Financial Position - As of December 31, 2024, the Company had total assets of approximately 2.11 billion, total deposits of approximately 327.8 million[16]. - The Company completed a merger with Bay Banks of Virginia, Inc., adding 1.03 billion in deposits, expanding its operating footprint[21]. - As of December 31, 2024, the Bank's common equity Tier 1 capital ratio was 17.26%, exceeding the well-capitalized threshold[61]. - The Bank's Tier 1 capital to risk-weighted assets ratio was 16.38%, while the Company's was 17.24% as of December 31, 2024[61]. - The Bank's Tier 1 leverage ratio was 11.80%, exceeding the minimum requirement of 10.00%[62]. - The Company recorded expenses of 5.1 million for FDIC insurance premiums in the years ended December 31, 2024 and 2023, respectively[55]. Capital Management - In the second quarter of 2024, the Company closed private placements for gross proceeds of 152.1 million after issuance costs[17][18]. - The Company intends to use the capital from the Private Placements to support organic growth and enhance capital levels, ensuring compliance with minimum capital ratios set by the OCC[19]. - The Bank is required to maintain a Tier 1 leverage ratio of 10.00% and a total capital ratio of 13.00%, which it met as of December 31, 2024[62]. - The Federal Reserve requires banks to maintain a capital conservation buffer of 2.50% above the minimum capital ratios[58]. - The Company is unlikely to resume dividend payments in the foreseeable future due to restrictions from the Consent Order and the need for written non-objection from the OCC[64]. Regulatory Compliance - The Bank is subject to a Consent Order requiring remediation of BSA/AML deficiencies and enhanced oversight of third-party partnerships[45]. - The Company is subject to extensive federal and state consumer protection laws, which mandate compliance to avoid penalties and potential regulatory approval issues for mergers or acquisitions[77]. - Compliance with anti-money laundering laws is costly and requires the Company to maintain robust policies and procedures to detect and report potential money laundering activities[83]. - The Company must adhere to the Office of Foreign Assets Control regulations, which involve blocking transactions with prohibited parties and reporting blocked transactions[84]. - The Dodd-Frank Act requires bank holding companies to act as a source of financial strength for their subsidiary banks, even during financial difficulties[71]. - The Company must inform and consult with the Federal Reserve before declaring dividends that exceed current operating earnings, which could adversely affect its capital structure[63]. Business Operations - The Company offers a variety of financial services, including retail and commercial banking, mortgage banking, and wealth management, contributing to its diverse revenue streams[12][14]. - The Company’s primary source of revenue is interest income from lending activities, supplemented by fees from various banking services[14]. - The Company has partnerships with fintech providers for indirect lending services, with active partnerships as of December 31, 2024, including Upgrade, Inc. and Best Egg, Inc.[15]. - The Company predominantly originates compliant qualified mortgages, which are entitled to a presumption of meeting ability-to-repay requirements[91]. - The Company operates twenty-seven full-service banking offices across Virginia and central North Carolina as of December 31, 2024[11]. Community Engagement - In 2024, the Company committed approximately $279 thousand in financial donations to community organizations[40]. - The Bank was rated "satisfactory" in its most recent Community Reinvestment Act evaluation, which assesses its record in meeting the credit needs of the communities served[80]. - The revised CRA regulations, effective January 1, 2026, will alter the assessment methodology and may make it more challenging for the Bank to achieve at least a "satisfactory" rating[81]. Cybersecurity and Data Protection - The Company must notify regulators of significant cybersecurity incidents within 36 hours of discovery[93]. - The Company faces ongoing cybersecurity threats due to the increasing use of internet and mobile banking[95]. - The Company must implement additional safeguards for information security as per the amended GLB Act's Safeguards Rule[94]. - The CFPB's new rule requires financial services providers to make certain data available to consumers upon request starting April 1, 2028[86]. Future Outlook and Challenges - Future legislation and regulation may significantly impact the regulatory structure under which the Company and the Bank operate[96]. - Changes in legislation could increase costs and impede the efficiency of internal business processes[96]. - Regulatory changes may require an increase in regulatory capital for the Company and the Bank[96]. - Modifications to business strategy may be necessary due to changes in statutes or regulations[96]. - The Company and the Bank's ability to pursue business opportunities efficiently may be limited by regulatory changes[96]. - A material adverse effect on the business, financial condition, and results of operations may result from changes in regulatory policies[96].
Blue Ridge Bankshares(BRBS) - 2024 Q4 - Annual Report