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## NOTES TO THE CONSOLIDATED FEVANCUL STATEMENTS 

## BLUE RIDGE BANKSHARES, INC. 

## December 31,2012 

## Note 4. Loans Receivable and Related Allowance for Loan Losses (Continued) 

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The following is a summary of the changes in the allowance for loan losses for the years ended December 31, 2012 and 2011 (in thousands): 

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The allowance for loan losses is based on estimates, and actual losses will vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALLL that is representative of the risk found in the components of the portfolio at any given date. 

At December 31, 2012 loans with a carrying amount of $48.4 million were pledged to secure short- term and long-term borrowings with the Federal Home Loan Bank. 

