Blue Ridge Bankshares: Undervalued with Fundamental Issues

Blue Ridge Bankshares is a small bank in Virginia trading at a low valuation, but has fundamental issues to address, making it a risky investment for long-term investors. The bank needs to fix its problems before it can be considered a safe investment opportunity.

Blue Ridge Bankshares Inc. (BRBS), a small regional bank based in Richmond, Virginia, is trading at a relatively low valuation, making it an attractive investment opportunity for some. However, a closer look at the bank's financial health reveals several fundamental issues that make it a risky investment for long-term investors.

The bank's market value is approximately $320 million, and it operates twenty-seven banking offices across Virginia and North Carolina, offering a range of banking services including retail and commercial banking, mortgage lending, and wealth management [2]. However, Blue Ridge Bankshares faces intense competition from larger financial institutions in the state, with a deposit market share of only 0.8% compared to the top five institutions holding about 67% of the market share [2].

One of the significant challenges for Blue Ridge Bankshares is its high loan-to-deposits (LtD) ratio of 97% at the end of 2024, which is above the average for regional banks. This ratio indicates that the bank's loan book is heavily funded by its deposit base, leaving little room for growth [2]. Additionally, the bank's decision to exit its fintech business has had a significant impact on its balance sheet, with total assets decreasing from $3.1 billion in 2023 to $2.73 billion at the end of 2024 [2].

The bank's financial performance has been mixed over the past few years. While it reported strong growth due to acquisitions, such as the merger with Bay Banks of Virginia in 2021, its financial performance was negatively impacted by a goodwill impairment of nearly $27 million related to an acquisition performed in 2019, leading to a net loss of about $15 million [2]. In the first half of 2025, the bank's net interest income declined by about 4% year-over-year due to lower interest rates and a lower loan book, while other income also declined by 21% year-over-year [2].

Technical analysis of BRBS stock provides a mixed outlook. The stock has experienced a downtrend since July 17, 2025, with a total price change of -12.59% during this period. However, the stock has shown some positive signals in the mid-term, with the SMA_20 being above the SMA_60, indicating a strong bullish trend [1]. The stock also has some resistance levels at $4.04 and $4.27, and support levels at $3.32 and $3.09 [1]. The short sale ratio of BRBS as of August 4, 2025, is 29.99%, indicating that short sellers may be anticipating a price reversion [1].

In conclusion, while Blue Ridge Bankshares Inc. is trading at a low valuation, its high loan-to-deposits ratio, mixed financial performance, and intense competition make it a risky investment for long-term investors. The bank needs to address these fundamental issues before it can be considered a safe investment opportunity.

References:
[1] https://intellectia.ai/stock/BRBS/forecast
[2] https://seekingalpha.com/article/4812749-blue-ridge-bankshares-discounted-valuation-justified-by-fundamental-issues