SDNY COURTHOUSE, August 17 –
HomeTrust Bancshares and Blue Ridge Bankshares announced a
$448.1 million proposed all-stock merger on August 17,
which they brag would create a combined bank with more
than $7 billion in assets and over 60 branches across
North Carolina, Virginia, and the Southeast.
The timing is worth pausing on: under
today's $1.6 billion Community Reinvestment Act threshold,
a $7 billion combined institution faces full CRA review as
a matter of course. Under the $10 billion threshold the
OCC and FDIC have jointly proposed, it would not — placing
this merger squarely inside the exact band of banks the
pending rule would newly exempt from the lending,
investment, and service tests examiners currently apply,
as Inner City Press has reported.
That threshold question is not abstract for
Blue Ridge specifically. Blue Ridge Bank, N.A. spent much
of the past four years under serious federal regulatory
pressure. In September 2022, the OCC entered a Written
Agreement with the bank over deficiencies in its oversight
of fintech "banking-as-a-service" partnerships. When Blue
Ridge failed to fix the problems identified, the OCC
escalated in January 2024 to a formal Consent Order,
declaring the bank in "troubled condition" — a designation
reserved for institutions facing the most serious
supervisory concern — citing "systemic internal controls
breakdowns," "weak independent testing," and "insufficient
BSA staffing" in its Bank Secrecy Act and anti-money
laundering compliance program. The bank was barred from
starting new fintech partnerships without OCC permission
and ordered to maintain elevated capital ratios.
A prior proposed merger, with FVCBankcorp
in 2022, was called off entirely after the OCC raised
"regulatory concerns." Blue Ridge did not exit its consent
order until November 2025 — less than a year before
agreeing to be acquired by HomeTrust. Blue Ridge's
own CRA record, from an earlier Performance Evaluation,
states plainly that "the bank exhibits poor distribution
of lending to borrowers of different income levels" in its
assessment areas — a documented, specific weakness in
exactly the category CRA exams exist to catch.
Fair Finance Watch has reviewed each
banks 2025 Home Mortgage Disclosure Act data. In North
Carolina in 2024 HomeTrust made 766 mortgage loans to
whites - and only 31 to African Americans, with fully 16
denials to African Americans. Blue Ride Bank made only
seven loans to African Americans in Virginia in 2025, and
32 to whites. These are disparate. And from the exams
themselves:
BLUE RIDGE BANK, N.A. — CRA Performance
Evaluation, March 8, 2023 "A substantial majority of
the bank's loans are outside its Assessment Areas." Only
12.7% by number, 11.7% by dollar volume, were made inside
the bank's own assessment areas. Harrisonburg, VA
assessment area: "The bank did not originate any loans in
low-income census tracts" during the entire 2019-2021
evaluation period. Harrisonburg, VA, again: "The level of
CD loans reflects poor responsiveness to community
development needs in the AA. The bank did not originate
any CD loans in the Harrisonburg AA during the evaluation
period." Washington, DC and Virginia Beach assessment
areas: "BRB did not make any qualified investments" in
either area, and "bank personnel did not provide any
community development services" in either — explicitly
rated "weaker than the bank's overall CD Test
performance."
Greensboro, NC (the bank's only North
Carolina assessment area): "BRB provides poor
responsiveness to CD needs through CD services. BRB
personnel did not provide any CD services during the
evaluation period." Attributed by the bank's own
management to "significant staff turnover."
Charlottesville, VA: distribution of loans to both
low-income and moderate-income borrowers fell below the
percentage of such families in the area, with
moderate-income lending also below peer/aggregate
lending.
HOMETRUST BANK — CRA Performance
Evaluation, July 1, 2024 (overall rating: confirm exact
rating from cover — evaluation covers 2021-2022 HMDA
data) Polk County, NC NonMSA assessment area: "the
bank's performance for refinance and home purchase lending
are poor, and performance for home improvement lending is
very poor" (2021). "On a combined basis, HMDA lending
performance is considered poor." Same Polk County area:
"the geographic distribution of lending performance is
poor" overall, with 2021 moderate-income-tract lending
(3%) trailing both aggregate lenders (6.2%) and
owner-occupied housing share (7.3%) — "considered poor."
Roanoke, VA MSA: "the geographic loan distribution within
this assessment area is considered poor for residential
mortgage... and is considered poor overall," with small
business lending ($8.3M) dwarfed by residential mortgage
lending ($107.6M) in the same breath. Roanoke, VA MSA,
2022: "HTB did not originate any residential mortgage loan
products in low-income census tracts," while aggregate
lenders reported 1.2% — and "performance for home purchase
lending" in the same area separately rated "very poor."
Roanoke, VA MSA, 2022 combined:
moderate-income tract lending (11.9%) "lagged" aggregate
(20.6%) and owner-occupied housing share (20.5%) —
"Overall, the bank's 2022 performance is considered poor."
We'll have more on this.
None of this — the recent
troubled-condition designation, the aborted prior merger,
the documented lending-distribution weakness — would
necessarily receive full CRA scrutiny in a future
transaction of comparable size if the pending threshold
rule takes effect. A bank with Blue Ridge's specific
regulatory history is precisely the kind of institution
the convenience-and-needs review is designed to examine
closely before permitting it to combine with another
institution and grow. Watch this site.
