Blue Ridge Bankshares reports net loss of $4.16 million
- Form
- 10-Q
- Filed
- Importance
- Major
- Accession
- 0001193125-26-450083
- Net loss: $4.16 million for the three months ended Sep 30, 2026
- Loans held for investment, net: $1.87 billion as of Sep 30, 2026
Written from the 10-Q on EDGAR. AI can make mistakes. Check the filing.
What changed
18 changes since the June 2026 10-Q
Compared with the 10-Q 0001193125-26-342578, filed Aug 10, 2026.
Because the exchange ratio is fixed and the market price of HomeTrust common stock will fluctuate, holders…
In the Merger, each share of the Company's common stock issued and outstanding will be converted into the right to receive 0.086 of a share of HomeTrust common stock.
From the filings
Now
Because the exchange ratio is fixed and the market price of HomeTrust common stock will fluctuate, holders of the Company's common stock cannot be certain of the market value of the merger consideration they will receive. In the Merger, each share of the Company's common stock issued and outstanding will be converted into the right to receive 0.086 of a share of HomeTrust common stock. This exchange ratio is fixed and will not be adjusted for changes in the market price of HomeTrust common stock or the Company's common stock. Changes in the market price of HomeTrust common stock prior to the Merger will affect the market value that holders of the Company's common stock will receive in the Merger. Stock price changes may result from a variety of factors, including general market and economic conditions, impacts and disruptions resulting from changes in HomeTrust's or the Company's businesses, operations and prospects and regulatory considerations, many of which are beyond HomeTrust's or the Company's control. Therefore, the Company's shareholders will not know the market value of the consideration that they shareholders will receive until completion of the Merger.The companies might not realize the anticipated cost savings and other benefits of the Merger within the…
The success of the Merger will depend in part on the ability of HomeTrust and the Company to realize the cost savings and other benefits expected to result from combining their respective businesses.
From the filings
Now
The companies might not realize the anticipated cost savings and other benefits of the Merger within the expected time frames or at all . The success of the Merger will depend in part on the ability of HomeTrust and the Company to realize the cost savings and other benefits expected to result from combining their respective businesses. Achieving these benefits will require effective integration of operations, processes, systems, and personnel. If HomeTrust and the Company are unable to successfully integrate their businesses in a manner that permits the expected efficiencies and cost savings to be realized, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than currently expected. In addition, the amount of actual cost savings and other benefits may be lower than anticipated, and the integration process may involve additional and unforeseen expenses. Until completion of the merger, HomeTrust and the Company must continue to operate independently. The integration process could result in the loss of key employees, disruption of ongoing business operations, or inconsistencies in standards, controls, procedures and policies, which could adversely affect the companies' ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the Merger. Integration efforts may also divert management attention and resources from ongoing business operations. These integration-related risks could adversely affect both companies during the transition period and could continue to adversely impact the combined company for an undetermined period following completion of the Merger.The Company may be unable to retain key personnel while the Merger is pending or after it is completed…
Until the completion of the Merger, the Company will continue to operate independently.
From the filings
Now
The Company may be unable to retain key personnel while the Merger is pending or after it is completed, which could result in loss of customers and make integration more difficult. Until the completion of the Merger, the Company will continue to operate independently. Uncertainty regarding the effects of the Merger on employees, customers, and other stakeholders may adversely affect the Company. Such uncertainty could impair the Company's ability to attract, retain, or motivate key personnel and could lead customers or business partners to reconsider or change their existing relationships with the Company. Retention of certain employees may be particularly challenging during the pendency of the Merger, as employees may be uncertain about their future roles with HomeTrust. Some employees may choose not to remain with their respective organizations while the Merger is pending or with HomeTrust after the Merger is completed. If key employees depart, the Company could experience operational disruptions, loss of institutional knowledge, expertise or other important capabilities, and the loss of existing customers or business relationships. Employee departures may also result in unanticipated recruitment and training costs, and management's attention may be diverted from integration efforts to hiring and onboarding replacements. The Company may not be able to identify, attract, or retain suitable replacement personnel in a timely manner, which could further impair its operations.The Merger Agreement and termination fee provisions may discourage competing acquisition proposals for the…
Until the effective time or earlier termination of the Merger Agreement, the Company is generally prohibited under the Merger Agreement from initiating, soliciting, knowingly encouraging, inducing or knowingly…
From the filings
Now
The Merger Agreement and termination fee provisions may discourage competing acquisition proposals for the Company. Until the effective time or earlier termination of the Merger Agreement, the Company is generally prohibited under the Merger Agreement from initiating, soliciting, knowingly encouraging, inducing or knowingly facilitating the making, submission or announcement of any third-party acquisition proposal. While the Company's board of directors may take certain actions in response to a competing acquisition proposal if it determines in good faith that failing to do so would reasonably likely violate its fiduciary duties, taking such actions could entitle HomeTrust to terminate the Merger Agreement and receive a termination fee of $18.0 million. These provisions, including the termination fee, could discourage other companies from seeking to acquire the Company, even if a third party were willing to propose a transaction that offers greater value to the Company's shareholders than the merger consideration under the Merger Agreement. They could also result in a competing acquiror proposing a lower per-share price than it otherwise might have offered. In addition, the payment of the termination fee could have an adverse effect on the Company's financial condition. The Merger Agreement subjects the Company to restrictions on its business activities prior to the effective time. The Merger Agreement subjects the Company to restrictions on its business activities prior to the effective time. Subject to specified exceptions, the Merger Agreement obligates the Company to, and to cause each of its subsidiaries to, (i) use reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships and (ii) conduct its business in the ordinary course in all material respects. These restrictions could prevent the Company from pursuing certain business opportunities that arise prior to the effective time.Regulatory approvals may not be received, may take longer than expected or may impose conditions that are…
The Merger requires (i) applications for approval to be filed with the Federal Reserve Board and the North Carolina Commissioner of Banks, (ii) an application for approval and a separate notification to be filed with…
From the filings
Now
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated. The Merger requires (i) applications for approval to be filed with the Federal Reserve Board and the North Carolina Commissioner of Banks, (ii) an application for approval and a separate notification to be filed with the Virginia State Corporation Commission, Bureau of Financial Institutions, and (iii) a notification to be filed with the Office of the Comptroller of the Currency. Other approvals, waivers, or consents from additional regulators may also be required. Adverse developments in the regulatory standing of HomeTrust or the Company or other factors could delay or prevent the receipt of required approvals. Regulators may impose conditions, limitations, obligations, or restrictions on the completion of the Merger, including requirements affecting post-closing operations or the terms of the transactions. While the Company does not expect that any such conditions or changes will be imposed, there can be no assurance that they will not occur. Any such conditions, limitations, obligations, or restrictions could delay completion of the Merger, impose additional costs, materially limit revenues, or reduce the anticipated benefits of the Merger, and could potentially result in delay or abandonment of the Merger. The completion of the Merger is conditioned upon no required regulatory approval containing a condition that would reasonably be expected to have a material adverse effect on HomeTrust after the Merger is completed and the absence of any order, decree or injunction that enjoins or prohibits or makes illegal the consummation of the Merger. The Merger is subject to certain closing conditions that, if not satisfied or waived, will result in the Merger not being completed. Termination of the Merger Agreement could negatively affect the Company. The Merger is subject to customary conditions to closing, including the receipt of…Litigation relating to the Merger could delay and/or enjoin the Merger.
On October 19, 2026, a purported shareholder of Blue Ridge filed an individual lawsuit against the Company and members of the Company's board of directors in the United States District Court for the Northern District…
From the filings
Now
Litigation relating to the Merger could delay and/or enjoin the Merger. On October 19, 2026, a purported shareholder of Blue Ridge filed an individual lawsuit against the Company and members of the Company's board of directors in the United States District Court for the Northern District of Illinois ( Bosley v. Blue Ridge Bankshares, Inc. et al. No. 26-cv-12818) alleging, among other things, that the registration statement on Form S-4 in connection with the Merger omits or misrepresents allegedly material information in violation of federal securities laws. This complaint seeks relief enjoining the vote on the Merger and the Merger Agreement, attorneys' and experts' fees, and other remedies. Additional lawsuits against the Company, HomeTrust and/or the directors and officers of either company in connection with the Merger may be filed. The outcome of the pending and any additional future litigation is uncertain. If any case is not resolved, the lawsuit(s) could prevent or delay completion of the Merger and result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers. One of the conditions to the closing of the Merger is that no party to the Merger Agreement shall be subject to any order, decree or injunction issued by a court or agency of competent jurisdiction or a governmental authority that enjoins or prohibits or makes illegal the consummation of the Merger. As such, if plaintiffs are successful in obtaining an injunction prohibiting the completion of the Merger on the agreed-upon terms, then such injunction may prevent the Merger from being completed, or from being completed within the expected timeframe. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger are completed may adversely affect the combined company's business, financial condition, results of operations and cash flows.New legal mention
On October 19, 2026, a purported shareholder of the Company filed an individual lawsuit against the Company and members of the Company's board of directors in the United States District Court for the Northern District…
From the filings
Now
On October 19, 2026, a purported shareholder of the Company filed an individual lawsuit against the Company and members of the Company's board of directors in the United States District Court for the Northern District of Illinois ( Bosley v. Blue Ridge Bankshares, Inc. et al .New legal mention
This complaint seeks relief enjoining the vote on the Merger and the Merger Agreement, attorneys' and experts' fees, and other remedies.
From the filings
Now
This complaint seeks relief enjoining the vote on the Merger and the Merger Agreement, attorneys' and experts' fees, and other remedies.EPS down 400% from Jun 30
−$0.05, was −$0.01.
From the filings
Before
−$0.01Now
−$0.05Net income down 222% from Jun 30
−$4.2M, was −$1.3M.
From the filings
Before
−$1.3MNow
−$4.2M• the timing and completion of the proposed merger with HomeTrust is dependent on the satisfaction of…
New paragraph in MD&A.
From the filings
Now
• the timing and completion of the proposed merger with HomeTrust is dependent on the satisfaction of customary closing conditions, and various other factors that cannot be predicted with precision at this point;• the occurrence of any event, change or other circumstance that could give rise to the right of HomeTrust…
New paragraph in MD&A.
From the filings
Now
• the occurrence of any event, change or other circumstance that could give rise to the right of HomeTrust, the Company or both to terminate the Merger Agreement;• completion of the proposed merger with HomeTrust is subject to bank regulatory approvals and such…
New paragraph in MD&A.
From the filings
Now
• completion of the proposed merger with HomeTrust is subject to bank regulatory approvals and such approvals may not be obtained in a timely manner or at all or may be subject to conditions which may cause additional significant expense or delay the consummation of the proposed merger;• potential adverse reactions or changes to business or employee relationships, including those resulting…
New paragraph in MD&A.
From the filings
Now
• potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger with HomeTrust;• the diversion of attention and time by the management team of the Company from ongoing business operations…
New paragraph in MD&A.
From the filings
Now
• the diversion of attention and time by the management team of the Company from ongoing business operations and opportunities on merger-related matters;On August 16, 2026, the Company, HomeTrust, and Merger Sub, a wholly owned subsidiary of HomeTrust, entered…
New paragraph in MD&A.
From the filings
Now
On August 16, 2026, the Company, HomeTrust, and Merger Sub, a wholly owned subsidiary of HomeTrust, entered into the Merger Agreement, which was jointly announced on August 17, 2026. Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation, and immediately following the Merger, the Company will merge with and into HomeTrust, with HomeTrust continuing as the surviving corporation, and then the Bank will merge with and into HomeTrust Bank, the wholly owned bank subsidiary of HomeTrust, with HomeTrust Bank as the surviving bank.The Merger Agreement contains customary representations, warranties, covenants and closing conditions…
New paragraph in MD&A.
From the filings
Now
The Merger Agreement contains customary representations, warranties, covenants and closing conditions, including receipt of required regulatory approvals, approval of the Merger Agreement by the Company's shareholders and approval of the issuance of HomeTrust common stock in connection with the Merger by HomeTrust's stockholders. The Merger Agreement also provides for a termination fee of $18.0 million payable by either party under certain specified circumstances.Subject to receipt of required approvals and satisfaction of other closing conditions, the Merger is…
New paragraph in MD&A.
From the filings
Now
Subject to receipt of required approvals and satisfaction of other closing conditions, the Merger is anticipated to close in the first quarter of 2027.
Show the redline
Section by section. Added words and removed words against the earlier filing.
Cover page 2 changes
3 unchanged paragraphs
For the quarterly period ended June September 30, 2026
22 unchanged paragraphs
As of July 31, November 3, 2026, the registrant had 89,688,853 89,682,051 shares of common stock, no par value per share, outstanding.
2 unchanged paragraphs
Financial statements 35 changes
22 unchanged paragraphs
Common stock, no par value; 150,000,000 shares authorized at June September 30, 2026 and December 31, 2025, respectively; and 89,655,211 89,687,067 and 91,475,278 shares issued and outstanding at June September 30, 2026 and December 31, 2025, respectively
9 unchanged paragraphs
For the six nine months ended
15 unchanged paragraphs
Residential mortgage banking income
Loss on sale of securities available for sale
Income on sale of mortgage servicing rights ("MSRs")
9 unchanged paragraphs
Merger-related expenses
1 unchanged paragraph
(Loss) income before income tax (benefit) expense
6 unchanged paragraphs
For the six nine months ended
2 unchanged paragraphs
Gross unrealized (loss) gain on securities available for sale arising during the period ( 903 ( 41 4,806 ( 1,135 5,941
1 unchanged paragraph
Reclassification of net loss on securities available for sale included in net income loss
6 unchanged paragraphs
For the six months ended June 30, 2026
For the nine months ended September 30, 2026
11 unchanged paragraphs
For the six months ended June 30, 2025
For the nine months ended September 30, 2025
7 unchanged paragraphs
Repurchases of common stock
3 unchanged paragraphs
For the three months ended June September 30, 2026
6 unchanged paragraphs
Exercises of warrants to purchase common stock
3 unchanged paragraphs
For the three months ended June September 30, 2025
5 unchanged paragraphs
Other comprehensive loss income
1 unchanged paragraph
Repurchases of common stock
6 unchanged paragraphs
For the six nine months ended
7 unchanged paragraphs
Accretion of fair value adjustments on acquired loans, time deposits, and subordinated notes ( 338 851 ( 845 1,518 ( 87 ( 1,026
4 unchanged paragraphs
Loss on liquidation of other investments
(Gain) loss on disposal of premises and equipment, other assets, and other real estate owned ( 12 45
1 unchanged paragraph
Amortization of subordinated debt notes issuance costs
8 unchanged paragraphs
Net (increase) decrease (increase) in federal funds sold
Proceeds from sale of premises and equipment, other assets, MSRs, and other real estate owned
Proceeds from liquidation of other investments
3 unchanged paragraphs
Proceeds from surrender of bank owned life insurance policies
5 unchanged paragraphs
Net decrease increase in demand, savings, and other interest-bearing deposits ( 21,099 10,454 ( 19,754
Net increase decrease in non-brokered time deposits
2 unchanged paragraphs
Repurchases of common stock
6 unchanged paragraphs
Non-cash investing and financing activities:
Non-cash activities:
2 unchanged paragraphs
Unrealized (loss) gains gain on securities available for sale
3 unchanged paragraphs
Note 1: Organization and Basis of Presentation 11 changes
4 unchanged paragraphs
Pending Merger with HomeTrust Bancshares, Inc.
On August 16, 2026, the Company, HomeTrust Bancshares, Inc. ("HomeTrust"), a Maryland corporation, and Kinloch Merger Sub, Inc., a Virginia corporation and wholly owned subsidiary of HomeTrust ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), which was jointly announced on August 17, 2026. Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation, and immediately following the Merger, the Company will merge with and into HomeTrust, with HomeTrust continuing as the surviving corporation, and then the Bank will merge with and into HomeTrust Bank, the wholly owned bank subsidiary of HomeTrust, with HomeTrust Bank as the surviving bank.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of the Company's common stock issued and outstanding will be converted into the right to receive 0.086 of a share of HomeTrust common stock, plus cash in lieu of any fractional shares.
In connection with the Merger Agreement, the Company offered holders of outstanding warrants to purchase the Company's common stock (the "Warrants") the opportunity to enter into warrant conversion agreements that provide for the automatic cashless exercise of the Warrants immediately prior to the effective time of the Merger, with the resulting shares of the Company's common stock converted into the right to receive the merger consideration. As of September 30, 2026, holders of Warrants to purchase an aggregate of 11,356,000 shares of the Company's common stock, representing approximately 47 % of outstanding Warrants, had executed warrant conversion agreements. Outstanding Warrants not subject to warrant conversion agreements will be assumed by HomeTrust at the effective time of the Merger in accordance with their terms.
Based on the number of shares of the Company's common stock outstanding and reserved for issuance and the number of shares underlying Warrants subject to warrant conversion agreements, HomeTrust expects to issue approximately 8,314,956 shares of HomeTrust common stock to the Company's shareholders in the Merger. Following completion of the Merger, former shareholders of the Company are expected to own approximately 35 % of HomeTrust's outstanding common stock, with existing HomeTrust stockholders owning approximately 65 %.
The Merger Agreement contains customary representations, warranties, covenants and closing conditions, including receipt of required regulatory approvals, approval of the Merger Agreement by the Company's shareholders and approval of the issuance of HomeTrust common stock in connection with the Merger by HomeTrust's stockholders. The Merger Agreement also provides for a termination fee of $ 18.0 million payable by either party under certain specified circumstances.
Subject to receipt of required approvals and satisfaction of other closing conditions, the Merger is anticipated to close in the first quarter of 2027.
2 unchanged paragraphs
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 . As a result, the previously accrued $ 6.1 million (for dividends to be paid upon exercise of the Warrants) was reversed in the first quarter of 2026, and, upon execution of the amended and restated Warrants, the strike price of the Warrants reduces to $ 1.65 per common share.
6 unchanged paragraphs
Balance, September 30, 2026
Remaining exercise term (years) as of June September 30, 2026
5 unchanged paragraphs
Balance, September 30, 2025
3 unchanged paragraphs
Note 2: In vestment Securities and Other Investments 7 changes
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. The Company had no investment securities classified as held to maturity as of June September 30, 2026 or December 31, 2025.
8 unchanged paragraphs
As of June September 30, 2026 and December 31, 2025 , securities with a fair value of $ 163.8 150.0 million and $ 174.3 million, respectively, were pledged as collateral for the Bank's borrowing facility with the Federal Home Loan Bank of Atlanta ("FHLB").
5 unchanged paragraphs
The following tables present fair values 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 totaling $ 13.0 10.9 million and $ 42.4 million as of June September 30, 2026 and December 31, 2025, respectively.
10 unchanged paragraphs
At June September 30, 2026 and December 31, 2025, 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 o f $ 21.0 16.5 million and $ 23.5 million, respectively). These securities were primarily subordinated notes 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 identified no 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 September 30, 2026 and December 31, 2025, 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 consiste d of stock in the FHLB (carrying value of $ 8.9 13.0 million and $ 9.1 million as of June September 30, 2026 and December 31, 2025, respectively), Federal Reserve Bank of Richmond ("FRB") stock (carrying value of $ 7.4 million an d $ 9.4 million as of June September 30, 2026 and December 31, 2025, respectively), and stock in the Company's correspondent bank (carrying value of $ 0.5 million at both June September 30, 2026 and December 31, 2025). Restricted equity investments are carried at cost.
The Company has various other equity investments, including an investment in a financial technology company and limited partnerships, totaling $ 5.0 million and $ 4.9 million as of June September 30, 2026 and December 31, 2025, respectively.
The Company also holds other investments, primarily in early-stage focused investment funds, which totaled $ 18.0 14.9 million and $ 20.8 million as of June September 30, 2026 and December 31, 2025, respectively, and are reported in other investments on the consolidated balance sheets. During the second quarter of 2026, the Company recognized a $ 0.6 million loss upon the liquidation of an investment made in 2022. The loss reflects the difference between the investment's carrying value and the distribution received upon the final liquidation of the investment subsequent to June 30, during the third quarter of 2026. . As of June September 30, 2026 and December 31, 2025, the carrying value of this investment was $ 3.2 million 0 and $ 6.3 million, respectively.
Note 3: Loan s, ACL, and OREO 51 changes
10 unchanged paragraphs
The Company has pledged certain commercial and residential mortgage loans as collateral for the Bank's borrowing facility with the FHLB. Loans totaling $ 637.0 658.2 million and $ 695.1 million were pledged with the FHLB as of June September 30, 2026 and December 31, 2025, respectively. Additionally, the t he Company has pledged certain construction and commercial and industrial loans with a lendable value totaling $ 45.3 56.1 million and $ 72.8 109.3 million as of June September 30, 2026 and December 31, 2025, respectively, as collateral for the Bank's borrowing facility with the FRB Discount Window.
34 unchanged paragraphs
The increase in nonaccrual loans since December 31, 2025 was primarily attributable to loans to a single out-o f-market relationship originated prior to 2024 totaling $ 11.4 million. The loans, classified as commercial and industrial, remained current through May 2026 but became delinquent when the borrower failed to make its June 2026 payment. Consequently, the loans were placed on nonaccrual at June 30, 2026, and a reserve was established in the amount of $ 2.9 million.
The Company recognized $ 269 77 thousand and $ 290 367 thousand of interest income on nonaccrual loans during the three and six nine months ended June September 30, 2026 , respectively, compared to $ 30 289 thousand and $ 148 437 thousand for the same respective periods in 2025.
1 unchanged paragraph
For the six months ended June 30,
For the three months ended June September 30,
For the nine months ended September 30,
16 unchanged paragraphs
The following table presents the recorded investment of loans held for investment by internal loan risk grade by year of origination as of June September 30, 2026. There were no loans classified as doubtful or loss (risk grades 8 or 9) as of the same date. Also presented are current period gross charge-offs by loan type for the six nine months ended June September 30, 2026 . Of the $ 3.5 4.7 million of gross charge-offs of revolving loans presented for the six-month nine-month period, $ 3.3 4.5 million 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, which were $ 3.3 4.5 million for the six nine months ended June September 30, 2026. Since the inception of this partnership in early 2023, the Bank has not experienced a credit loss from this arrangement.
26 unchanged paragraphs
For the three months ended June September 30, 2026
9 unchanged paragraphs
For the three months ended June September 30, 2025
8 unchanged paragraphs
For the six months ended June 30, 2026
Provision for (Recovery of) provision for credit losses - loans
Net recoveries (charge-offs)
For the nine months ended September 30, 2026
9 unchanged paragraphs
Net recoveries (charge-offs)
For the six months ended June 30, 2025
For the nine months ended September 30, 2025
10 unchanged paragraphs
Subsequent to June 30, 2026, a commercial borrower, outside of the Bank's primary market, with outstanding out-of-market loans totaling $ 11.4 million reported that it had ceased operations. Based on this information, the loans were placed on nonaccrual status as of June 30, 2026, and a specific reserve of $ 2.9 million was established as of that date. In October 2026, additional information regarding the borrower and underlying collateral resulted in an additional provision for credit losses of $ 7.0 million for the three months ended September 30, 2026 and the charge-off of $ 9.9 million of loan principal against the total specific reserve as of September 30, 2026.
Effective January 1, 2026, , the Bank's ACL policy was amended to remove the requirement that special mention loans over $ 1.0 million be individually evaluated; as a result, six loans totaling $ 33.9 million were moved to collective evaluation as of the date of the policy change. These loans had no reserves prior to the policy change, however when collectively evaluated in the first quarter of 2026, resulted in approximately $ 0.3 million of ACL. Other than the preceding change to the Bank's ACL policy in the first quarter of 2026, t here 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 recovery of provision for credit losses for loans held for investment as of and for the three and six nine months ended June September 30, 2026.
Excluded from the estimation of the ACL as of both June September 30, 2026 and December 31, 2025 were $ 8.6 8.9 million and $ 9.1 million, respectively, of accrued interest attributable to loans held for investment, which is included in accrued interest receivable on the consolidated balance sheets.
6 unchanged paragraphs
The decline in collateral-dependent loans since December 31, 2025 was primarily attributable to the aforementioned change to the Bank's ACL policy effective January 1, 2026. Also contributing to the decline was a $ 9.9 million charge-off of the aforementioned out-of-market loans on September 30, 2026.
As of June September 30, 2026 and December 31, 2025 , the amortized cost of purchased credit deteriorated ("PCD") loans totaled $ 29.0 25.1 million and $ 29.8 million, respectively, with an estimated ACL of $ 0.2 million as of both dates. The remaining non-credit discount on PCD loans was $ 1.8 1.5 million and $ 2.0 million as of June September 30, 2026 and December 31, 2025, respectively.
3 unchanged paragraphs
For the six months ended June 30,
For the three months ended September 30,
3 unchanged paragraphs
Real estate – commercial
1 unchanged paragraph
Total term extension
For the nine months ended September 30,
(Dollars in thousands)
% of Amortized Cost to Gross Loans by Category
% of Amortized Cost to Gross Loans by Category
Real estate – residential
2 unchanged paragraphs
Real estate – commercial
Real estate – residential
3 unchanged paragraphs
During the three months ended June 30, 2026 and 2025, no new loans were designated as TLMs.
T he following tables present additional information including the financial effects of TLMs as of and for the periods stated. The Company reported no TLMs as of and for the three months ended September 30, 2026.
As of and for the six three months ended June September 30, 2026 2025
4 unchanged paragraphs
Real estate – commercial
1 unchanged paragraph
As of and for the six nine months ended June September 30, 2025 2026
4 unchanged paragraphs
Real estate – residential
As of and for the nine months ended September 30, 2025
(Dollars in thousands)
Weighted Average Term Extension (Months)
Weighted Average Payment Deferral
Weighted Average Interest Forgiven
1 unchanged paragraph
Real estate – commercial
12 unchanged paragraphs
As of June September 30, 2026 and December 31, 2025, there wer e no unfunded c ommitments to borrowers with TLMs.
1 unchanged paragraph
As of and for the six nine months ended June September 30,
6 unchanged paragraphs
Real estate – commercial
1 unchanged paragraph
Total term extension
Real estate – residential
1 unchanged paragraph
As of June September 30, 2026 and December 31, 2025 , OREO included a property with a carrying value of $ 1.4 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, li ability, reported in other liabilities on the Company's consolidated balance sheets as of both June September 30, 2026 and December 31, 2025, representing the SBA's contractual interest in the expected proceeds from the sale of the property.
A s As of June September 30, 2026, , seven six residential mortgage loans with a total amortized cost of $ 2.8 2.4 million were in the process of foreclosure.
Note 4: Borrowings 15 changes
The Bank had borrowings from the FHLB totaling $ 236.0 million and $ 150.0 million at both June September 30, 2026 and December 31, 2025, respectively. The FHL B borrowings required the Bank to hold $ 8.9 13.0 million and $ 9.1 million of FHLB stock at June September 30, 2026 and December 31, 2025, respectively, which is included in restricted equity investments on the consolidated balance sheets.
At June September 30, 2026 and December 31, 2025, the Bank also had letters of credit outstanding with the FHLB in the amounts of $ 70.1 million and $ 51.2 million, respectively, of which $ 70.0 million and $ 50.0 million, respectively, were for the purpose of collateral for public deposits with the Treasury Board of the Commonwealth of Virginia as of the same respective dates. Outstanding letters of credit reduce the available balance of the borrowing facility with the FHLB.
At June September 30, 2026 , 1-4 family residential loans, multi-family residential loans, and commercial real estate loans classified as held for investment with a lendable value of $ 366.3 378.3 million and securities with a lendable value of $ 155.6 142.5 million were pledged for the borrowing facility with the FHLB.
At June September 30, 2026 and December 31, 2025 , the secured facility totaled $ 521.9 520.8 million and $ 565.5 million, respectively, based on pledged collateral. Available balances on the FHLB credit facility were $ 301.9 214.7 million and $ 364.4 million as of June September 30, 2026 and December 31, 2025, respectively.
The following table presents information regarding FHLB borrowings outstanding as of both June 30, 2026 and December 31, 2025. the dates stated.
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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 and $ 0.4 million for the three and six months ended June 30, 2025, respectively.
On July 15, 2025 , the Company completed a $ 10.0 million partial redemption of the 2029 Notes. As of June 30, 2026 , the interest rate on the 2029 Notes, which resets quarterly, was 8.01 %. As of June 30, 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 June 30, 2026 and 2025, the effective interest rate on the 2029 Notes was 7.43 % a nd 7.48 %, respectively, inclusive of the amortization of the purchase accounting adjustment. For the six months ended June 30, 2026 and 2025 , the effective interest rate on the 2029 Notes was 7.68 % and 7.44 %, respectively, inclusive of the amortization of the purchase accounting adjustment (premium).
Subsequent to June 30, 2026, on July 15, 2026, the Company completed the redemption of the remaining balance of the 2029 Notes.
(Dollars in thousands)
Stated Interest Rate
Total FHLB 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, based on lendable value, of $ 45.3 43.4 million and $ 72.8 million as of June September 30, 2026 and December 31, 2025 , respectively, of which the Company had no outstanding advances as of either date.
The Company had an unsecured line of credit with a correspondent bank available for overnight borrowing, which totaled $ 10.0 mi llion as of both June September 30, 2026 and December 31, 2025. This line bears interest at the prevailing rates for such loans and is cancelable any time by the correspondent bank. As of both June September 30, 2026 and December 31, 2025, the Company had no outstanding advances on this unsecured line.
The Company had $ 0 and $ 14.7 million of subordinated notes, net, outstanding as of both June September 30, 2026 and December 31, 2025, Prior to June 1, respectively. Beginning in the third quarter of 2025, the Company's subordinated notes had been were 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 July 15, 2025 , the Company completed a $ 10.0 million partial redemption of the 2029 Notes, and on July 15, 2026, the Company redeemed the remainder of the 2029 Notes totaling $ 14.7 million. Upon the completion of this redemption, the Company had no outstanding subordinated notes. Interest expense on the 2029 Notes was ($ 0.1 ) million and $ 0.3 million for the three months ended September 30, 2026 and 2025 , respectively, and $ 0.4 million and $ 1.3 million for the nine months ended September 30, 2026 and 2025 , respectively. Upon the redemption of the remaining 2029 Notes in the third quarter of 2026, the Company recognized the remaining unamortized purchase accounting adjustment, which exceeded the coupon interest expense for the period and resulted in net negative interest expense.
Note 5: Fair Value 7 changes
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State and municipals
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State and municipals
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As of December 31, 2025 , there were no securities reported as Level 3 assets in the fair value hierarchy. During the second quarter of 2026, one security was transferred from Level 2 to Level 3 as there was no due to the absence of observable market price prices for a similar investment. As of June September 30, 2026 , one the corporate bond, totaling $ 500 thousand was reported at its with an amortized cost and of $ 0.5 million, was classified as a Level 3 asset in the fair value hierarchy. As of December 31, 2025, there were no securities reported as Level 3 assets in the fair value hierarchy.
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Balance as of June September 30, 2026
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Discounted cash flows technique
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Discounted cash flows technique
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Subordinated notes, net
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Note 6: Minimum Regulatory Capital Requirements 1 change
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The Company adopted Accounting Standards Codification ("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 %, 50 %, and 25 % in 2023, 2024, and 2025, respectively. The Bank made this irrevocable election effective with its first quarter 2023 call report. The CECL Transitional Amount was $ 8.1 million and was fully phased in the first quarter of 2026 as a reduction to the regulatory capital amounts and ratios. The full $ 8.1 million reduction is reflected as of June September 30, 2026 , compared to a $ 6.1 million reduction as of December 31, 2025.
24 unchanged paragraphs
Note 7: Commitments and Contingencies 4 changes
1 unchanged paragraph
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 September 30, 2026 and December 31, 2025 , the Company had outstanding loan commitments of $ 285.5 326.2 million and $ 247.2 million , respectively . Of these amounts, $ 35.7 34.2 million and $ 35.2 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 September 30, 2026 and December 31, 2025, commitments under outstanding financial stand-by letters of credit totaled $ 9.7 9.2 million and $ 6.3 mil lion, respectively. The credit risk of issuing stand-by letters of credit can be greater than the risk involved in extending loans to customers.
For the three and six nine months ended June September 30, 2026 , the Company recorded a $ 0.6 0.5 million and $ 1.0 million, respectively, of provision for credit losses for unfunded commitments due to an increase in committed but unfunded lines of credit to commercial construction borrowers. The reserve for unfunded commitments, which is included in other liabilities on the consolidated balance sheets, was $ 1.4 1.8 million and $ 0.8 million as o f June September 30, 2026 and December 31, 2025, respectively.
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 September 30, 2026 and December 31, 2025 , the Company had future commitments outstanding totaling $ 4.6 4.3 million and $ 4.9 million, respectively, related to these investments.
Note 8: Stock-Based Compensation 5 changes
1 unchanged paragraph
Stock-based compensation expense for employees, reported as a component of salaries and employee benefits in the consolidated statements of operations, was $ 0 0.1 million and $ 0.2 0.8 million for the three and six nine months ended June September 30, 2026 , respectively, compared to $ 2.2 1.2 million and $ 2.4 3.5 million for the three and six months ended June 30, same comparative periods of 2025. respectively.
Stock-based compensation expense for directors, reported as a component of other noninterest expense in the consolidated statements of operations, was $ 0.1 million and $ 0.2 million fo r the three and nine months ended September 30, 2026, respectively, compared to $ 0 and $ 0.1 million f or the same comparative periods of 2025.
Total unrecognized compensation expense related to time-based RSAs and PSAs as of June September 30, 2026 totaled $ 1.9 1.6 million. The ultimate amount of expense recognized is dependent upon the achievement of performance goals, which are generally established for specific fiscal years.
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Shares unvested and outstanding, June September 30, 2026
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(2) Of vested shares, shares totaling 141,149 143,956 were withheld as payment of taxes for the six nine months ended June September 30, 2026.
1 unchanged paragraph
Note 9: Earnings Per S hare 5 changes
For the six months ended June 30,
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 securities excluded from the computation of diluted EPS because their effects would have been anti-dilutive. As a result of the net loss reported for both the three and six nine months ended June September 30, 2026, all weighted average potentially dilutive securities have been excluded from the calculation of diluted EPS.
For the three months ended June September 30,
For the nine months ended September 30,
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Basic and diluted earnings (loss) earnings per common share
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Note 10: Segment Reporting 3 changes
Until March 2025, the Company operated through three reportable business segments: bank and financial group (formerly referred to as commercial banking), holding company activities, and mortgage banking. The bank and financial group business segment originates loans to and generates deposits from individuals and businesses and offers a broad range of financial services to its customers. Holding company or parent level activities are primarily associated with investments, borrowings, and certain noninterest expenses. The mortgage banking segment was sold in March 2025. As a result of the disposition, the remaining business segments were aggregated and reported in total to the Company's Chief Operating Decision Maker (the "CODM"). The CODM now evaluates performance on a Company-wide basis.
Company's Chief Operating Decision Maker (the "CODM"). The CODM now evaluates performance on a Company-wide basis.
The CODM evaluates the Company's performance based on net income (loss) and other measures of profitability, in order to evaluate staffing levels and assess resources for allocation to projects, and makes informed decisions on whether the Company's activities should be modified to align with the Company's overall near- and long-term strategies. The CODM is regularly provided with revenue and expense information at a level consistent with that disclosed in the Company's consolidated statements of operations.
Note 11: Legal Matters 2 changes
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On October 19, 2026, a purported shareholder of the Company filed an individual lawsuit against the Company and members of the Company's board of directors in the United States District Court for the Northern District of Illinois ( Bosley v. Blue Ridge Bankshares, Inc. et al . No. 26-cv-12818) alleging, among other things, that the registration statement on Form S-4 filed by HomeTrust in connection with the Merger omits or misrepresents allegedly material information in violation of federal securities laws. This complaint seeks relief enjoining the vote on the Merger and the Merger Agreement, attorneys' and experts' fees, and other remedies. The Company believes the plaintiff's claims are without merit.
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 case caption in the district court is Porter v. Blue Ridge Bankshares, Inc. (No. 3:24-cv-909 (E.D. Va.)). (the "Porter Case"). On August 15, 2025, the plaintiff appealed the dismissal of her claims to the U.S. Court of Appeals for the Fourth Circuit, Case No. 25-1970, asserting various violations of law. On August 7, 2026, the U.S. Court of Appeals for the Fourth Circuit affirmed the dismissal of Porter's claims at the District Court level Absent an unlikely and her time for further appeal to the Supreme Court of the United States, this extinguishes has lapsed. Porter's claims have been extinguished with prejudice.
MD&A 135 changes
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 and six nine months ended June September 30, 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.
1 unchanged paragraph
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. These forward-looking statements also include statements regarding the Company's pending merger with HomeTrust Bancshares, Inc. ("HomeTrust") pursuant to the Agreement and Plan of Merger dated August 16, 2026 (the "Merger Agreement") by and among the Company, HomeTrust and Kinloch Merger Sub, Inc. ("Merger Sub"). 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.
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• the timing and completion of the proposed merger with HomeTrust is dependent on the satisfaction of customary closing conditions, and various other factors that cannot be predicted with precision at this point;
• the occurrence of any event, change or other circumstance that could give rise to the right of HomeTrust, the Company or both to terminate the Merger Agreement;
• completion of the proposed merger with HomeTrust is subject to bank regulatory approvals and such approvals may not be obtained in a timely manner or at all or may be subject to conditions which may cause additional significant expense or delay the consummation of the proposed merger;
• potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger with HomeTrust;
• the diversion of attention and time by the management team of the Company from ongoing business operations and opportunities on merger-related matters;
• the outcome of any legal proceedings related to the proposed merger with HomeTrust, which have been and may be instituted against the Company;
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• the usage of advances and changes in technological technology and social media to develop timely and competitive products and services, and the acceptance of these products and services by new and existing customers;
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Pending Merger with HomeTrust Bancshares, Inc.
On August 16, 2026, the Company, HomeTrust, and Merger Sub, a wholly owned subsidiary of HomeTrust, entered into the Merger Agreement, which was jointly announced on August 17, 2026. Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation, and immediately following the Merger, the Company will merge with and into HomeTrust, with HomeTrust continuing as the surviving corporation, and then the Bank will merge with and into HomeTrust Bank, the wholly owned bank subsidiary of HomeTrust, with HomeTrust Bank as the surviving bank.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of the Company's common stock issued and outstanding will be converted into the right to receive 0.086 of a share of HomeTrust common stock, plus cash in lieu of any fractional shares.
In connection with the Merger Agreement, the Company offered holders of outstanding warrants to purchase the Company's common stock (the "Warrants") the opportunity to enter into warrant conversion agreements that provide for the automatic cashless exercise of the Warrants immediately prior to the effective time of the Merger, with the resulting shares of the Company's common stock converted into the right to receive the merger consideration. As of September 30, 2026, holders of Warrants to purchase an aggregate of 11,356,000 shares of the Company's common stock, representing approximately 47% of outstanding Warrants, had executed warrant conversion agreements. Outstanding Warrants not subject to warrant conversion agreements will be assumed by HomeTrust at the effective time of the Merger in accordance with their terms.
Based on the number of shares of the Company's common stock outstanding and reserved for issuance and the number of shares underlying Warrants subject to warrant conversion agreements, HomeTrust expects to issue approximately 8,314,956 shares of HomeTrust common stock to the Company's shareholders in the Merger. Following completion of the Merger, former shareholders of the Company are expected to own approximately 35% of HomeTrust's outstanding common stock, with existing HomeTrust stockholders owning approximately 65%.
The Merger Agreement contains customary representations, warranties, covenants and closing conditions, including receipt of required regulatory approvals, approval of the Merger Agreement by the Company's shareholders and approval of the issuance of HomeTrust common stock in connection with the Merger by HomeTrust's stockholders. The Merger Agreement also provides for a termination fee of $18.0 million payable by either party under certain specified circumstances.
Subject to receipt of required approvals and satisfaction of other closing conditions, the Merger is anticipated to close in the first quarter of 2027.
Merger-related expenses, including legal and investment banking fees, are presented separately on the consolidated statements of operations for the three and nine months ended September 30, 2026.
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On March 30, 2026, the Company announced that the holders of outstanding Warrants representing a majority of shares of common stock underlying such Warrants approved an amendment and restatement of the Warrants (the
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. As a result, the previously accrued $6.1 million (for dividends to be paid upon exercise of the Warrants) was reversed in the first quarter of 2026, and, upon execution of the amended and restated Warrants, the strike price of the Warrants reduces to $1.65 per common share.
6 unchanged paragraphs
Balance, September 30, 2026
Remaining exercise term (years) as of June September 30, 2026
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Balance, September 30, 2025
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Included in the reduction of loans held for investment in the first half of 2026 were payoffs and paydowns of $32.2 million of out-of-market loans. The decline in loans held for sale reflected the Company's complete exit from its indirect fintech lending activities in the first quarter of 2026. The allowance for credit losses ("ACL") was $22.0 million and $19.4 million as of June 30, 2026 and December 31, 2025, respectively. The increase since year-end primarily reflects the addition of specific reserves for out-of-market loans. Loans held for investment increased $19.6 million during the second quarter of 2026, primarily driven by growth in commercial and residential mortgage loans.
For the six months ended June 30, 2026, the Company reported a net loss of $0.5 million, or ($0.01) per diluted common share, compared to net income of $0.9 million, or $0.01 per diluted common share, for the same period of 2025. Net loss for the six months ended June 30, 2026 included after-tax severance expenses of $1.7 million, while net income for the six months ended June 30, 2025 included after-tax severance costs of $0.8 million.
Comparison of Financial Condition as of June September 30, 2026 and December 31, 2025
Total assets were $2.33 $2.34 billion as of June September 30, 2026, a decrease of $105.3 $89.5 million from $2.43 billion as of December 31, 2025. Approximately half Most of this decrease was attributable to a decrease in cash and due from banks ($54.3 ($56.0 million), while the remainder was due to decreases in securities available for sale ($15.9 ($34.3 million), and loans held for sale ($14.8 million). and Partially offsetting these decreases was an increase in loans held for investment ($12.3 ($20.9 million). The decline in cash and due from banks declined due was primarily attributable to the special cash dividend paid of totaling $53.2 million and paid in the reduction of brokered time deposits second quarter of approximately $52.9 million. 2026. The decline in available for sale securities was due to bonds called or matured ($9.6 ($16.7 million), and portfolio amortization ($16.4 ($22.9 million), and unrealized losses ($5.9 million), partially offset by bond purchases ($11.1 million).
The decline in loans held for sale reflected the Company's complete exit from its indirect fintech lending activities in the first quarter of 2026. During the second quarter of 2026, the Company partnered with a third-party residential mortgage originator, whereby the Company purchases adjustable-rate mortgage loans originated generally within its market area. The increase in loans held for investment was primarily driven by growth in residential mortgages arising from this agreement. Purchases under this program totaled $17.3 $71.9 million during the third and second quarter quarters of 2026, inclusive of purchase premiums. This program provides a primary mortgage product to the Company's consumer customers. The allowance for credit losses ("ACL") was $19.7 million and $19.4 million as of September 30, 2026 and December 31, 2025, respectively.
Total deposits were $1.86 $1.81 billion as of June September 30, 2026, a net decrease of $48.8 $97.0 million from December 31, 2025. The decline in the first half of 2026 was primarily due to a $52.9 an $81.9 million decrease in brokered time deposits. Excluding the decline in brokered deposits, deposits increased $4.1 decreased $15.1 million in the first half nine months ended September 30, 2026. Borrowings from the Federal Home Loan Bank of Atlanta ("FHLB") increased $86.0 million to $236.0 million as of September 30, 2026.
Total stockholders' equity decreased by $48.3 $56.1 million to $275.4 $267.6 million as of June September 30, 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.
Comparison of Results of Operations for the Three and Six Nine Months Ended June September 30, 2026 and 2025
For the three months ended June September 30, 2026, the Company reported a net loss of $1.3 $4.2 million, or ($0.01) ($0.05) per diluted common share, compared to net income of $1.3 $5.6 million, or $0.01 $0.06 per diluted common share, for the same period of 2025. Net loss for the three months ended June September 30, 2026 included an after-tax $3.2 million provision for credit losses of $6.6 million, compared to an after-tax benefit for recovery of credit losses of $0.5 $1.4 million for the same period of 2025. Provision for credit losses for the three months ended September 30, 2026 was primarily due to loans from associated with a single out-of-market relationship originated prior to 2024. were placed on nonaccrual at June 30, 2026, and a reserve was established for the loans in the amount of $2.9 million ($2.3 million after tax). Net loss for the three months ended June September 30, 2026 also included $0.3 million of after-tax merger-related expenses related to severance, compared to $0.2 million for the same period of 2025. Severance expenses include amounts associated with previously-announced executive officer transitions. $0.9 million. The 2025 period also included an after-tax benefit of $1.0 $2.3 million from the recovery of non-credit related amounts reserved for in after-tax loan fee income due to the prior year, as payoff of the Company concluded outstanding exit activities with a former fintech banking-as-a-service ("BaaS") partner. Company's largest previously criticized out-of-market loan.
For the nine months ended September 30, 2026, the Company reported a net loss of $4.6 million, or ($0.05) per diluted common share, compared to net income of $6.5 million, or $0.07 per diluted common share, for the same period of 2025. Net loss for the nine months ended September 30, 2026 included an after-tax provision for (recovery of) credit losses, severance expenses, and merger-related expenses of $9.3 million, $1.7 million, and $0.9 million, respectively, compared to ($2.0) million, $0.9 million, and $0, respectively, for the same period of 2025. The majority of the $9.3 million of after-tax provision for credit losses in the 2026 period was attributable to the aforementioned out-of-market loans originated prior to 2024. The 2025 period included $2.7 million of after-tax loan fee income due to the payoff of the aforementioned out-of-market loan relationship.
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 six nine months ended June September 30, 2026 was $16.5 $17.4 million and $33.4 $50.9 million, respectively, a decline of $3.3 $4.5 million and $5.4 $9.9 million from the same respective periods in 2025, primarily due to declines in average loan balances.
The following table presents the average balance sheets for the three months ended June September 30, 2026 and 2025. 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.
1 unchanged paragraph
For the three months ended June September 30,
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(3) Computed on a fully taxable equivalent basis assuming a 21.96% and 22.32% income tax rate for the three months ended June September 30, 2026 and 2025, respectively.
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(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $147 $324 thousand and $370 $453 thousand for the three months ended June September 30, 2026 and 2025, respectively.
(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $0 and $25 $22 thousand for the three months ended June September 30, 2026 and 2025, respectively.
(8) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $14 $188 thousand and $25 $18 thousand for the three months ended June September 30, 2026 and 2025, respectively.
1 unchanged paragraph
(10) Cost of funds is total interest expense divided by average total interest-bearing liabilities and average non-interest bearing demand deposits.
1 unchanged paragraph
Average balances of interest-earning assets decreased $244.9 $177.6 million to $2.28 $2.26 billion for the three months ended June September 30, 2026 compared to $2.53 from $2.44 billion for the same period of 2025. This decrease reflected lower average balances of loans held for investment and loans held for sale, interest-earning deposits in other banks, which decreased $55.8 million and $81.9 million, respectively, partially reflective of the Company's efforts to selectively reduce its portfolio reduction of out-of-market loans and its exit from its indirect fintech lending partnerships. lower balances of cash on deposit at the Federal Reserve Bank. The yield on average loans held for investment was 5.54% 5.64% and 5.80% 6.40% for the second third quarters of 2026 and 2025, respectively. During the decline in third quarter of 2025, fee income of $3.0 million was realized from the payoff of the aforementioned out-of-market loan, which positively affected the 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. by 62 basis points. Accretion of discounts on acquired loans had a three and seven and nine basis point positive effect on yield on loans held for investment yields for the respective periods. third quarters of 2026 and 2025, respectively. The exit of fintech lending operations in early 2026, represented by loans held for sale, also had a unfavorable effect on contributed to the decline in yields on interest-earning assets for the 2026 period.
Average balances of interest-bearing liabilities decreased $170.4 $91.3 million to $1.65 billion for the three months ended June September 30, 2026 compared to $1.82 from $1.74 billion for the same period of 2025. The decrease was primarily due to a $118.7 $121.6 million reduction of average balances of brokered deposits, reported in time deposits, and a $19.9 $13.3 million reduction in average subordinated notes and other borrowings due to the Company's redemption of a portion of its subordinated notes in the late second and early third quarters of 2025 and early third quarter of 2026, partially offset by a $43.4 million increase in average balances of FHLB borrowings.
Cost of deposits was 2.25% 2.22% for the three months ended June September 30, 2026, compared to 2.47% 2.51% for the same period of 2025, while cost of funds was 2.41% 2.35% and 2.63%, 2.65%, for the respective periods. Lower cost of deposits and funds in the second third quarter of 2026 relative to the year-ago period were primarily due to the reduction in average balances of higher cost brokered deposits paid off upon maturity and the partial redemption of the Company's subordinated notes. The recognition of an unamortized purchase accounting adjustment in the third quarter of 2026 upon the redemption of the Company's subordinated notes maturing October 15, 2029 (the "2029 Notes") decreased cost of funds by four basis points. Cost of deposits, excluding brokered deposits, was 1.97% 1.98% for the second third quarter of 2026 compared to 2.05% 2.13% for the second third quarter of 2025.
Net interest income (on a taxable equivalent basis) for the three months ended June September 30, 2026 was $16.6 $17.4 million, compared to $19.9 $21.9 million for the same period in 2025. Interest income declined $5.9 $6.8 million to $28.9 $29.4 million for the three months ended June September 30, 2026 from the same period of 2025, primarily due to the a combined $153.7 million decline in average balances of loans held for investment, loans held for sale, and interest-earning deposits in other banks. which collectively declined $244.1 million from Additionally, interest income for the three months ended June 30, 2025 period included $3.0 million of fee income upon the payoff of the aforementioned out-of-market loan. Interest expense declined $2.6 $2.3 million to $12.3 $12.0 million for the three months ended June September 30, 2026, largely driven by lower average balances of brokered deposits, which declined $118.7 $121.6 million from the same period of 2025. Net interest margin was 2.91% 3.08% and 3.15% 3.60% for the second third quarters of 2026 and 2025, respectively. 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.
The following table presents the average balance sheets for the six nine months ended June September 30, 2026 and 2025. 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.
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For the six months ended June 30,
For the nine months ended September 30,
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(3) Computed on a fully taxable equivalent basis assuming a 21.96% and 22.32% income tax rate for the six nine months ended June September 30, 2026 and 2025, respectively.
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(6) Includes accretion of fair value adjustments (discounts) on acquired loans of $311 thousand $0.6 million and $736 thousand $1.2 million for the six nine months ended June September 30, 2026 and 2025, respectively.
(7) Includes amortization of fair value adjustments (premiums) on assumed time deposits of $1 thousand and $60 $82 thousand for the six nine months ended June September 30, 2026 and 2025, respectively.
(8) Includes amortization of fair value adjustments (premiums) on assumed subordinated notes of $28 $216 thousand and $49 $67 thousand for the six nine months ended June September 30, 2026 and 2025, respectively.
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(10) Cost of funds is total interest expense divided by average total interest-bearing liabilities and average non-interest bearing demand deposits.
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Average interest-earning assets were $2.31 $2.29 billion for the six nine months ended June September 30, 2026, compared to $2.57 $2.53 billion for the same period of 2025, a $265.4 $235.8 million decrease. This decrease was primarily due to declines in average balances of loans held for investment and loans held for sale, which decreased $217.5 $163.0 million and $24.5 $21.6 million, respectively, partially reflective of the Company's efforts to selectively reduce its portfolio reduction of out-of-market loans held for investment and its the exit from its indirect of fintech lending partnerships. operations. Total interest income (on a taxable equivalent basis) decreased $11.8 $18.7 million for the six nine months ended June September 30, 2026 from the same period of 2025, primarily due to loan portfolio reductions, while the yield on interest-earning assets declined 40 51 basis points. The yield on average loans held for investment was 5.52% 5.56% and 5.75% 5.96% for the first halves of nine months ended September 30, 2026 and 2025, respectively. For the decline in yield nine months ended September 30, 2025, interest income on loans held for investment was primarily due to a decline in higher yielding out-of-market loans and lower accretion included $3.5 million of discounts fee income from the payoff of the aforementioned out-of-market loan, which had a 23 basis point positive effect on acquired the yield on loans held for investment. Accretion of discounts on acquired loans had a three five and seven eight basis point positive effect on yield on loans held for investment for the same respective nine months ended September 30, 2026 and September 30, 2025, respectively. The exit of fintech lending also contributed to the decline in yields for the comparative periods.
Average interest-bearing liabilities were $1.66 billion for the six nine months ended June September 30, 2026, compared to $1.86 $1.82 billion for the same period of 2025, a $198.2 $162.1 million decrease. Interest expense decreased by $6.5 $8.8 million to $24.8 $36.7 million for the six nine months ended June September 30, 2026, compared to the same period of 2025, driven primarily by the decline in higher-cost brokered deposits over the same respective periods.
Cost of deposits was 2.26% 2.25% for the six nine months ended June September 30, 2026, compared to 2.54% 2.53% for the same period of 2025, while cost of funds decreased to 2.41% 2.39% for the first half of nine months ended September 30, 2026 from 2.71% 2.69% for the first half same period of 2025. Lower cost of deposits and funds in the 2026 period was primarily the result of the payoff of higher cost brokered time deposits at maturity. Cost of deposits, excluding brokered deposits, was 1.97% for the first half of nine months ended September 30, 2026 compared to 2.12% for the same period of 2025.
Net interest income (on a taxable equivalent basis) was $33.5 $50.9 million for the six nine months ended June September 30, 2026, compared to $38.9 $60.8 million for the same period in 2025. Net interest margin was 2.90% 2.96% and 3.02% 3.21% for the first halves of nine months ended September 30, 2026 and 2025, respectively. Loan 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.
Provision for (Recovery of) Credit Losses . A provision for credit losses on loans of $3.5 $8.0 million was reported for the three months ended June September 30, 2026, whereas while a recovery of credit losses on loans of $0.7 $1.8 million was reported for the three months ended June September 30, 2025. The provision for credit losses on loans for the second third quarter of 2026 was primarily due to additions to specific loan reserves, net loan charge-offs, and loan portfolio growth of $19.6 million for the quarter. The provision for credit losses on loans for the 2026 period included a $2.9 million driven by reserve established needs for loans associated with a single the previously-mentioned out-of-market relationship loans originated prior to 2024. The recovery of credit losses on loans for the second third quarter of 2025 was primarily due attributable to loan portfolio reductions and recoveries of loans charged-off in prior periods.
A provision for credit losses on loans of $2.9 $10.9 million and a recovery of credit losses on loans of $0.7 $2.5 million were reported for the six nine months ended June September 30, 2026 and 2025, respectively. The provision for the nine months ended September 30, 2026 included $9.9 million attributable to the same out-of-market loans.
A provision for credit losses on unfunded commitments was $0.6 $0.5 million and $1.0 million for the three and six nine months ended June September 30, 2026, respectively. The second quarter of 2026 provision was provisions were due to an increase in committed but unfunded lines of credit to commercial construction borrowers. There was no provision for credit losses on unfunded commitments in the same respective periods of 2025.
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Residential mortgage banking income
Loss on sale of securities available for sale
Income on sale of mortgage servicing rights ("MSRs")
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For the six nine months ended
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Residential mortgage banking income
Loss on sale of securities available for sale
Income on sale of MSRs
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The decline in other noninterest income for the three months ended September 30, 2026, compared to the same period of 2025 was primarily attributable to the absence of $0.2 million in income recognized in the prior-year period from an other equity method investment made in 2022 and liquidated in the second quarter of 2026, as well as $0.3 million decline in swap transaction fees.
The declines decline in residential mortgage banking other noninterest income for the nine months ended September 30, 2026 periods compared to the same period in 2025 periods were was primarily attributable to a $0.8 million decline in residential mortgage banking income following the sale of the Company's mortgage division in the first quarter of 2025. The declines in other noninterest Additionally, income for the comparative periods were primarily the result of the $0.6 million loss recognized in the second quarter of 2026 upon the liquidation of from an equity method investment made in 2022 the Company's exit from fintech indirect lending declined $1.2 million, which included a $0.6 million loss recognized upon its liquidation in the first second quarter of 2026. and the receipt of proceeds heldback from the 2024 sale of mortgage servicing rights.
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Merger-related expenses
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For the six nine months ended
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Merger-related expenses
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Income Tax Expense . For the three and six months ended June 30, 2026, the effective income tax rates were 20.5% and 10.9%, respectively, compared to 27.0% and 2.8% for the three and six months ended June 30, 2025, respectively. The effective income tax rate for the first half of 2026 was primarily a result of the Company's marginal pre-tax loss in the period, while the effective income tax rate for the second quarter of 2025 was primarily driven by the potential elimination of deductibility of compensation costs in future taxable periods. The effective income tax rate for the six months ended June 30, 2025 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.
As the Company transitioned to a more traditional community banking model and remediated the requirements under the consent order with the Bank's primary regulator, which was terminated in the fourth quarter of 2025, the number of employees decreased from 442 as of December 31, 2024, to 302 311 as of December 31, September 30, 2025 and to 269 255 as of June September 30, 2026, or by 39% and 11%, respectively. 18%. As a result, the Company reported lower expenses for salaries and employee benefits and technology and communication costs. Included in salaries and employee benefits expense for the three and six nine months ended June September 30, 2026 were severance costs of $0.4 million $0 and $2.1 million, respectively, compared to $0.3 $0.1 million and $1.0 $1.1 million for the same respective periods of 2025. Higher advertising and marketing expenses for The 2026 periods compared to the 2025 periods were the result of marketing campaigns designed to drive growth, which launched in the second half of 2025. The decline in Federal Deposit Insurance Corporation ("FDIC") insurance premiums primarily reflected lower assessment rates for the 2026 periods relative to the 2025 periods. The declines decline in other noninterest expense during for the nine-months ended September 30, 2026 periods relative to the same period of 2025 periods were was primarily due to lower third-party loan servicing costs and losses on the repurchase of loans previously sold. These declines were partially offset by higher advertising and marketing expenses for the 2026 periods, which were the result of marketing campaigns designed to drive growth and which were launched in the second half of 2025. Additionally, $1.2 million of merger-related expenses were reported for the three and nine months ended September 30, 2026.
Income Tax Expense . For the three and nine months ended September 30, 2026, the effective income tax rates were 3.7% and 4.5%, respectively, compared to 25.3% and 22.9% for the three and nine months ended September 30, 2025, respectively. The lower effective income tax rates for the 2026 periods were primarily attributable to limitations on the tax deductibility of compensation and certain merger-related expenses.
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Loan Portfolio. The Company makes loans to commercial entities and to individuals. Loan terms vary as to interest rate, repayment, and collateral requirements based on the type of loan and the creditworthiness of the borrower. Credit risk tends to be geographically concentrated in that a majority of the loans are to borrowers located in the markets served by the Company. All loans are underwritten within specific lending policy guidelines that are established to maximize the Company's profitability within an acceptable level of business risk .
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The Company has pledged certain qualifying loans as collateral for borrowing facilities. Commercial and residential mortgages totaling $637.0 $658.2 million and $695.1 million were pledged with the Federal Home Loan Bank of Atlanta FHLB as of June September 30, 2026 and December 31, 2025, respectively. Construction and commercial and industrial loans totaling $45.3 $56.1 million and $72.8 $109.3 million as of June September 30, 2026 and December 31, 2025, respectively, were pledged with the Federal Reserve Bank of Richmond ("FRB") Discount Window.
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While the Federal Reserve has reduced the target Fed Funds rate by 175 150 basis points from a recent the peak in 2024, the current lending interest rate environment for commercial real estate ("CRE") loans has heightened lending risk due to a higher interest rate environment than had existed when the Company's loans may have been originated, particularly for commercial real estate ("CRE") loans. 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.
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The Bank's credit administration department led by the Chief Risk Officer and Chief Credit 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 June September 30, 2026, the Bank was in compliance with board approved limits.
The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of June September 30, 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 Financing Rate.
7 unchanged paragraphs
Allowance for Credit Losses . In determining the adequacy of the Company's ACL, management makes estimates based on facts available at the time the ACL is determined. Such estimation requires significant judgment at the time made. Management believes that the Company's ACL was adequate as of June September 30, 2026 and December 31, 2025. There can be no assurance, however, that adjustments to the ACL will not be required in the future. Changes in the economic assumptions underlying management's estimates and judgments, adverse developments in the economy, on a national basis or in the Company's market area, and changes in the circumstances of particular borrowers are criteria, among others that could increase the level of the ACL required, resulting in charges to the provision for credit losses for loans. In addition, bank regulatory agencies periodically review the Bank's ACL and may require an increase in the ACL or the recognition of further loan charge-offs, based on their judgment of the facts at the time of their review that may differ than that of management.
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and 55 more changes in the filing
Controls and procedures 1 change
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The Company maintains disclosure controls and procedures that are designed to provide assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods required by the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of June September 30, 2026 was carried out under the supervision and with the participation of management, including the Company's Chief Executive Officer and Chief Financial Officer. Based on and as of the date of such evaluation, the aforementioned officers concluded that the Company's disclosure controls and procedures were effective.
1 unchanged paragraph
Legal proceedings 1 change
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For information regarding legal proceedings in which the Company is involved, please see Note 11 to the unaudited consolidated financial statements included in this Form 10-Q, which is incorporated into this Part II, Item 1, by reference.
Risk factors 24 changes
Except as set forth below, there have been no material changes to the risk factors disclosed in the 2025 Form 10-K. Additional risks not presently known to the Company, or that are currently deemed immaterial, may also adversely affect the Company's business, financial condition, or results of operations. See also "Cautionary Note About Forward-Looking Statements," included in Part I, Item 2, of this Form 10-Q.
Because the exchange ratio is fixed and the market price of HomeTrust common stock will fluctuate, holders of the Company's common stock cannot be certain of the market value of the merger consideration they will receive.
In the Merger, each share of the Company's common stock issued and outstanding will be converted into the right to receive 0.086 of a share of HomeTrust common stock. This exchange ratio is fixed and will not be adjusted for changes in the market price of HomeTrust common stock or the Company's common stock. Changes in the market price of HomeTrust common stock prior to the Merger will affect the market value that holders of the Company's common stock will receive in the Merger.
Stock price changes may result from a variety of factors, including general market and economic conditions, impacts and disruptions resulting from changes in HomeTrust's or the Company's businesses, operations and prospects and regulatory considerations, many of which are beyond HomeTrust's or the Company's control. Therefore, the Company's shareholders will not know the market value of the consideration that they shareholders will receive until completion of the Merger.
The companies might not realize the anticipated cost savings and other benefits of the Merger within the expected time frames or at all .
The success of the Merger will depend in part on the ability of HomeTrust and the Company to realize the cost savings and other benefits expected to result from combining their respective businesses. Achieving these benefits will require effective integration of operations, processes, systems, and personnel. If HomeTrust and the Company are unable to successfully integrate their businesses in a manner that permits the expected efficiencies and cost savings to be realized, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than currently expected. In addition, the amount of actual cost savings and other benefits may be lower than anticipated, and the integration process may involve additional and unforeseen expenses.
Until completion of the merger, HomeTrust and the Company must continue to operate independently. The integration process could result in the loss of key employees, disruption of ongoing business operations, or inconsistencies in standards, controls, procedures and policies, which could adversely affect the companies' ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the Merger. Integration efforts may also divert management attention and resources from ongoing business operations. These integration-related risks could adversely affect both companies during the transition period and could continue to adversely impact the combined company for an undetermined period following completion of the Merger.
The Company may be unable to retain key personnel while the Merger is pending or after it is completed, which could result in loss of customers and make integration more difficult.
Until the completion of the Merger, the Company will continue to operate independently. Uncertainty regarding the effects of the Merger on employees, customers, and other stakeholders may adversely affect the Company. Such uncertainty could impair the Company's ability to attract, retain, or motivate key personnel and could lead customers or business partners to reconsider or change their existing relationships with the Company.
Retention of certain employees may be particularly challenging during the pendency of the Merger, as employees may be uncertain about their future roles with HomeTrust. Some employees may choose not to remain with their respective organizations while the Merger is pending or with HomeTrust after the Merger is completed. If key employees depart, the Company could experience operational disruptions, loss of institutional knowledge, expertise or other important capabilities, and the loss of existing customers or business relationships. Employee departures may also result in unanticipated recruitment and training costs, and management's attention may be diverted from integration efforts to hiring and onboarding replacements. The Company may not be able to identify, attract, or retain suitable replacement personnel in a timely manner, which could further impair its operations.
The Merger Agreement and termination fee provisions may discourage competing acquisition proposals for the Company.
Until the effective time or earlier termination of the Merger Agreement, the Company is generally prohibited under the Merger Agreement from initiating, soliciting, knowingly encouraging, inducing or knowingly facilitating the making, submission or announcement of any third-party acquisition proposal. While the Company's board of directors may take certain actions in response to a competing acquisition proposal if it determines in good faith that failing to do so would reasonably likely violate its fiduciary duties, taking such actions could entitle HomeTrust to terminate the Merger Agreement and receive a termination fee of $18.0 million. These provisions, including the termination fee, could discourage other companies from seeking to acquire the Company, even if a third party were willing to propose a transaction that offers greater value to the Company's shareholders than the merger consideration under the Merger Agreement. They could also result in a competing acquiror proposing a lower per-share price than it otherwise might have offered. In addition, the payment of the termination fee could have an adverse effect on the Company's financial condition.
The Merger Agreement subjects the Company to restrictions on its business activities prior to the effective time.
The Merger Agreement subjects the Company to restrictions on its business activities prior to the effective time. Subject to specified exceptions, the Merger Agreement obligates the Company to, and to cause each of its subsidiaries to, (i) use reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships and (ii) conduct its business in the ordinary course in all material respects. These restrictions could prevent the Company from pursuing certain business opportunities that arise prior to the effective time.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated.
The Merger requires (i) applications for approval to be filed with the Federal Reserve Board and the North Carolina Commissioner of Banks, (ii) an application for approval and a separate notification to be filed with the Virginia State Corporation Commission, Bureau of Financial Institutions, and (iii) a notification to be filed with the Office of the Comptroller of the Currency. Other approvals, waivers, or consents from additional regulators may also be required. Adverse developments in the regulatory standing of HomeTrust or the Company or other factors could delay or prevent the receipt of required approvals.
Regulators may impose conditions, limitations, obligations, or restrictions on the completion of the Merger, including requirements affecting post-closing operations or the terms of the transactions. While the Company does not expect that any such conditions or changes will be imposed, there can be no assurance that they will not occur. Any such conditions, limitations, obligations, or restrictions could delay completion of the Merger, impose additional costs, materially limit revenues, or reduce the anticipated benefits of the Merger, and could potentially result in delay or abandonment of the Merger. The completion of the Merger is conditioned upon no required regulatory approval containing a condition that would reasonably be expected to have a material adverse effect on HomeTrust after the Merger is completed and the absence of any order, decree or injunction that enjoins or prohibits or makes illegal the consummation of the Merger.
The Merger is subject to certain closing conditions that, if not satisfied or waived, will result in the Merger not being completed. Termination of the Merger Agreement could negatively affect the Company.
The Merger is subject to customary conditions to closing, including the receipt of required regulatory approvals, approval by HomeTrust stockholders and approval by the Company's shareholders. If any condition to closing is not satisfied or waived, to the extent permitted by law, the Merger will not be completed. In addition, if the Merger is not completed by August 16, 2027, either HomeTrust or the Company generally may choose to terminate the Merger Agreement. The parties can also mutually decide to terminate the Merger Agreement at any time. If the Merger is not consummated, the ongoing business, financial condition and results of operations of the Company may be materially adversely affected and the market price the Company's common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the Merger will be consummated. If the consummation of the Merger is delayed for any reason, the business, financial condition, and results of operations of the Company may be materially adversely affected.
The Company has incurred and will continue to incur substantial expenses in connection with the Merger. If the Merger is not completed, the Company would have to recognize these expenses, including, under certain circumstances, a termination fee, without realizing the expected benefits of the transaction. Any of the foregoing, or other risks arising in connection with the failure of or delay in consummating the Merger, including the diversion of management attention from pursuing other opportunities and the constraints in the Merger Agreement on the Company's ongoing business during the pendency of the Merger, could have a material adverse effect on the Company's business, financial condition and results of operations.
Litigation relating to the Merger could delay and/or enjoin the Merger.
On October 19, 2026, a purported shareholder of Blue Ridge filed an individual lawsuit against the Company and members of the Company's board of directors in the United States District Court for the Northern District of Illinois ( Bosley v. Blue Ridge Bankshares, Inc. et al. No. 26-cv-12818) alleging, among other things, that the registration statement on Form S-4 in connection with the Merger omits or misrepresents allegedly material information in violation of federal securities laws. This complaint seeks relief enjoining the vote on the Merger and the Merger Agreement, attorneys' and experts' fees, and other remedies.
Additional lawsuits against the Company, HomeTrust and/or the directors and officers of either company in connection with the Merger may be filed. The outcome of the pending and any additional future litigation is uncertain. If any case is not resolved, the lawsuit(s) could prevent or delay completion of the Merger and result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers.
One of the conditions to the closing of the Merger is that no party to the Merger Agreement shall be subject to any order, decree or injunction issued by a court or agency of competent jurisdiction or a governmental authority that enjoins or prohibits or makes illegal the consummation of the Merger. As such, if plaintiffs are successful in obtaining an injunction prohibiting the completion of the Merger on the agreed-upon terms, then such injunction may prevent the Merger from being completed, or from being completed within the expected timeframe. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger are completed may adversely affect the combined company's business, financial condition, results of operations and cash flows.
Unregistered sales of stock 5 changes
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The following table provides information regarding repurchases or withholdings of common stock for the three months ended June September 30, 2026.
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June 1, 2026 through June 30, 2026
May July 1, 2026 through May July 31, 2026
August 1, 2026 through August 31, 2026
April September 1, 2026 through April September 30, 2026
1 unchanged paragraph
Other information 1 change
During the fiscal quarter ended June September 30, 2026, none of the Company's directors or officers ( as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K).
Exhibits 9 changes
Employment Agreement, dated May 24, 2024, between Blue Ridge Bank, National Association and Grace Vallacchi.
Employment Agreement, dated December 17, 2024, between Blue Ridge Bank, National Association and Raymond Knott.
Agreement and Plan of Merger, dated August 16, 2026, by and among HomeTrust Bancshares, Inc., Blue Ridge Bankshares, Inc. and Kinloch Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 of Blue Ridge Bankshares, Inc.'s Current Report on Form 8-K filed on August 17, 2026).*
Form of Warrant Conversion Agreement (included as Exhibit C to the Merger Agreement filed as Exhibit 2.1)
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The following materials from Blue Ridge Bankshares, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended June September 30, 2026, formatted in Inline Extensible Business Reporting Language (XBRL), include: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Changes in Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) related notes (filed herewith).
The cover page from Blue Ridge Bankshares, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended June September 30, 2026, formatted in Inline XBRL (included with Exhibit 101).
Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedule to the SEC upon request.
2 unchanged paragraphs
Date: August 10, 2026
Date: November 5, 2026
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Unchanged: Notes to the financial statements, Market risk, Defaults on senior securities, Mine Saf ety Disclosures
Only in the earlier filing: Note 12: Subsequent Events
Compared by code from the two filings' text and XBRL. Not advice.
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