowings with the FRB Discount Window.

The following tables present the aging of the recorded investment of loans held for investment by loan category as of the dates stated.

The following tables present the recorded investment of nonaccrual loans held for investment with and without an ACL by loan category as of the dates stated.

The Company recognized $30 thousand and $148 thousand of interest income on nonaccrual loans during thethree and six months ended June 30, 2025, respectively, compared to $122 thousand and $187 thousand for the same respective periods in 2024.

The following table presents accrued interest receivable by loan type reversed from interest income associated with loans held for investment that were placed on nonaccrual status for the periods stated.

Credit Quality Indicators

The Company segments loans held for investment into risk categories based on relevant information about the expected ability of borrowers to repay debt, such as current financial information, historical payment performance, experience, collateral adequacy, credit documentation, and current economic trends, among other factors. Management assigns loan risk grades by a numerical system as an indication of credit quality of its portfolio of loans held for investment. The Company uses the following definitions for loan risk ratings and periodically evaluates the appropriateness of these ratings across its loan portfolio. Independent third-party loan reviews are performed periodically on the Company's loan portfolio and such reviews validate management's determination of loan risk grades. Bank regulatory agencies also periodically review the Company's loan portfolio, including loan risk grades and may, on occasion, change a grade based on their judgment of the facts at the time of review.

Risk Grade 1 – Strong: This grade is for the strongest of loans. These loans are extended to individuals or businesses where the probability of default is extremely low to the Bank and secured with liquid collateral where the loss given default is unlikely because of the source of repayment such as a lien on a deposit account held at the Bank. Character, credit history, and ability of individuals or company principals are excellent. High liquidity, minimum risk, strong ratios, and low servicing cost are present.

Risk Grade 2 – Minimal: This grade is for loans deemed exceptionally strong. These loans are within established guidelines and where the borrowers have documented significant overall financial strength with consistent and predictable cash flows. These loans have excellent sources of repayment, significant balance sheet liquidity, no significant identifiable risk of collection, and conform in all respects to policy, underwriting standards, and federal and state regulations (no exceptions of any kind). In addition, guarantor support, when provided, is deemed as excellent.

Risk Grade 3 – Acceptable: This grade is for loans deemed strong. These loans have adequate sources of repayment, with a minimal identifiable risk of collection. Generally, loans assigned this risk grade will demonstrate the following characteristics: (1) conformity in all respects with policy, guidelines, underwriting standards, and federal and state regulations (no exceptions of any kind), (2) documented historical cash flow that meets or exceeds required minimum guidelines, or that can be supplemented with verifiable cash flow from other sources, and (3) adequate secondary sources to liquidate the debt. In addition, guarantor support, when provided, is deemed strong.

Risk Grade 4 – Satisfactory: This grade is for satisfactory loans containing more but deemed acceptable risk, and where the borrower is deemed as sound. These loans have adequate sources of repayment, with minimal identifiable risk of collection. Loans assigned with this risk grade will demonstrate the following characteristics: (1) general conformity to the Bank's underwriting requirements, with limited exceptions to policy, product, or underwriting guidelines, and all exceptions noted have documented mitigating factors that offset any additional risk associated with the exceptions noted, (2) documented historical cash flow that meets or exceeds required minimum guidelines, or that can be supplemented with verifiable cash flow from other sources, and (3) adequate secondary sources to liquidate the debt. In addition, guarantor support, when provided, is deemed as satisfactory.

Risk Grade 5 – Watch: This grade is for satisfactory loans containing acceptable but elevated risk. These loans are characterized by borrowers who exhibit signs of financial stress or are experiencing unstable or unfavorable change(s) adversely impacting the current or expected financial condition. The borrower's management is considered to be satisfactory; however, the collateral securing the loan may have decreased in value, the debt service coverage ratio is inconsistent or breakeven but mostly positive, and/or guarantor support, if any, is deemed limited or marginal. Loans classified as Watch warrant additional monitoring by management.

Risk Grade 6 – Special Mention: This grade is for loans that have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the Bank's credit position potentially at a future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Special Mention credits typically do not conform to established guidelines and/or exceptions without mitigating factors, or have emerging weaknesses that may or may not be remedied with the passage of time.

Risk Grade 7 – Substandard: This grade is for loans inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The probability of default is highly likely and may have already occurred. Loans in this category are characterized by deterioration in quality exhibited by any number of well-defined weaknesses requiring corrective action. The weaknesses may include, but are not limited to: (1) current or expected unprofitable operations, (2) inadequate debt service coverage, (3) declining or inadequate liquidity, (4) improper loan structure, (5) questionable or weak repayment sources, and (6) lack of well-defined secondary repayment source. There is a distinct possibility of loss and the Bank will sustain loss if the deficiencies remain uncorrected.

Risk Grade 8 – Doubtful: Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the Bank's position, which can include, but not limited to (1) an injection of capital, (2) alternative financing, and (3) liquidation of assets or the pledging of additional collateral. Doubtful is a temporary grade, where the Bank expects a loss but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is recorded and charged off against the ACL.

Risk Grade 9 – Loss: Loans classified Loss are deemed uncollectible and of such little value that continuance as assets held for investment is no longer warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer charging off the worthless loan, even though partial recovery may occur in the future. Probable loss amounts, either principal or interest, deemed uncollectible are charged off promptly against the ACL.

The following table presents the recorded investment of loans held for investment by internal loan risk grade by year of origination as of June 30, 2025. There were no loans classified as loss (risk grade 9) as of the same date. Also presented are current period gross charge-offs by loan type for the six months ended June 30, 2025.

The following table presents the recorded investment of loans held for investment by internal loan risk grade by year of origination as of December 31, 2024. There were no loans classified as loss (risk grade 9) as of the same date.

The following tables present an analysis of the change in the ACL by loan segment for the periods stated.

There were no material changes to the assumptions, loss factors (both quantitative and qualitative), or reasonable and supportable forecasts used in the estimation of the ACL and the provision for (recovery of) credit losses for loans held for investment as of and for the three and six months ended June 30, 2025.

Excluded from the ACL as of both June 30, 2025 and December 31, 2024 was $10.0 million and $10.7 million of accrued interest attributable to loans held for investment, respectfully, which is included in accrued interest receivable on the consolidated balance sheet.

The following table presents the amortized cost of collateral-dependent loans that are individually evaluated for credit losses as of the dates stated.

Acquired Loans

As of June 30, 2025 and December 31, 2024, the amortized cost of purchased credit deteriorated ("PCD") loans totaled $39.1 million and $43.8 million, respectively, with an estimated ACL of $0.2 million and $0.3 million, respectively. The remaining non-credit discount on PCD loans was $2.5 million and $3.0 million as of June 30, 2025 and December 31, 2024, respectively.

Troubled Loan Modifications

The Company closely monitors the performance of borrowers experiencing financial difficulty and grants certain loan modifications it would otherwise not consider. The Company refers to such loan modifications as troubled loan modifications ("TLMs").

The following table presents the amortized cost of loans designated as TLMs, categorized by loan type and type of concession granted, for the period stated.

During the first quarter of 2025, the borrower of a commercial and industrial loan, which has been on nonaccrual status since the second quarter of 2024, was granted an 18-month term extension and principal deferral, extending the loan's maturity to a total of 72 months. Interest-only payments are due through the extended term, with a principal balloon payment due at the revised maturity date of June 2027. Also in the first quarter of 2025, three loans partially charged off in 2024 to a single borrower were refinanced into a single residential mortgage loan, which included the forgiveness of $40 thousand of accrued interest.

For the three months ended June 30, 2025 and 2024, the Company didnot grant any new TLMs.

The following tables present an aging analysis of the amortized cost of loans designated as TLMs as of the dates stated.

As of June 30, 2025 and December 31, 2024, there wereno unfunded commitments to borrowers with TLMs.

The following table presents the amortized cost of loans designated as TLMs that were modified in the preceding twelve months and had a payment default during the periods stated.

As of June 30, 2025, nine residential mortgage loans with a total amortized cost of $1.6 million were in the process of foreclosure.

Note 4 – Borrowings

FHLB Borrowings

The Bank has a borrowing facility from the FHLB secured by pledged qualifying commercial and residential mortgage loans and securities. The FHLB will lend up to 30% of the Bank’s total assets as of the prior quarter end, subject to certain eligibility requirements, including adequate collateral. The Bank had borrowings from the FHLB totaling $150.0 million at both June 30, 2025 and December 31, 2024. The FHLB borrowings required the Bank to hold $9.1 million and $9.4 million of FHLB stock at June 30, 2025 and December 31, 2024, respectively, which is included in restricted equity investments on the consolidated balance sheets.

At both June 30, 2025 and December 31, 2024, the Bank also had letters of credit outstanding with the FHLB in the amount of $51.2 million, of which $50.0 million was for the purpose of collateral for public deposits with the Treasury Board of the Commonwealth of Virginia as of the same dates. Outstanding letters of credit reduce the available balance of the borrowing facility with the FHLB. At June 30, 2025 and December 31, 2024, the secured facility totaled $583.3 million and $696.0 million, respectively, based on pledged collateral. Available balances on the FHLB credit facility were $382.2 million and $494.9 million as of June 30, 2025 and December 31, 2024, respectively. The decline in the secured capacity of the FHLB credit facility as of June 30, 2025 from the prior year end was primarily due to the release of securities held as collateral.

The following table presents information regarding FHLB advances outstanding as of both June 30, 2025 and December 31, 2024.

At June 30, 2025, 1-4 family residential loans, multi-family residential loans, and commercial real estate loans classified as held for investment with a lendable value of $415.3 million and securities with a lendable value of $168.0 million were pledged for the borrowing facility with the FHLB.

FRB Borrowings

The Company may obtain advances from the FRB through its Discount Window. Advances through the FRB Discount Window are secured by qualifying pledged construction and commercial and industrial loans. The Company had secured borrowing capacity with the FRB Discount Window of $75.1 million and $105.7 million as of June 30, 2025 and December 31, 2024, respectively, of which the Company hadno outstanding advances as of either date.

Other Borrowings

The Company had an unsecured line of credit with a correspondent bank available for overnight borrowing, which totaled$10.0 million as of both June 30, 2025 and December 31, 2024. This line bears interest at the prevailing rates for such loans and is cancelable any time by the correspondent bank. As of both June 30, 2025 and December 31, 2024, the Company had no outstanding advances on this secured line.

Subordinated Notes

The Company had $24.9 million and $39.8 million of subordinated notes, net, outstanding as of June 30, 2025 and December 31, 2024, respectively. Prior to June 1, 2025, the Company's subordinated notes had been comprised of a $15 million issuance in May 2020 maturing June 1, 2030 (the “2030 Note”) and a$25 million issuance in October 2019 maturing October 15, 2029 (the “2029 Notes”).

On June 1, 2025, the Company completed the $15.0 million redemption of the 2030 Note. The interest rate on the 2030 Note was 6.0% up to the redemption date. Interest expense on the 2030 Note was $0.2 million for both thethree months ended June 30, 2025 and 2024, and $0.4 million and $0.5 million for thesix months ended June 30, 2025 and 2024, respectively.

The 2029 Notes bore interest at 5.625% per annum, through October 14, 2024, payable semi-annually in arrears. From October 15, 2024 through October 15, 2029, or up to an early redemption date, the interest rate resets quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Funding Rate plus 433.5 basis points, payable quarterly in arrears. As of June 30, 2025, the 2029 Notes bore an annual interest rate of 8.59%. As of June 30, 2025, the net carrying amount of the 2029 Notes was $24.9 million, inclusive of a $0.4 million purchase accounting adjustment (premium). For the three months ended June 30, 2025 and 2024, the effective interest rate on the 2029 Notes was 7.86% and 5.08%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium). For the six months ended June 30, 2025 and 2024, the effective interest rate on the 2029 Notes was 7.96% and 5.15%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).

Note 5 – Fair Value

The fair value of a financial instrument is the current amount that would be exchanged between willing parties in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.

The three levels of input that may be used to measure fair value are as follows:

The following tables present the balances of financial assets measured at fair value on a recurring basis as of the dates stated.

As of June 30, 2025 and December 31, 2024, one corporate bond totaling $0.5 millionand two corporate bonds totaling $0.8 million, respectively, were reported at their respective amortized cost basis and as Level 3 assets in the fair value hierarchy, as there were no observable market prices for similar investments. For the six months ended June 30, 2025, fair value adjustments to MSR assets totaling $0.1 million were recorded.

The following tables summarize assets that were measured at fair value on a nonrecurring basis as of the dates stated.

The following tables present quantitative information about Level 3 fair value measurements of assets measured on a nonrecurring basis as of the dates stated.

The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated.

Note 6 – Minimum Regulatory Capital Requirements

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. A financial institution's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Pursuant to the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks, banks must hold a capital conservation buffer of 2.50% above the adequately capitalized risk-based capital ratios for all ratios, except the tier 1 leverage ratio. If a banking organization dips into its capital conservation buffer, it is subject to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers. Federal and state banking regulations place certain additional restrictions on dividends paid by the Company.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized; although, these terms are not used to represent overall financial condition. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

In addition to the foregoing capital requirements, the Bank is subject to minimum capital ratios set forth in the Consent Order that are higher than those required for capital adequacy purposes generally. The Bank is required tomaintain a leverage ratio of 10.00% and a total capital ratio of 13.00%. As of June 30, 2025 and December 31, 2024, the Bank met these minimum capital ratios. Until the Consent Order has been lifted, the Bank is deemed to be less than well capitalized, thus adequately capitalized.

The Company adopted ASC 326, Financial Instruments - Credit Losses (referred to herein as "current expected credit losses" or "CECL") effective January 1, 2023. Federal and state banking regulations allow financial institutions to irrevocably elect to phase-in the after-tax cumulative effect adjustment to retained earnings (the "CECL Transitional Amount") over a three-year period. The three-year phase-in of the CECL Transitional Amount to regulatory capital was 25% and 50% in 2023 and 2024, respectively, and is 25% in 2025. The Bank made this irrevocable election effective with its first quarter 2023 call report.

The following tables present the capital ratios to which banks are subject to be adequately and well capitalized, as well as the capital and capital ratios for the Bank as of the dates stated. Adequately capitalized ratios include the conservation buffer, if applicable. The following table also includes the capital adequacy ratios to which bank holding companies are subject. Also presented are the minimum capital ratios set forth in the Consent Order for the Bank and the related capital amounts for both the leverage ratio and the total capital ratio. The CECL Transitional Amount was $8.1 million, of which $6.1 million and $4.1 million reduced the regulatory capital amounts and capital ratios as of June 30, 2025 and December 31, 2024, respectively.

Note 7 – Commitments and Contingencies

In the ordinary course of operations, the Company offers various financial products to its customers to meet their credit and liquidity needs. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and stand-by letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional commitments as it does for on-balance sheet commitments.

Subject to its normal credit standards and risk monitoring procedures, the Company makes contractual commitments to extend credit. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. As of June 30, 2025 and December 31, 2024, the Company had outstanding loan commitments of $273.8 million and $283.2 million, respectively. Of these amounts, $111.4 million and $108.4 million were unconditionally cancelable at the sole discretion of the Company as of the same respective dates.

Conditional commitments are issued by the Company in the form of financial stand-by letters of credit, which guarantee payment to the underlying beneficiary (i.e., third party) if the customer fails to meet its designated financial obligation. As of June 30, 2025 and December 31, 2024, commitments under outstanding financial stand-by letters of credit totaled $13.5 million and $12.5 million, respectively. The credit risk of issuing stand-by letters of credit can be greater than the risk involved in extending loans to customers.

The Company recordedno provision for credit losses for unfunded commitments for either the three months or six months ended June 30, 2025. The reserve for unfunded commitments, which is included in other liabilities on the consolidated balance sheets, was $0.9 million as of both June 30, 2025 and December 31, 2024.

As part of the sale of substantially all of its MSR assets portfolio during 2024, the Company recorded a reserve for estimated putbacks, transition costs, and unearned sales proceeds. The putbacks relate to industry-standard items, including prepayments or early delinquencies of the underlying mortgages, all of which are subject to term limits per the respective sales agreements. The reserve for unearned sales proceeds relates to the Company providing certain documentation to the buyers. During the second quarter of 2025, the Company received $0.3 million of previously unearned sale proceeds, which resulted in a corresponding release of the reserve and was reported as a reduction in other noninterest expense. As of June 30, 2025 and December 31, 2024, the reserve was $1.4 million and $1.8 million, respectively, and was included in other liabilities on the consolidated balance sheet.

The Company has investments in various partnerships and limited liability companies. Pursuant to these investments, the Company commits to an investment amount that may be fulfilled in future periods. At June 30, 2025, the Company had future commitments outstanding totaling $5.6 million related to these investments.

Note 8 – Stock-Based Compensation

The Company has granted restricted stock awards (“time-based RSAs”) to employees and directors, and performance-based restricted stock awards (“PSAs”) to employees, under equity incentive plans that have been approved by the Company's shareholders. Time-based RSAs vest over time and are considered fixed awards as the number of shares and fair value is known at the date of grant. The fair value of the award at the grant date is amortized over the requisite service period, which is generally three years. PSAs vest at the end of a specified period contingent on the Company's achievement of financial goals and are expensed on a straight-line basis over the performance period, with adjustments periodically based on projected achievement of a performance goal.

On April 29, 2025, the Company granted PSAs totaling 3,400,000 shares of common stock to certain executive officers. The vesting of these awards is contingent upon the Company achieving specified profitability thresholds over three one-year performance measurement periods. Stock-based compensation expense, reported as a component of salaries and employee benefits in the consolidated statements of operations, was $2.2 million and $2.3 million for thethree and six months ended June 30, 2025, respectively, compared to $0.3 million and $0.5 million for thethree and six months ended June 30, 2024, respectively.

The following table presents time-based RSA and PSA activity as of the dates and for the periods stated.

Note 9 – Earnings Per Share

The following table shows the calculation of basic and diluted earnings per share ("EPS"), the weighted average number of shares outstanding used in computing EPS, the effect on the weighted average number of shares outstanding of dilutive potential common stock for the periods stated, and the weighted average number of shares excluded from the computation of diluted EPS because their effects would have been anti-dilutive.

Note 10– Segment Reporting

The Chief Operating Decision Maker (the "CODM") evaluates each of the Company's segments based on net income (loss), using segment financial information compiled utilizingthe accounting policies listed in Note 2 of the 2024 Form 10-K. The profitability of the segment helps the CODM evaluate staffing levels, assess available cash for allocation to projects and resources, and make informed decisions on whether the segment's activities should be modified to align with the Company’s overall near- and long-term strategies.

Until March 2025, the Company operated through three reportable business segments: commercial banking, mortgage banking, and holding company activities. The commercial banking business segment makes loans to and generates deposits from individuals and businesses, while offering a wide array of general financial services to its customers. The mortgage banking segment, which operated as Monarch Mortgage and focused on residential mortgage origination and sales activities, was sold in March 2025. The Company has closed, funded, and sold the loans that were in process at the time of the sale; it is therefore presented as a reportable segment for all periods stated for comparative purposes. Activities at the holding company or parent level are primarily associated with investments, borrowings, and certain noninterest expenses.

Information about reportable segments, and reconciliation of such information to the consolidated financial statements follows, as of the dates and periods stated.

Included in other expenses are costs for legal and regulatory filings, audit fees, other contractual services, and other miscellaneous expenses.

The Company had no transactions with a single customer that in the aggregate resulted in revenues exceeding 10% of consolidated total revenues for thethree and six months ended June 30, 2025 and 2024.

Note 11 – Changes to Accumulated Other Comprehensive Income (Loss), net

The following tables present components of accumulated other comprehensive income (loss) for the periods stated.

Note 12 – Legal Matters

In the ordinary course of operations, the Company is party to legal proceedings. Based upon information currently available, management believes that such legal proceedings, in the aggregate and excluding those noted below, will not have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.

On December 20, 2024, a former Deputy Bank Secrecy Act Officer and manager at the Bank filed suit against the Company and the Company’s and the Bank’s Chief Executive Officer, in the Circuit Court of the City of Richmond (Virginia) alleging that she was retaliated against and constructively discharged in violation of the Virginia Whistleblower Protection Act, Va. Code § 40.1-27.3, and Bowman v. State Bank of Keysville, 331 S.E.2d 797 (Va. 1985). On December 30, 2024, the Company removed the matter to the United States District Court for the Eastern District of Virginia, where it subsequently filed a motion to dismiss. On July 18, 2025, the court granted the Company’s motion to dismiss. The Company believes the plaintiff’s claims are without merit and will continue to defend itself vigorously in the matter. The case caption is Porter v. Blue Ridge Bankshares, Inc. (No. 3:24-cv-909 (E.D. Va.)).

On December 5, 2023, an alleged shareholder of the Company commenced a putative class action in the U.S. District Court for the Eastern District of New York (No. 1:23-cv-08944) (Russell Hunter v. Blue Ridge Bankshares, Inc., et al.) on behalf of himself and any persons or entities who purchased the publicly traded stock of the Company between February 3, 2023, and October 31, 2023, both dates inclusive (the “Action”). The complaint alleges violations of federal securities laws against the Company and certain of its current and former officers based on alleged material misstatements and omissions related to accounting judgments in the Company’s filings with the Securities and Exchange Commission. The complaint seeks certification of a class action, unspecified damages, and attorney’s fees. The putative class representative filed an amended complaint, and the Company filed a letter seeking permission to file a motion to dismiss. The parties engaged in non-binding mediation on December 5, 2024, during which the parties agreed in principle to settlement terms for $2.5 million. The Company submitted an insurance claim for this amount, less a deductible that was expensed in 2024. On February 4, 2025, the plaintiff filed an unopposed motion for preliminary approval of the proposed class action settlement, which, if granted, will settle the Action and any claims related to the Action or that could have been brought in the Action by the parties, the parties’ counsel, or settlement class members (the “Motion”). The Motion expressly disclaims any fault, liability, or wrongdoing on the part of the Company. The Company’s outside legal counsel has effected service, pursuant to 28 U.S.C. § 1715, of the Motion and related court filings to the Company’s federal and state regulators as well as to Attorneys General for all U.S. states and territories. On June 6, 2025, the court conducted a preliminary fairness hearing regarding the Motion. On June 11, 2025, the federal magistrate judge recommended that the court grant the Motion. On July 5, 2025, the court adopted the magistrate’s report and recommendation, and on July 25, 2025, the court granted preliminary approval of the settlement, effective July 5, 2025. Also on July 25, 2025, the court set a final settlement approval hearing date of October 29, 2025. On July 29, 2025, the defendants satisfied their payment obligations under the settlement.

Note 13 – Subsequent Events

On June 2, 2025, the Company provided to the holders of its 2029 Notes a notice of partial redemption at the next interest payment date. On July 15, 2025, the Company redeemed $10.0 million of the 2029 Notes.

Subsequent to June 30, 2025, the Company placed a $4.8 million multifamily loan on nonaccrual status. The loan was current as to principal and interest as of July 31, 2025. The Company believes based on the payment performance, strength of the guarantors and value of the collateral that future credit losses, if any, will not be significant to the Company's financial statements.