BLUE RIDGE BANKSHARES, INC.
For the period ended Mar 31, 2026. Filed May 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 5, 2026
BRBS$3.990.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001193125-25-264940
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001193125-26-206547
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 122 current paragraphs.
53 unchanged; 50 reworded; 17 added; 39 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 23 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Special Cash Dividend and Warrants
Current report
On March 30, 2026, the Company announced a special cash dividend of $0.60 per share of the Company's common stock totaling approximately $54.1 million. The dividend was paid on April 27, 2026 to shareholders of record as of the close of business on April 13, 2026. Also on March 30, 2026, the Company announced that the holders of outstanding warrants to purchase the Company's common stock (the "Warrants") representing a majority of shares of common stock underlying such Warrants approved an amendment and restatement of the Warrants (the "Warrant Amendment"). Pursuant to the Warrant Amendment, in connection with certain cash distributions to holders of the Company's common stock while the Warrants are outstanding, the per share exercise price of each Warrant is reduced by the per share dividend amount in lieu of cash distributions to Warrant holders, including the special cash dividends of $0.25 per share paid in November 2025 and $0.60 per share paid in April 2026. The Company had previously accrued $6.1 million for the November 2025 dividend to be paid if and when the Warrants are exercised. As a result of the Warrant Amendment, the $6.1 million accrual was reversed in the first quarter 2026, and upon execution of the amended and restated Warrants, the strike price of the Warrants reduces to $1.65 per common share.
Current report
Total stockholders’ equity decreased by $46.7 million to $277.0 million as of March 31, 2026, from $323.7 million at December 31, 2025, primarily due to the special cash dividend ($54.1 million) announced March 30, 2026, partially offset by a $6.1 million reversal of accrued dividends due to the aforementioned Warrant Amendment.
Current report
2026 relative to the year-ago periods were primarily due to the reduction in brokered deposits and partial redemption of the Company's subordinated notes. Cost of deposits, excluding brokered deposits, was 1.97% for the first quarter of 2026 compared to 2.19% for the first quarter of 2025.
Current report
The Company reported higher service charges on deposit accounts during the three months ended March 31, 2026 compared to 2025, primarily due to the execution of a project in early 2025 to more closely align products and pricing with competitors in the markets in which the Bank operates. The decline in residential mortgage banking income for the same comparative periods was attributable to the sale of the mortgage division late in the first quarter of 2025. The $0.2 million loss on the sale of the mortgage division was included in other noninterest income in the 2025 period. Additionally, the decline in other noninterest income for the 2026 period compared to 2025 was primarily driven by lower income from the Company's other investments.
Current report
Noninterest expense decreased $4.2 million to $18.7 million for the three months ended March 31, 2026, from the same period of 2025. The decline relative to the prior period was primarily due to the termination of the consent order with the Bank's primary regulator, under which the Bank was operating until it was terminated in the fourth quarter of
Current report
Lower expenses resulting from the consent order termination were primarily in salaries and benefits, as the number of full-time employees declined by 70 full-time employees, or approximately 20%, since March 31, 2025, and lower technology costs, other contractual services, audit fees, and Federal Deposit Insurance Corporation ("FDIC") insurance premiums. Included in salaries and employee benefits expense for the three months ended March 31, 2026 and 2025 were executive officer transition and severance costs of $1.7 million and $0.7 million, respectively. The decrease in other noninterest expense in the first quarter 2026 compared to the same period of 2025 was primarily due to lower third-party loan servicing costs and losses on loans previously sold.
Current report
Income Tax Expense. For the three months ended March 31, 2026, the effective income tax rate was 24.9% compared to 51.2% for the three months ended March 31, 2025. The effective income tax rate for the three months ended March 31, 2026 included the effect of limitations on the tax deductibility of certain costs. The higher effective income tax rate in the 2025 period included the effect of a $0.3 million favorable adjustment related to a change in the state tax rate applied to the accumulated unrealized loss on the available for sale securities portfolio.
Current report
The Company has pledged certain qualifying loans as collateral for borrowings. Commercial and residential mortgages totaling $665.7 million and $695.1 million were pledged with the Federal Home Loan Bank of Atlanta ("FHLB") as of March 31, 2026 and December 31, 2025, respectively. The Company pledged as collateral for borrowings with the Federal Reserve Bank of Richmond (“FRB”) Discount Window certain construction and commercial and industrial loans totaling $71.1 million and $72.8 million as of March 31, 2026 and December 31, 2025, respectively.
Current report
Of the $2.3 million and $2.8 million of loan charge-offs for the three months ended March 31, 2026, and 2025, respectively, $1.6 million and $2.0 million for the same respective periods were attributable to business and consumer credit cards originated through a partnership with a third-party company. The third-party provides limited credit loss protection to the Bank, and upon receipt, credits for losses are reported as recoveries. Since the inception of this partnership in early 2023, the Bank has not experienced a credit loss from this arrangement.
Current report
As of March 31, 2026 and December 31, 2025, OREO included a property with a carrying value of $1.3 million that served as collateral for a government guaranteed loan. The guaranteed portion of the loan (90%) is owned by the U.S. Small Business Administration ("SBA"), and the Company is obligated to remit to the SBA its share of the liquidation proceeds upon the sale of the property. Accordingly, the Company recorded a $1.2 million liability, reported in other liabilities on the Company's consolidated balance sheets as both March 31, 2026 and December 31, 2025, representing the SBA's contractual interest in the expected proceeds from the sale of the property.
Current report
The Company had no investment securities classified as held to maturity as of March 31, 2026 or December 31, 2025.
Current report
Deposits, excluding brokered deposits, increased $13.4 million from $1.67 billion as of December 31, 2025 to $1.69 billion as of March 31, 2026; and
Current report
Brokered deposits decreased $31.5 million from $238.7 million, or 12.5% of total deposits, as of December 31, 2025 to $207.2 million, or 10.9% of total deposits, as of March 31, 2026.
Current report
The Company's brokered deposits were issued in denominations of $1 thousand each under master certificates, and therefore are excluded from the table above.
Current report
The decline in the capital amounts and capital ratios for both the Bank and the Company as of March 31, 2026 from December 31, 2025 was primarily a result of the aforementioned special cash dividend declared in the first quarter of 2026.
Current report
The Company's AFS securities portfolio is reported at fair value, with the unrealized gain or loss representing the difference in amortized cost and fair value reported net of tax as a component of shareholders' equity. Changes in market interest rates affect the valuation of the securities portfolio, as market interest rates at reporting dates may differ than those interest rates in effect when the securities were purchased. The Company does not intend to sell, nor does it believe it will be required to sell the AFS securities; therefore, any unrealized gains or losses in the Company's AFS securities portfolio are deemed temporary. Any unrealized gains or losses for individual securities will diminish as the securities reach maturity.
Removed paragraphs (39)
Previous report
the impact of, and the ability to comply with, the terms of the Consent Order, as defined below, with the Office of the Comptroller of the Currency ("OCC"), including the heightened capital requirements and other restrictions therein, and other regulatory directives;
Previous report
the imposition of additional regulatory actions or restrictions for noncompliance with the Consent Order or otherwise;
Previous report
the Company’s ability to manage its fintech relationships, including implementing enhanced controls, complying with the OCC directives and applicable laws and regulations, and managing the final phases of the wind down of these partnerships;
Previous report
changes in consumer spending and savings habits;
Previous report
technological and social media changes;
Previous report
Share Repurchase Program
Previous report
On August 25, 2025, the Company announced the adoption of a share repurchase program (the “Repurchase Program”) pursuant to which the Company may purchase up to $15.0 million of the Company’s common stock.
Previous report
Repurchases may be made in open market purchases, block trades, or privately negotiated transactions, including upon the exercise of outstanding warrants to purchase common stock. The Company cannot predict when or if it will repurchase additional shares of common stock as the Repurchase Program will depend on a number of factors, including constraints specified in any SEC Rule 10b5-1 trading plans, price, and general business and market conditions.
Previous report
During the three months ended September 30, 2025, the Company repurchased 659,949 shares of common stock at a weighted average price of $4.16 per share totaling $2.8 million.
Previous report
For information regarding the Repurchase Program, please see Part II, Item 2 of this Form 10-Q.
Previous report
Sale of Mortgage Division
Previous report
On March 27, 2025, the Company completed the previously announced sale of its mortgage division operating as Monarch Mortgage. The sale, which included the transfer of certain assets and leases, resulted in a $0.2 million loss, primarily due to the write-off of fixed assets and lease impairment, and is reported in other noninterest income.
Previous report
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.
Previous report
Regulatory Matters
Previous report
On January 24, 2024, the Bank consented to the issuance of the Consent Order by the OCC ("Consent Order"). The Consent Order 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 and adds time frames by which certain of the directives are required. 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 September 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, of the 2024 Form 10-K.
Previous report
Private Placements
Previous report
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"). On June 20, 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.
Previous report
Total stockholders’ equity increased by $27.7 million to $355.5 million as of September 30, 2025, from $327.8 million at December 31, 2024, primarily due to additional capital of $9.8 million from the exercise of warrants issued in the Private Placements, a $10.7 million decrease in after-tax unrealized losses in the Company’s portfolio of securities available for sale, and net income for the nine months ended September 30, 2025 of $6.5 million, partially offset by $2.8 million of share repurchases pursuant to the Repurchase Program.
Previous report
Net income for the three and nine months ended September 30, 2025 included $2.3 million and $2.7 million, respectively, of after-tax loan fee income due to the payoff of the Company's largest previously criticized out-of-market loan relationship. In the 2025 periods, the Company received unearned sale proceeds, resulting in an after-tax release of reserves of $0.6 million and $0.8 million for the three and nine months ended September 30, 2025, respectively, which were reported as income on sale of mortgage servicing rights ("MSRs") on the consolidated statements of operations. After-tax severance costs were $0.1 million and $0.9 million for the three and nine months ended September 30, 2025, respectively. After-tax regulatory remediation expenses in connection with the Consent Order for both the three and nine months ended September 30, 2025 were $0, compared to $0.3 million and $3.4 million of after-tax costs incurred for the same respective periods in 2024.
Previous report
Net income for the nine months ended September 30, 2025 also included an after-tax benefit of $1.0 million – primarily the recovery of non-credit-related amounts in the second quarter of 2025 reserved for in the prior year – as the Company concluded outstanding exit activities with a former fintech banking-as-a-service (“BaaS”) partner. The net loss for the nine months ended September 30, 2024 included a second quarter $6.7 million non-cash, after-tax negative fair value adjustment recorded for an equity investment in a fintech company, partially offset by a $6.6 million after-tax recovery of credit losses on a specialty finance loan that was sold in the third quarter of 2024.
Previous report
Interest income for the three and nine months ended September 30, 2025 was $36.2 million and $106.3 million, respectively, representing decreases of $3.0 million and $16.1 million from the same respective periods in 2024. The decline was primarily attributable to lower average balances of loans held for investment, partially offset by realized loan fee income of $3.0 million and $3.5 million recognized in the same respective periods upon the payoff of the aforementioned out-of-market loan. Interest expense was $14.3 million and $45.6 million for the three and nine months ended September 30, 2025, respectively, a decrease of $5.8 million and $17.3 million from the same respective periods in 2024, largely driven by the decline in average balances and costs of interest-bearing deposits.
Previous report
Average balances of interest-earning assets decreased $358.6 million to $2.44 billion for the three months ended September 30, 2025 compared to $2.80 billion for the same period of 2024. Relative to the year-ago period, this decrease reflected primarily lower average balances of loans held for investment. The yield on average loans held for investment was 6.40% and 5.80% for the third quarters of 2025 and 2024, respectively. Fee income realized from the payoff of the aforementioned out-of-market loan positively affected the yield on average loans held for investment by 62 basis points in the 2025 period. Interest income for the three months ended September 30, 2025 and 2024 included accretion of discounts on acquired loans of $0.5 million and $0.3 million, respectively.
Previous report
Average interest-bearing liabilities were $1.82 billion for the nine months ended September 30, 2025 compared to $2.25 billion for the same period of 2024, a $434.5 million decrease. Interest expense decreased by $17.3 million to $45.6 million for the nine months ended September 30, 2025 compared to $62.9 million for the same period of 2024. Cost of interest-bearing liabilities decreased to 3.34% for the nine months ended September 30, 2025 from 3.72% for the same period in 2024, while cost of funds were 2.69% and 3.04% for the same respective periods. Lower cost of funds in the 2025 period was primarily due to the exit of higher cost fintech BaaS deposit operations.
Previous report
Net interest income (on a taxable equivalent basis) was $60.8 million for the nine months ended September 30, 2025 compared to $59.6 million for the same period in 2024. Net interest margin was 3.21% and 2.76% for the first nine months of 2025 and 2024, respectively. Fee income from the aforementioned paid off loan had a positive 18 basis point effect on net interest margin for the nine months ended September 30, 2025.
Previous report
Noninterest income in the nine months ended September 30, 2024 included an $8.5 million non-cash, negative fair value adjustment of an equity investment the Company holds in a fintech company. The declines in mortgage banking income in the three and nine months ended September 30, 2025 compared to the same periods of 2024 were due to the previously mentioned sales of the mortgage division in the first quarter of 2025 and MSR portfolio in the third quarter of 2024. Mortgage servicing income (loss) represents fair value adjustments of MSR assets. Additionally, income on the sale of MSRs in the three and nine months ended September 30, 2025 included $0.7 million and $1.0 million, respectively, of reserves released upon the receipt of additional sales proceeds that were contractually held back from the 2024 sales. Higher service charges on deposits accounts in the 2025 periods compared to the same periods of 2024 were primarily due to the execution of a project to more closely align products and pricing with competitors in the markets in which the Bank operates. The decline in bank owned life insurance income in the 2025 periods compared to the same periods of 2024 was due to the surrender of policies at their cash surrender values in the 2024 periods. The decline in other noninterest income was driven by the decrease in the number of fintech indirect lending relationships, which contributed $0.6 million and $3.5 million of noninterest income in the nine months ended September 30, 2025 and 2024, respectively.
Previous report
Excluding regulatory remediation, noninterest expense decreased $6.1 million and $18.8 million for the three and nine months ended September 30, 2025, respectively, from the same respective periods of 2024. These declines relative to the prior periods were primarily due to lower expenses for salaries and employee benefits, other contractual services, Federal Deposit Insurance Corporation ("FDIC") insurance assessments, audit fees, and other noninterest expense.
Previous report
The decline in salaries and employee benefits in the three and nine months ended September 30, 2025 reflected a reduction in headcount as the Company continues to right-size its workforce, with the completion of certain regulatory directives and the transitioning to a more traditional community banking model. As of September 30, 2025 and 2024, the Company had 311 and 468 employees, respectively. Included in salaries and employee benefits expense for the three and nine months ended September 30, 2025 was $1.0 million and $3.0 million of expense, respectively, for performance-based restricted stock awards relating to 3,400,000 shares of the Company's common stock granted to certain executive officers, which vest contingent upon the Company achieving specified performance thresholds over three one-year measurement periods. There were no such expenses in the 2024 periods. Also included in salaries and employee benefits expense were severance costs of $0.1 million and $1.1 million for the three and nine months ended September 30, 2025, respectively, compared to $0 for the same respective periods in 2024.
Previous report
Lower regulatory remediation costs, audit fees, and other contractual services fees in the 2025 periods compared to the same periods of 2024 reflect a reduction in the use of outside consulting and audit services, also due to the completion of certain regulatory directives. Lower FDIC insurance assessments in the 2025 periods compared to the same periods of 2024 reflect an improved regulatory position and a smaller balance sheet.
Previous report
The decrease in other noninterest expense was partially due to the second quarter of 2025 recovery of non-credit-related amounts reserved for in the prior year, upon the conclusion of exit activities with a former fintech BaaS partner. Also contributing to the decline in other noninterest expense in the 2025 periods compared to the same periods of 2024 were lower mortgage servicing fees due to the 2025 first quarter sale of the mortgage division, in addition to the 2024 periods including $0.9 million of excise taxes related to the surrender of bank owned life insurance policies.
Previous report
Income Tax Expense. For the three and nine months ended September 30, 2025, effective tax rates were 25.3% and 22.9%, respectively, compared to 38.8% and 3.1% for the three and nine months ended September 30, 2024. The effective income tax rates for the three and nine months ended September 30, 2025 reflect the potential limitation on the deductibility of compensation costs in future taxable periods. The higher effective income tax rate for the three months ended September 30, 2024 was primarily attributable to the vesting of restricted stock awards, where the fair value of the underlying stock at the time of vesting was lower than the fair value previously recognized for financial reporting purposes. The lower effective income tax rate for the nine months ended September 30, 2024 was primarily attributable to $2.0 million of tax expense recognized in the second quarter of 2024 upon surrendering bank owned life insurance policies. Taxes on such earnings were previously permanently deferred but became subject to tax upon the surrender of the policies.
Previous report
The increase in nonperforming loans since December 31, 2024 was primarily attributable to a $4.7 million multifamily loan that was placed on nonaccrual status in the third quarter of 2025. The loan was current as to principal and interest as of September 30, 2025, and based on the payment performance, strength of the guarantors, and value of the collateral, the Company believes that future credit losses, if any, will not be significant.
Previous report
In prior years, deposits sourced through fintech partnerships, inclusive of fintech BaaS deposits, were a significant source of deposits for the Company. In the fourth quarter of 2024, the Company completed the exit of its fintech BaaS deposit operations, thus substantially reducing its fintech-related deposit exposure to approximately 1.0% of deposits as of December 31, 2024. As of September 30, 2025 and December 31, 2024, fintech-related deposits totaled $4.7 million and $21.3 million, respectively.
Previous report
Deposits, excluding fintech-related and brokered deposits, decreased $77.1 million from approximately $1.76 billion as of December 31, 2024 to approximately $1.68 billion as of September 30, 2025;
Previous report
Brokered deposits decreased $134.6 million from approximately $402.5 million, or 18.5% of total deposits, as of December 31, 2024 to approximately $267.9 million, or 13.7% of total deposits, as of September 30, 2025; and
Previous report
Fintech-related deposits decreased $16.6 million from approximately $21.3 million as of December 31, 2024 to approximately $4.7 million as of September 30, 2025. Remaining fintech-related deposits as of September 30, 2025 included funds in the process of escheatment or distribution to customers, fintech partner corporate operating accounts, and fintech partner corporate accounts held as reserves.
Previous report
While subject to the Consent Order, the Bank may not be deemed to be “well capitalized,” which restricts it from accepting, renewing, or rolling over brokered deposits except in compliance with certain applicable restrictions under federal law. Since the third quarter of 2024, the Bank has received approvals from the FDIC allowing the Bank to accept, renew, or rollover brokered deposits for consecutive six-month periods through December 2025 and limited to the amount of maturities during these periods. The Company expects to continue to seek waivers of this prohibition in the future; however, there is no assurance that such waivers will be approved or that the Company will be able to rely on brokered deposits as a source of funding in the future.
Previous report
The Consent Order requires the Bank to achieve and maintain minimum capital requirements that are higher than those required for capital adequacy purposes. Specifically, the Bank is required to maintain a leverage ratio of 10.0% and a total capital ratio of 13.0%. As of September 30, 2025 and December 31, 2024, the Bank met these minimum capital ratios. Until the Bank has been released from the Consent Order, the Bank is deemed to be less than well capitalized, thus adequately capitalized.
Previous report
Because the Bank may not be deemed to be “well capitalized” while subject to the Consent Order, it could be required to pay higher insurance premiums to the FDIC, obtain approval prior to acquiring branches or opening new lines of business, and be subject to increased regulatory scrutiny such as limitations on asset growth.
Previous report
As part of the sale of substantially all of its MSR portfolio during 2024, the Company recorded a reserve for estimated putbacks, transition costs, and unearned sales proceeds. The putbacks related to industry-standard items, including prepayments or early delinquencies of the underlying mortgages, all of which were subject to term limits per the respective sales agreements. As of September 30, 2025, all such term limits have expired. The reserve for unearned sales proceeds relates to the Company providing certain documentation to the buyers. In the three and nine months ended September 30, 2025, the Company received $0.7 million and $1.0 million, respectively, of previously unearned sale proceeds, which resulted in a corresponding release of the reserve and were reported as income on sale of MSRs on the consolidated statements of operations. As of September 30, 2025 and December 31, 2024, the reserve was $0.6 million and $1.8 million, respectively, and was included in other liabilities on the consolidated balance sheet.
Reworded paragraphs (50)
Previous wording
The following presents management’s discussion and analysis of the Company’s consolidated financial condition and the results of the Company's operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the notes thereto included in this Form 10-Q and the audited consolidated financial statements and the 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”). Results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations for the balance of 2025, or for any other period. As used in this report, the terms “the Company,” “we,” “us,” and “our” refer to Blue Ridge Bankshares, Inc. and its consolidated subsidiaries. The term “Bank” refers to Blue Ridge Bank, National Association.
Current wording
The following presents management’s discussion and analysis of the Company’s consolidated financial condition and the results of the Company's operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the notes thereto included in this Form 10-Q and the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the“2025 Form 10-K”). Results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations for the balance of 2026, or for any other period. As used in this report, the terms “the Company,” “we,” “us,” and “our” refer to Blue Ridge Bankshares, Inc. and its consolidated subsidiaries. The term “Bank” refers to Blue Ridge Bank, National Association.
Previous wording
The Company makes certain forward-looking statements in this Form 10-Q that are subject to risks and uncertainties. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of management’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on management’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond its control. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.
Current wording
The Company makes certain forward-looking statements in this Form 10-Q that are subject to risks and uncertainties. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of management’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words of similar meaning. The Company cautions that the forward-looking statements are based largely on management’s expectations and are subject to a number of known and unknown risks and uncertainties that may change based on factors which are, in many instances, beyond its control. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.
Previous wording
the ability to maintain adequate liquidity by growing and retaining deposits and secondary funding sources, especially if the Company's or its industry's reputation become damaged;
Current wording
the ability to maintain adequate liquidity by growing and retaining deposits and secondary funding sources, especially if the Company's or its industry's reputation becomes damaged;
Previous wording
The emergence of digital assets and payment stablecoins, and evolving legislative or regulatory frameworks, may alter deposit flows, competition, and credit intermediation. Changes or gaps in these emerging rules could adversely affect the Company’s funding, liquidity, or overall financial performance;
Current wording
the emergence of digital assets and payment stablecoins, and evolving legislative or regulatory frameworks, which could alter deposit flows, competition, and credit intermediation and, in turn, adversely affect the Company’s funding, liquidity, or overall financial performance;
Previous wording
the ability to maintain capital levels adequate to support the Company's business and to comply with the Consent Order directives;
Current wording
the ability to maintain capital levels adequate to support the Company's business;
Previous wording
the timely development of competitive products and services and the acceptance of these products and services by new and existing customers;
Current wording
the usage of advances and changes in technological and social media to develop timely and competitive products and services, and the acceptance of these products and services by new and existing customers;
Previous wording
the impact of changes in financial services policies, laws, and regulations, including laws, regulations, and policies concerning taxes, banking, securities, real estate and insurance, the application thereof by bank regulatory bodies, and the three branches of the federal government;
Current wording
the impact of changes in financial services policies, laws, and regulations, including laws, regulations, and policies concerning taxes, banking, securities, real estate and insurance, and the application thereof by bank regulatory bodies and the three branches of the federal government;
Previous wording
the Company’s involvement in, and the outcome of, any litigation, legal proceedings, or enforcement actions that may be instituted against the Company;
Current wording
the Company’s involvement in, and the outcome of, any litigation, legal proceedings, or enforcement actions that may be instituted against the Company; and
Previous wording
The table below presents information pertaining to warrants to purchase the Company’s common stock as of and for the period stated.
Current wording
The table below presents information pertaining to the Warrants as of and for the period stated.
Previous wording
Total assets were $2.50 billion as of September 30, 2025, a decrease of $240.3 million from $2.74 billion as of December 31, 2024. Most of this decrease was attributable to a decline in loans held for investment, which decreased $199.1 million to $1.91 billion as of September 30, 2025, from $2.11 billion as of December 31, 2024. Of the decline in loans held for investment, $83.9 million was due to a continuation of the Company's actions beginning in 2024 to purposefully and selectively reduce balances of loans where borrowers did not represent in-market relationships. The allowance for credit losses ("ACL") was $20.5 million and $23.0 million as of September 30, 2025 and December 31, 2024, respectively.
Current wording
Total assets were $2.41 billion as of March 31, 2026, a decrease of $18.5 million from $2.43 billion as of December 31, 2025. Most of this decrease was attributable to a $31.8 million decline in loans held for investment and a $14.8 million decline in loans held for sale, partially offset by an increase in cash and due from banks, which increased $30.7 million from December 31, 2025. Included in the reduction of loans held for investment in the first quarter of 2026 were payoffs and paydowns of $24.1 million of out-of-market loans. The decline in loans held for sale reflects the Company's complete exit from its indirect fintech lending activities in the first quarter. The allowance for credit losses ("ACL") was $19.2 million and $19.4 million as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
Total deposits were $1.95 billion as of September 30, 2025, a net decrease of $228.4 million from December 31, 2024. The decline in the first nine months of 2025 was primarily due to a $134.6 million decrease in brokered time deposits.
Current wording
Total deposits were $1.89 billion as of March 31, 2026, a net decrease of $18.1 million from December 31, 2025. The decline in the first quarter of 2026 was primarily due to a $31.5 million decrease in brokered time deposits. Excluding the decline in brokered deposits, deposits increased $13.4 million in the first quarter of 2026.
Previous wording
Comparison of Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024
Current wording
Comparison of Results of Operations for the Three Months Ended March 31, 2026 and 2025
Previous wording
For the three months ended September 30, 2025, the Company reported net income of $5.6 million, or $0.06 per diluted common share, compared to net income of $0.9 million, or $0.01 per diluted common share, for the same period of 2024.
Current wording
For the three months ended March 31, 2026, the Company reported net income of $0.8 million, or $0.01 per diluted common share, compared to net loss of $0.4 million, or ($0.01) per diluted common share, for the same period of 2025. Net income for the first quarter of 2026 included after-tax expenses of $1.3 million related to the transition of executive officers. Net income for the first quarter of 2026 when excluding these transition expenses was $2.1 million, or $0.02 per diluted common share. Net loss for the first quarter of 2025 included after-tax severance costs of $0.5 million and an after-tax $0.2 million loss on the sale of the mortgage division.
Previous wording
Net Interest Income. Net interest income is the excess of interest earned on loans, investments, and other interest-earning assets less the interest paid on deposits and borrowings and is the Company’s primary revenue source. Net interest income is thereby affected by overall balance sheet size, changes in interest rates, and changes in the mix of investments, loans, deposits, and borrowings. Net interest income for the three and nine months ended September 30, 2025 was $21.9 million and $60.7 million, respectively, a decline of $2.8 million and $1.2 million from the same respective periods in 2024.
Current wording
Net Interest Income. Net interest income is the excess of interest earned on loans, investments, and other interest-earning assets less the interest paid on deposits and borrowings and is the Company’s primary revenue source. Net interest income is thereby affected by overall balance sheet size, changes in interest rates, and changes in the mix of investments, loans, deposits, and borrowings. Net interest income for the three months ended March 31, 2026 was $16.9 million, a decline of $2.1 million from the same respective period in 2025, primarily due to a decline in average loan balances.
Previous wording
Average interest-earning assets were $2.53 billion for the nine months ended September 30, 2025 compared to $2.88 billion for the same period of 2024, a $355.3 million decrease. This decrease was primarily attributable to declines in average balances of loans held for investment, which decreased $319.4 million in the year-to-date period. Total interest income (on a taxable equivalent basis) decreased $16.1 million for the nine months ended September 30, 2025 from the same period of 2024 and was primarily due to lower average balances on loans held for investment and loans held for sale. The yield on loans held for investment was 5.96% and 5.88% for the nine months ended September 30, 2025 and 2024, respectively. Interest income on loans held for investment for the nine months ended September 30, 2025 included $3.5 million of fee income from the payoff of the aforementioned out-of-market loan, which had a 23 basis point positive effect on the yield on loans held for investment. Interest income for the nine months ended September 30, 2025 and 2024 included accretion of discounts on acquired loans of $1.2 million and $0.9 million, respectively.
Current wording
Average balances of interest-earning assets decreased $286.1 million to $2.33 billion for the three months ended March 31, 2026 compared to $2.62 billion for the same period of 2025. Relative to the year-ago period, this decrease primarily reflected lower average balances of loans held for investment and lower average loans held for sale, reflective of the Company's exit of its indirect fintech lending partnerships, in addition to lower average interest-earning deposits in other banks. The yield on average loans held for investment was 5.50% and 5.70% for the first quarters of 2026 and 2025, respectively. The decline in yield on loans held for investment was primarily due to a decline in higher yielding out-of-market loans and lower accretion of discounts on acquired loans. Accretion of discounts on acquired loans had a four and seven basis point positive effect on yield on loans held for investment for the same respective periods. Interest income for the three months ended March 31, 2026 and 2025 included accretion of discounts on acquired loans of $0.2 million and $0.4 million, respectively.
Previous wording
Average balances of interest-bearing liabilities decreased $382.4 million to $1.74 billion for the three months ended September 30, 2025 compared to $2.12 billion for the same period of 2024. The decline relative to the year-ago period was primarily due to the exit of fintech BaaS deposit operations and the reduction of wholesale funding, reported in time deposits, and borrowings.
Current wording
Average balances of interest-bearing liabilities decreased $226.2 million to $1.67 billion for the three months ended March 31, 2026 compared to $1.90 billion for the same period of 2025. The decline relative to the year-ago period was primarily due to a $138.8 million reduction of brokered deposits, reported in time deposits, and a $25.1 million reduction in borrowings attributable to the Company's redemption of a portion of its subordinated notes.
Previous wording
Cost of funds was 2.65% for the third quarter of 2025 compared to 3.09% for the third quarter of 2024, while cost of deposits was 2.51% and 2.91%, for the same respective periods. Lower cost of funds and lower cost of deposits in the 2025 periods relative to the year-ago periods were primarily due to the exit of higher cost fintech BaaS deposit operations and the reduction in wholesale deposits. Cost of deposits, excluding wholesale deposits, was 1.17% for the third quarter of 2025 compared to 1.71% for the third quarter of 2024.
Current wording
Cost of funds was 2.42% for the first quarter of 2026 compared to 2.78% for the first quarter of 2025, while cost of deposits was 2.27% and 2.62%, for the same respective periods. Lower cost of funds and deposits in the first quarter of
Previous wording
Net interest income (on a taxable equivalent basis) for the three months ended September 30, 2025 was $21.9 million compared to $19.1 million for the same period in 2024. Interest income declined $3.0 million to $36.2 million for the three months ended September 30, 2025 from $39.2 million for the three months ended September 30, 2024, while interest expense declined $5.8 million to $14.3 million from $20.1 million for the same respective periods. Net interest margin improved to 3.60% for the third quarter of 2025 from 2.74% for the third quarter of 2024. For the third quarter of 2025, the aforementioned loan fee income of $3.0 million had a 49 basis point positive effect on net interest margin.
Current wording
Net interest income (on a taxable equivalent basis) for the three months ended March 31, 2026 was $16.9 million compared to $19.0 million for the same period in 2025. Interest income declined $6.0 million to $29.4 million for the three months ended March 31, 2026 from $35.4 million for the three months ended March 31, 2025, while interest expense declined $3.9 million to $12.5 million from $16.4 million for the same respective periods. Net interest margin remained unchanged at 2.90% for the first quarters of 2026 and 2025.
Previous wording
Provision for Credit Losses. A recovery of credit losses of $1.8 million was reported for the three months ended September 30, 2025, whereas a $2.5 million recovery of credit losses was reported for the nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, the Company recorded total recoveries of credit losses of $6.2 million and $4.1 million, respectively. The recoveries of credit losses in the 2025 periods were primarily attributable to declines in the portfolio of loans held for investment of $65.9 million and $199.1 million, respectively, and recoveries of loans charged-off in prior periods. The recoveries of credit losses in the 2024 periods were primarily attributable to an $8.4 million recovery from the sale of previously reported specialty finance loan and lower reserve needs due to loan portfolio balance reductions, partially offset by higher specific reserves for certain purchased loans.
Current wording
Recovery of Credit Losses. A recovery of credit losses of $0.6 million was reported for the three months ended March 31, 2026, whereas none was reported for the three months ended March 31, 2025. The recovery of credit losses for the first quarter of 2026 was primarily due to loan portfolio balance reductions of $31.8 million and $0.3 million of net loan recoveries, including an $0.8 million recovery on a loan charged off in 2022.
Previous wording
The current lending environment for commercial real estate (“CRE”) loans has heightened risk due to a higher interest rate environment. Potential negative impacts include higher debt service burdens for floating rate loans and fixed rate loans originated in a lower rate environment that reprice or mature, requiring renewal or refinancing. As these loans mature, they may be repriced at significantly higher interest rates leading to increased debt service costs that can strain borrowers' ability to meet payment obligations. In some cases, the higher cost of refinancing may lead to loan defaults, particularly if property cash flows have not increased relatively.
Current wording
While the Federal Reserve has reduced the target Fed Funds rate by 175 basis points from a recent peak, the current lending environment for commercial real estate (“CRE”) loans has heightened risk due to a higher interest rate environment than had existed when the majority of the Company's loans may have been originated. Potential negative impacts may include higher debt service burdens for floating rate loans and fixed rate loans originated in a lower rate environment that reprice or mature, requiring renewal or refinancing. As these loans mature, they may be repriced at higher interest rates leading to increased debt service costs that can strain borrowers' ability to meet payment obligations. In some cases, the higher cost of refinancing may lead to loan defaults, particularly if property cash flows have not increased relatively.
Previous wording
The Bank’s credit administration department led by its Chief Credit Officer performs periodic analyses of emerging trends by geography where the Bank has the largest concentrations by CRE property type. These analyses include all real estate property types and geographic markets represented in the loan portfolio and are provided to the Bank's board of directors to assess whether the CRE lending strategy and risk appetite continue to be appropriate, considering changes in local market conditions and the Bank’s exposure to collateral type concentrations. Also, concentration limits by real estate collateral type are approved and monitored by the board of directors. As of September 30, 2025, the Bank was in compliance with all limits.
Current wording
The Bank’s credit administration department led by the Chief Risk Officer performs periodic analyses of emerging trends by geography and property type where the Bank has larger concentrations by CRE property type. These analyses include all real estate property types and geographic markets represented in the loan portfolio and are provided to the Bank's board of directors to assess whether the CRE lending strategy and risk appetite continue to be appropriate, considering changes in local market conditions and the Bank’s exposure to collateral type concentrations. Also, concentration limits by real estate collateral type are approved and monitored by the Bank's board of directors. As of March 31, 2026, the Bank was in compliance with all limits.
Previous wording
The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of September 30, 2025.
Current wording
The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of March 31, 2026. Loans shown in the one year or less column are term loans that have a stated maturity date within twelve months. Variable rate loans reprice at various intervals (monthly or quarterly) and the rate is tied to a published index such as the Fed Prime rate, U.S. Treasury bond indices, or the Secured Overnight Funding Rate.
Previous wording
The ACL includes specific reserves for individually evaluated loans and a general allowance applicable to all loan categories; however, management has allocated the ACL by loan type to provide an indication of the relative risk characteristics of the loan portfolio. The allocation is an estimate and should not be interpreted as an indication that charge-offs will occur in these amounts or that the allocation indicates future trends, and does not restrict the usage of the allowance for any specific loan or category. The following table presents the allocation of the ACL by loan category and the percentage of loans in each category to total loans as of the dates stated.
Current wording
The ACL includes specific reserves for individually evaluated loans and a general allowance applicable to loans pooled by loan categories; however, management has allocated the ACL by loan type to provide an indication of the relative risk characteristics of the loan portfolio. The allocation is an estimate and should not be interpreted as an indication that charge-offs will occur in these amounts or that the allocation indicates future trends, and does not restrict the usage of the allowance for any specific loan or category. The following table presents the allocation of the ACL by loan category and the percentage of loans in each category to total loans as of the dates stated.
Previous wording
Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past due less than 90 days and the borrower demonstrates the ability to pay and remain current. For nonaccrual loans, when cash payments are received, they are applied to principal first, then to accrued interest. It is the Company's policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not be placed on nonaccrual status, if the Company determines that the loans are well-secured and are in the process of collection. OREO includes properties that have been substantively repossessed or acquired in complete or partial satisfaction of debt. Such properties, which are held for resale, are initially stated at fair value, including a reduction for the estimated selling expenses, which becomes the carrying value. In subsequent periods, such properties are stated at the lower of the restated carrying value or fair value.
Current wording
Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past due less than 90 days and the borrower demonstrates the ability to pay and remain current for a sustained period of time, generally six months, or when the loan otherwise becomes well-secured and in the process of collection. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company's policy not to record interest income on nonaccrual loans until the loan has returned to accrual status. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not be placed on nonaccrual status, if the Company determines that the loans are well-secured and are in the process of collection. The decline in nonperforming loans and the related ratios above for March 31, 2026 from December 31, 2025 primarily reflects loan paydowns in the first quarter of 2026.
Previous wording
Investment Securities. The investment portfolio is used as a source of interest income, credit risk diversification, and liquidity, as well as to manage interest rate sensitivity and provide collateral for short-term borrowings. Securities in the investment portfolio classified as securities available for sale ("AFS") may be sold in response to changes in market interest rates, securities’ prepayment risk, liquidity needs, and other similar factors, and are carried at estimated fair value. The fair value of the Company’s AFS investment securities portfolio was $341.4 million as of September 30, 2025, an increase of $29.3 million from $312.0 million at December 31, 2024, primarily due to the purchase of securities. As a result of elevated market interest rates, the Company’s portfolio of AFS securities had unrealized losses of approximately $41.6 million and $55.5 million as of September 30, 2025 and December 31, 2024, respectively, of which approximately 83% and 81%, respectively, were related to securities backed by U.S. government agencies as of the same dates.
Current wording
Investment Securities. The investment portfolio is used as a source of interest income, credit risk diversification, and liquidity, as well as to manage interest rate sensitivity and provide collateral for short-term borrowings. Securities in the investment portfolio classified as securities available for sale ("AFS") may be sold in response to changes in market interest rates, securities’ prepayment risk, liquidity needs, and other similar factors, and are carried at estimated fair value. The fair value of the Company’s AFS investment securities portfolio was $331.9 million as of March 31, 2026, a decrease of $1.0 million from $332.9 million at December 31, 2025. As a result of elevated market interest rates, the Company’s portfolio of AFS securities had net unrealized losses of approximately $40.3 million as of both March 31,
Previous wording
As of September 30, 2025 and December 31, 2024, the majority of the investment securities portfolio consisted of securities rated investment grade by a leading rating agency. Investment grade securities are judged to have a low risk of default, to be of the best quality, and to carry the smallest degree of investment risk. At September 30, 2025 and December 31, 2024, securities with a fair value of $176.6 million and $268.9 million, respectively, were pledged to secure the Bank’s borrowing facility with the Federal Home Loan Bank of Atlanta ("FHLB"). As of September 30, 2025 and December 31, 2024, the Company had pledged securities with a fair value of $0 and $16.3 million, respectively, as collateral for the Federal Reserve Bank of Richmond ("FRB") Discount Window. The decline in pledged securities as of September 30, 2025 from December 31, 2024 with both FHLB and FRB reflects the release of securities held as collateral.
Current wording
As of March 31, 2026 and December 31, 2025, the majority of the investment securities portfolio consisted of securities rated investment grade by a leading rating agency. Investment grade securities are judged to have a low risk of default, to be of the best quality, and to carry the smallest degree of investment risk. At March 31, 2026 and December 31, 2025, securities with a fair value of $169.8 million and $174.3 million, respectively, were pledged to secure the Bank’s borrowing facility with the FHLB.
Previous wording
Restricted equity investments consisted of stock in the FHLB (carrying basis $9.1 million and $9.4 million at September 30, 2025 and December 31, 2024, respectively), FRB stock (carrying value of $9.4 million at both September 30, 2025 and December 31, 2024, respectively), and stock in the Company’s correspondent bank (carrying value of $0.5 million at both September 30, 2025 and December 31, 2024). Restricted equity investments are carried at cost.
Current wording
Restricted equity investments consisted of stock in the FHLB (carrying basis $8.9 million and $9.1 million at March 31, 2026 and December 31, 2025, respectively), FRB stock (carrying value of $9.0 million and $9.4 million as of March 31, 2026 and December 31, 2025, respectively), and stock in the Company’s correspondent bank (carrying value of $0.5 million at both March 31, 2026 and December 31, 2025). Restricted equity investments are carried at cost.
Previous wording
The Company has various other equity investments, including an investment in a fintech company and limited partnerships, totaling $4.9 million and $4.8 million as of September 30, 2025 and December 31, 2024, respectively.
Current wording
The Company has various other equity investments, including an investment in a fintech company and limited partnerships, totaling $5.0 million and $4.9 million as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
The Company also holds investments in early-stage focused investment funds and low-income housing partnerships, which totaled $20.8 million and $19.4 million as of September 30, 2025 and December 31, 2024, respectively, and are reported in other investments on the consolidated balance sheets.
Current wording
The Company also holds investments in early-stage focused investment funds and low-income housing partnerships, which totaled $20.9 million and $20.8 million as of March 31, 2026 and December 31, 2025, respectively, and are reported in other investments on the consolidated balance sheets.
Previous wording
Brokered deposit balances are sourced through intermediaries and are an unsecured source of funding for the Bank. Brokered deposits were added throughout 2023 and early 2024 to enhance liquidity in light of financial industry events that began in March 2023 and in anticipation of the exit of the Company's fintech BaaS deposit operations. Brokered deposits represented approximately 13.7% and 18.5% of total deposits as of September 30, 2025 and December 31, 2024, respectively, which consisted entirely of time deposits at September 30, 2025. The Bank has a liquidity management program, with oversight by the Bank’s asset and liability management committee (the “ALCO”), that sets forth guidelines for the desired maximum level of brokered deposits, which is 20.0% of total deposits. In recent quarters, the Company has reduced levels of brokered deposits and expects to continue to reduce levels in future periods to a level of 10.0% or less of total deposits. As certain brokered deposits have multiple-year terms, the Company expects brokered deposits to be a funding source for several years.
Current wording
Brokered deposit balances are sourced through intermediaries and are an unsecured source of funding for the Bank. Brokered deposits were added throughout 2023 and early 2024 to enhance liquidity and in anticipation of the exit of the Company's fintech BaaS deposit operations. The Bank has a liquidity management program, with oversight of the Bank’s asset and liability committee (the “ALCO”), that sets forth guidelines and monitors for the desired maximum level of brokered deposits, which is 20.0% of total deposits. In recent quarters, the Company has reduced its level of higher-priced brokered deposits by sourcing non-brokered deposits and through cash flows from the loan portfolio, and expects to continue reducing brokered deposits in future periods to 10.0% or less of total deposits.
Previous wording
Total deposits decreased $228.4 million from $2.18 billion as of December 31, 2024 to $1.95 billion as of September 30, 2025, as:
Current wording
Total deposits decreased $18.1 million from $1.91 billion as of December 31, 2025 to $1.89 billion as of March 31, 2026, as:
Previous wording
Estimated uninsured deposits totaled approximately $404.3 million as of September 30, 2025, or 19.8% of total deposits, compared to $399.3 million, or 18.0% of total deposits, as of December 31, 2024.
Current wording
Estimated uninsured deposits totaled approximately $414.3 million as of March 31, 2026, or 20.3% of total deposits, compared to $397.0 million, or 19.1% of total deposits, as of December 31, 2025. Uninsured deposit amounts are based on estimates as of the reported dates.
Previous wording
The following table presents maturities of time deposits for certificate of deposits of $250 thousand or greater as of the dates stated.
Current wording
The following table presents maturities of time deposits for certificates of deposits of $250 thousand or greater as of the dates stated.
Previous wording
Borrowings. The Company uses short-term and long-term borrowings from various sources, including FHLB advances and FRB advances, to fund assets and operations. The following tables present information on the balances and interest rates on borrowings as of and for the periods stated.
Current wording
Borrowings. The Company uses short-term and long-term borrowings from various sources, including FHLB advances and FRB advances, to fund assets and operations. The following table presents information on the balances of borrowings as of and for the periods ended March 31, 2026 and December 31, 2025. The weighted average rate was 3.82% and 3.87% as of and for the same periods, respectively.
Previous wording
FHLB advances are secured by collateral consisting of a blanket lien on qualifying pledged loans in the Company’s residential, multi-family, and commercial real estate mortgage loan portfolios, as well as select investment securities. FRB advances through the FRB Discount Window are secured by qualifying pledged construction and commercial and industrial loans.
Current wording
As of March 31, 2026, FHLB advances were secured by collateral consisting of a blanket lien on qualifying loans in the Company’s residential, multifamily, and commercial real estate mortgage loan portfolios with a lendable value of $384.7 million, as well as selected investment portfolio securities with a lendable value of $161.3 million. FRB advances through the FRB Discount Window were secured by qualifying pledged construction and commercial and industrial loans totaling $71.1 million as of March 31, 2026.
Previous wording
The Company had $14.7 million and $39.8 million of subordinated notes, net, outstanding as of September 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”).
Current wording
The Company had $14.7 million of subordinated notes, net, outstanding as of both March 31, 2026 and December 31, 2025. 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”).
Previous wording
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 and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and $0.4 million and $0.7 million for the nine months ended September 30, 2025 and 2024, respectively.
Current wording
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 and $0.2 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
On July 15, 2025, the Company completed a $10.0 million partial redemption of its 2029 Notes. 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 September 30, 2025, the 2029 Notes bore an annual interest rate of 8.65%. As of September 30, 2025, the net carrying amount of the 2029 Notes was $14.7 million, inclusive of a $0.3 million purchase accounting adjustment (premium). For the three months ended September 30, 2025 and 2024, the effective interest rate on the 2029 Notes was 7.49% and 5.31%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium). For the nine months ended September 30, 2025 and 2024, the effective interest rate on the 2029 Notes was 7.84% and 5.21%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).
Current wording
On July 15, 2025, the Company completed a $10.0 million partial redemption of its 2029 Notes. As of March 31, 2026, the 2029 Notes bore an annual interest rate of 8.0%. As of March 31, 2026, the net carrying amount of the 2029 Notes was $14.7 million, inclusive of a $0.2 million purchase accounting adjustment (premium). For the three months ended March 31, 2026 and 2025, the effective interest rate on the 2029 Notes was 7.92% and 6.31%, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).
Previous wording
Liquidity. Liquidity is essential to the Company’s business. The Company’s liquidity could be impaired by unforeseen outflows of cash, including deposits, or the inability to access the capital and/or wholesale funding markets. This situation may arise due to circumstances that the Company may be unable to control, such as general market disruption, negative views about the Company or the financial services industry generally, or an operational problem that affects the Company or a third party. The Company’s ability to borrow from other financial institutions on favorable terms or at all could be adversely affected by disruptions in the markets in which they operate or other events.
Current wording
Liquidity. Liquidity is essential to the Company’s business. The Company’s liquidity could be impaired by unforeseen outflows of cash, including deposits, or the inability to access the capital and/or brokered funding markets. This situation may arise due to circumstances that the Company may be unable to control, such as general market disruption, negative views about the Company or the financial services industry generally, or an operational problem that affects the Company or a third party. The Company’s ability to borrow from other financial institutions on favorable terms or at all could be adversely affected by disruptions in the markets in which they operate or other events.
Previous wording
Deposits are the primary source of the Company’s liquidity. Cash flows from amortizing or maturing assets also provide funding to meet the liquidity needs of the Company. Deposits are sourced from the Bank’s customers and, as needed, through wholesale deposit markets. The wholesale deposit markets are accessed through brokers or through the IntraFi Network (“IntraFi”), of which the Bank is a member. IntraFi facilitates the Bank attaining brokered deposits via an on-line marketplace. The Bank also utilizes IntraFi's reciprocal deposit services to offer its high-value customers access to FDIC insurance through IntraFi's network of banks.
Current wording
Deposits are the primary source of the Company’s liquidity. Cash flows from amortizing or maturing assets also provide funding to meet the liquidity needs of the Company. Deposits are sourced from the Bank’s customers and, as needed, through brokered deposit markets. The brokered deposit markets are accessed through brokers or through the IntraFi Network (“IntraFi”), of which the Bank is a member. IntraFi facilitates the Bank attaining brokered deposits via an on-line marketplace. The Bank also utilizes IntraFi's reciprocal deposit services to offer its high-value customers access to FDIC insurance through IntraFi's network of banks.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
OREO generally includes properties that have been substantively repossessed or acquired in complete or partial satisfaction of debt. Such properties,which are held for resale, are initially stated at fair value, including a reduction for the estimated selling expenses, which becomes the new carrying value. In subsequent periods, such properties are stated at the lower of the restated carrying value or fair value. In limited cases, the Bank may receive non-cash consideration, including equity interests, pursuant to negotiated or court-approved settlements with borrowers. The fair value of nonmarketable equity interests are generally estimated using a discounted cash flow analysis based on management’s assumptions regarding expected future cash flows, timing, and a risk adjusted discount rate. These assets, which are reported with OREO on the Company's consolidated balance sheets, are subsequently carried at the lower of cost or fair value, less estimated costs to sell, and are periodically evaluated for impairment. In subsequent periods, such properties are stated at the lower of the restated carrying value or fair value.
Current report — wording carried from elsewhere
2026 and December 31, 2025, of which approximately 83% and 84%, respectively, were related to securities backed by U.S. government agencies.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
For the nine months ended September 30, 2025, the Company reported net income of $6.5 million, or $0.07 per diluted common share, compared to a net loss of $13.4 million, or ($0.34) per diluted common share, for the same period of 2024.
Previous report — wording carried elsewhere
The following table presents the average balance sheets for the nine months ended September 30, 2025 and 2024. Also shown are the amounts of interest earned on interest-earning assets, with related tax-equivalent yields, and interest expense on interest-bearing liabilities, with related rates, as well as a volume and rate analysis of changes in net interest income for the periods stated.