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Minimum Regulatory Capital Requirements
 9 Months Ended
Sep. 30, 2024
Regulatory Matters [Abstract]  
Minimum Regulatory Capital Requirements

Note 7 – Minimum Regulatory Capital Requirements

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, possibly

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

Banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios of 2.50% for all ratios except the tier 1 leverage ratio. If a banking organization dips into its capital conservation buffer, it is subject to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers. Federal and state banking regulations place certain restrictions on dividends paid by the Company. The total amount of dividends that may be paid at any date is generally limited to retained earnings of the Company.

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

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

The Company adopted ASC 326, Financial Instruments - Credit Losses (referred 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 at adoption to retained earnings (“CECL Transitional Amount”) over a three-year period. The three-year phase-in of the CECL Transitional Amount to regulatory capital is 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 following tables present the capital ratios to which banks are subject to be adequately and well capitalized, as well as the capital and capital ratios for the Bank as of the dates stated. Adequately capitalized ratios include the conservation buffer, if applicable. The following table also includes the capital adequacy ratios to which bank holding companies are subject. On January 1, 2024, the Company became subject to these ratios. Also presented are the minimum capital ratios set forth in the Consent Order for the Bank and the related capital amounts for both the leverage ratio and the total capital ratio. The CECL Transitional Amount was $8.1 million, of which $4.1 million and $2.0 million reduced the regulatory capital amounts and capital ratios as of September 30, 2024 and December 31, 2023, respectively.

 

 

September 30, 2024

 

 

 

Actual

 

 

For Capital Adequacy Purposes

 

 

To Be Well Capitalized

 

 

Minimum Capital Ratios

 

(Dollars in thousands)

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total risk based capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

367,736

 

 

 

16.64

%

 

$

232,080

 

 

 

10.50

%

 

$

221,028

 

 

 

10.00

%

 

$

287,337

 

 

 

13.00

%

Blue Ridge Bankshares, Inc.

 

$

427,441

 

 

 

19.26

%

 

$

177,546

 

 

 

8.00

%

 

n/a

 

 

n/a

 

 

n/a

 

 

n/a

 

Tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

346,545

 

 

 

15.68

%

 

$

187,875

 

 

 

8.50

%

 

$

176,823

 

 

 

8.00

%

 

n/a

 

 

n/a

 

Blue Ridge Bankshares, Inc.

 

$

345,839

 

 

 

15.58

%

 

$

133,186

 

 

 

6.00

%

 

n/a

 

 

n/a

 

 

n/a

 

 

n/a

 

Common equity tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

346,545

 

 

 

15.68

%

 

$

154,720

 

 

 

7.00

%

 

$

143,669

 

 

 

6.50

%

 

n/a

 

 

n/a

 

Blue Ridge Bankshares, Inc.

 

$

345,839

 

 

 

15.58

%

 

$

99,889

 

 

 

4.50

%

 

n/a

 

 

n/a

 

 

n/a

 

 

n/a

 

Tier 1 leverage (to average assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

346,545

 

 

 

11.56

%

 

$

119,912

 

 

 

4.00

%

 

$

149,890

 

 

 

5.00

%

 

$

299,779

 

 

 

10.00

%

Blue Ridge Bankshares, Inc.

 

$

345,839

 

 

 

11.46

%

 

$

120,712

 

 

 

4.00

%

 

n/a

 

 

n/a

 

 

n/a

 

 

n/a

 

 

 

 

December 31, 2023

 

 

 

Actual

 

 

For Capital Adequacy Purposes

 

 

To Be Well Capitalized

 

 

Minimum Capital Ratios

 

(Dollars in thousands)

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total risk based capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

270,293

 

 

 

10.25

%

 

$

276,842

 

 

 

10.50

%

 

$

263,659

 

 

 

10.00

%

 

$

342,757

 

 

 

13.00

%

Tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

239,775

 

 

 

9.09

%

 

$

224,111

 

 

 

8.50

%

 

$

210,928

 

 

 

8.00

%

 

n/a

 

 

n/a

 

Common equity tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

239,775

 

 

 

9.09

%

 

$

184,562

 

 

 

7.00

%

 

$

171,379

 

 

 

6.50

%

 

n/a

 

 

n/a

 

Tier 1 leverage (to average assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

239,775

 

 

 

7.49

%

 

$

128,001

 

 

 

4.00

%

 

$

160,001

 

 

 

5.00

%

 

$

320,003

 

 

 

10.00

%