John Marshall Bancorp, Inc. Reports Margin Expansion, Pristine Asset Quality, and Strong Core Deposit Growth and Loan Demand

RESTON, Va.--()--John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported net income of $3.9 million ($0.27 per diluted common share) for the quarter ended June 30, 2024 and $8.1 million ($0.57 per diluted common share) for the six months ended June 30, 2024. Pre-tax, pre-provision earnings (Non-GAAP) was $4.7 million for the quarter ended June 30, 2024 compared to $4.6 million for the quarter ended March 31, 2024.

Selected Highlights

  • Margin Expansion – The Company improved its earning asset yield and funding composition. For the three months ended June 30, 2024, the Company reported a nine basis point increase in net interest margin when compared to the three months ended March 31, 2024.
  • Net Interest Income Growth – Annualized net interest income grew 11.5% during the three months ended June 30, 2024 when compared to the same period ended March 31, 2024. The three months ended June 30, 2024 represented the highest quarter of net interest income since the first quarter of 2023.
  • Core Deposit Growth – The Company grew non-interest bearing demand deposits $32.5 million or 32.3% annualized from March 31, 2024 and reduced wholesale deposits approximately $13.4 million or 17.3% annualized from March 31, 2024. Certificates of deposit as a percentage of total deposits decreased 2.3% from March 31, 2024 to June 30, 2024. Non-interest bearing deposits to total deposits was 22.8% as of June 30, 2024 versus 21.3% as of March 31, 2024.
  • Loan Pipeline Growth – The Company’s loan pipeline remained strong with $88.4 million in new commitments recorded during the three months ended June 30, 2024. New commitments represent loans closed, but not necessarily fully funded as of June 30, 2024.
  • Pristine Asset Quality – For the nineteenth consecutive quarter, the Company had no non-performing loans, no other real estate owned and no loans 30 days or more past due. As of June 30, 2024, there were no loans greater than 10 days past due. There were no charge-offs during the quarter. The Company continues to adhere to strict underwriting standards and proactively manages the portfolio. As of June 30, 2024, there were no credits classified as substandard, doubtful or loss.
  • Loan Portfolio Strength – The Company believes its loan portfolio remains of exceptionally high quality. As of June 30, 2024, the Company’s office related commercial real estate (“CRE”) non-owner occupied and owner-occupied portfolios had a weighted average loan-to-values of 49.0% and 58.6%, respectively, and weighted average debt service coverage ratios of 1.9x and 3.7x, respectively. The overwhelming majority of the Company’s office CRE portfolio is located outside of the Washington, D.C. central business district.
  • Rigorous Expense Management – The Company remains focused on managing costs while investing for future growth and continues to revisit contracts for further savings opportunities. Non-interest expense for the three months ended June 30, 2024 was $7.9 million compared to $7.9 million for the three months ended March 31, 2024 and $7.8 million for the three months ended June 30, 2023.

Chris Bergstrom, President and Chief Executive Officer, commented, “The second quarter of 2024 reflects improvements in margin and net interest income as a result of purposeful actions we have taken in combating an unprecedented rate environment. Our non-interest income initiatives are growing and contributing an increasing percentage of revenue. I remain optimistic about our growth for the remainder of the year given the strong loan pipeline and opportunities we are seeing in the market. The strength of our balance sheet, the growing loan pipeline and the continued improvement in our funding keep us well-positioned for the future.”

Balance Sheet, Liquidity and Credit Quality

Total assets were $2.27 billion at June 30, 2024, $2.24 billion at December 31, 2023, and $2.36 billion at June 30, 2023.

Total loans, net of unearned income, increased $57.4 million or 3.2% to $1.83 billion at June 30, 2024, compared to $1.77 billion at June 30, 2023. The increase in loans was primarily attributable to growth in the residential mortgage and investor real estate loan portfolios, partially offset by a decrease in the construction & development loan portfolio.

Total loans, net of unearned income, increased $1.3 million during the quarter ended June 30, 2024 from $1.83 billion at March 31, 2024. As mentioned in the selected highlights above, the Company’s loan pipeline headed into the third quarter of 2024 is robust and gaining momentum.

The carrying value of the Company’s fixed income securities portfolio was $241.6 million at June 30, 2024, $253.4 million at March 31, 2024 and $422.7 million at June 30, 2023. The decrease in carrying value of the Company’s fixed income securities portfolio since June 30, 2023 was primarily attributable to the July 2023 sale of certain available-for-sale investment securities, as previously disclosed. As of June 30, 2024, 95.7% of our bond portfolio carried the implied guarantee of the United States government or one of its agencies. At June 30, 2024, 62% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At June 30, 2024, the fixed income portfolio had an estimated weighted average life of 4.2 years. The available-for-sale portfolio comprised approximately 64% of the fixed income securities portfolio and had a weighted average life of 3.0 years at June 30, 2024. The held-to-maturity portfolio comprised approximately 36% of the fixed income securities portfolio and had a weighted average life of 6.3 years at June 30, 2024. The Company did not purchase or sell any fixed income securities during the three month period ended June 30, 2024.

The Company’s balance sheet remains highly liquid. The Company’s liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $796.0 million as of June 30, 2024 compared to $638.9 million as of December 31, 2023 and represented 35.1% and 28.5% of total assets, respectively. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at June 30, 2024.

Total deposits were $1.91 billion at June 30, 2024, $1.91 billion at December 31, 2023 and $2.05 billion at June 30, 2023. The $11.9 million increase in deposit balances during the quarter was primarily due to a 32.3% annualized increase in non-interest bearing demand deposits of $32.5 million and 14.6% annualized increase in interest bearing demand deposit deposits of $23.4 million. The Bank continued to manage reductions in costlier wholesale deposits including brokered and QwickRate CDs. As of June 30, 2024, the Company had $677.0 million of deposits that were not insured or not collateralized by securities compared to $634.1 million at December 31, 2023.

The Company refinanced its $54.0 million advance and secured an additional $23.0 million from the Bank Term Funding Program (“BTFP”) in January 2024. In doing so, we obtained lower funding costs relative to wholesale deposits and the prior outstanding BTFP advance. The $77.0 million BTFP advance matures January 2025, bears interest at a fixed rate of 4.76% and can be prepaid at any time, in whole or in part, without penalty prior to maturity. Total borrowings as of June 30, 2024 consisted of subordinated debt totaling $24.7 million and the BTFP advance totaling $77.0 million.

Shareholders’ equity increased $16.4 million or 7.5% to $235.3 million at June 30, 2024 compared to $219.0 million at June 30, 2023. Book value per share was $16.54 as of June 30, 2024 compared to $15.50 as of June 30, 2023, an increase of 6.7%. The year-over-year change in book value per share was primarily due to the Company’s earnings over the previous twelve months and a decrease in accumulated other comprehensive loss. This increase was partially offset by increased cash dividends paid and increased share count from shareholder option exercises and restricted share award issuances. The decrease in accumulated other comprehensive loss was primarily attributable to the July 2023 sale of certain available-for-sale investment securities, as previously disclosed, and decreases in unrealized losses on our available-for-sale investment portfolio due to market value increases. For the three months ended June 30, 2024 basic earnings per share of $0.27 exceeded the $0.25 dividend declared during the quarter. Book value per share increased from $16.51 as of March 31, 2024.

The Bank’s capital ratios at June 30, 2024 remained well above regulatory thresholds for well-capitalized banks. As of June 30, 2024, the Bank’s total risk-based capital ratio was 16.4%, compared to 16.1% at June 30, 2023 and 15.7% at December 31, 2023 (GAAP). As outlined below, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at June 30, 2024 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized (Non-GAAP). Refer to “Explanation of Non-GAAP Measures” and the “Reconciliation of Certain Non-GAAP Financial Measures” table for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank Regulatory Capital Ratios (As Reported)

 

 

 

Well-Capitalized Threshold

 

 

June 30, 2024

 

 

December 31, 2023

 

 

June 30, 2023

 

Total risk-based capital ratio

 

 

10.0

%

 

16.4

%

 

15.7

%

 

16.1

%

Tier 1 risk-based capital ratio

 

 

8.0

%

 

15.4

%

 

14.7

%

 

15.0

%

Common equity tier 1 ratio

 

 

6.5

%

 

15.4

%

 

14.7

%

 

15.0

%

Leverage ratio

 

 

5.0

%

 

12.2

%

 

11.6

%

 

11.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Bank Regulatory Capital Ratios (Hypothetical Scenario of Selling All Bonds at Fair Market Value - Non-GAAP)

 

 

 

Well-Capitalized Threshold

 

 

June 30, 2024

 

 

December 31, 2023

 

 

June 30, 2023

 

Adjusted total risk-based capital ratio

 

 

10.0

%

 

15.3

%

 

14.7

%

 

14.3

%

Adjusted tier 1 risk-based capital ratio

 

 

8.0

%

 

14.3

%

 

13.5

%

 

13.0

%

Adjusted common equity tier 1 ratio

 

 

6.5

%

 

14.3

%

 

13.5

%

 

13.0

%

Adjusted leverage ratio

 

 

5.0

%

 

11.2

%

 

10.6

%

 

9.9

%

The Company recorded no charge-offs during the six months ended June 30, 2024. As of June 30, 2024, the Company had no loans greater than 10 days past due, no non-accrual loans, and no other real estate owned assets.

At June 30, 2024, the allowance for loan credit losses was $18.4 million or 1.01% of outstanding loans, net of unearned income, compared to $18.7 million or 1.02% of outstanding loans, net of unearned income, at March 31, 2024. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, resulted primarily from changes in the composition of the loan portfolio, improved economic forecasts used in the quantitative portion of the model and an assessment of management’s considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.

At June 30, 2024, the allowance for credit losses on unfunded loan commitments was $0.7 million compared to $0.7 million at March 31, 2024.

The Company did not have an allowance for credit losses on held-to-maturity securities as of June 30, 2024 or March 31, 2024. As of June 30, 2024, 93.6% of our held-to-maturity portfolio carried the implied guarantee of the United States Government or one of its agencies.

The Company’s owner occupied and non-owner occupied CRE portfolios continue to be of sound credit quality. The following table provides a detailed breakout of the two aforementioned segments as of June 30, 2024, demonstrating their strong debt-service-coverage and loan-to-value ratios.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

Owner Occupied

Non-owner Occupied

Asset Class

Weighted Average Loan-to-Value(1)

 

Weighted Average Debt Service Coverage Ratio(2)

 

Number of Total Loans

 

Principal Balance(3)
(Dollars in thousands)

Weighted Average Loan-to-Value(1)

 

Weighted Average Debt Service Coverage Ratio(2)

 

Number of Total Loans

 

Principal Balance(3)
(Dollars in thousands)

Warehouse & Industrial

56.5

%

2.8

x

54

$

81,825

49.6

%

2.9

x

43

$

106,162

Office

58.6

%

3.7

x

130

 

80,744

49.0

%

1.9

x

59

 

115,830

Retail

61.0

%

3.3

x

40

 

68,794

50.4

%

1.9

x

141

 

416,811

Church

29.4

%

2.6

x

19

 

33,635

- -

 

- -

 

- -

 

- -

Hotel/Motel

- -

 

- -

 

- -

 

- -

59.2

%

2.6

x

9

 

51,339

Other(4)

48.3

%

4.0

x

43

 

84,646

42.4

%

3.0

x

10

 

32,277

Total

 

 

 

 

286

$

349,644

 

 

 

 

262

$

722,419

___________________________

(1)

Loan-to-value is determined at origination date and is divided by principal balance as of June 30, 2024.

(2)

The debt service coverage ratio (“DSCR”) is calculated from the primary source of repayment for the loan. Owner occupied DSCR’s are derived from cash flows from the owner occupant’s business, property and their guarantors, while non-owner occupied DSCR’s are derived from the net operating income of the property.

(3)

Principal balance excludes deferred fees or costs.

(4)

Other asset class is primarily comprised of schools, daycares and country clubs.

Income Statement Review

Quarterly Results

The Company reported net income of $3.9 million for the second quarter of 2024, a decrease of $0.6 million when compared to $4.5 million for the second quarter of 2023.

Net interest income for the second quarter of 2024 increased $72 thousand or 0.6% compared to the second quarter of 2023, driven primarily by the increase in yield on and volume of interest-earning assets outpacing the increase in costs of interest-bearing liabilities coupled with the decrease in overall funding balances. The annualized net interest margin for the second quarter of 2024 was 2.19% as compared to 2.09% for the same quarter of the prior year. The increase in net interest margin was primarily due to increases in yields on the Company’s interest-earning assets.

The yield on interest earning assets was 4.85% for the second quarter of 2024 compared to 4.27% for the same period in 2023. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan portfolio and deposits in banks as a result of increases in interest rates and repricing of assets subsequent to the second quarter of 2023. The cost of interest-bearing liabilities was 3.81% for the second quarter of 2024 compared to 2.99% for the same quarter in the prior year. The increase in the cost of interest-bearing liabilities was primarily due the increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the second quarter of 2023. The increase in the overall cost of interest-bearing liabilities in the second quarter of 2024 relative to the same period of the prior year is largely due to rate hikes totaling 5.25% by the Federal Reserve Bank since the beginning of 2023, which has increased cost of funds and compressed net interest margins across the banking industry. The Company continues to improve its funding mix. Average non-interest bearing demand deposits represented 21.8% of average funding for the three months ended June 30, 2024 versus 20.8% for the three months ended June 30, 2023. Average time deposits represented 39.0% of average funding for the three months ended June 30, 2024 versus 42.8% for the three months ended June 30, 2023.

The Company recorded a $292 thousand release of provision for credit losses for the second quarter of 2024 compared to a release of provision for credit losses of $868 thousand for the second quarter of 2023. The release of provision for credit losses during the second quarter of 2024 was primarily a result of improved economic forecasts used in the quantitative portion of the model and an assessment of management’s considerations of existing economic versus historical conditions combined with the continued strong credit performance of our loan portfolio segments.

Non-interest income decreased $130 thousand during the second quarter of 2024 compared to the second quarter of 2023. A portion of this decrease was due to a decrease in bank owned life insurance (“BOLI”) income of $101 thousand due to the surrender of all BOLI policies in July 2023 and a decrease of $48 thousand due to unfavorable mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan (“NQDC”) when compared to the second quarter of 2023. Excluding the effects from the Company’s BOLI policy surrender and mark-to-market adjustments on the Company’s NQDC, core non-interest income (Non-GAAP) was $520 thousand for the second quarter of 2024 compared to $501 thousand for the second quarter of 2023. The increase in core non-interest income (Non-GAAP) was primarily due to a $193 thousand increase in gains recorded on the sale of the guaranteed portion of SBA 7(a) loans due to increased sale activity, partially offset by lower service charges and fees of $149 thousand due to lower penalty fee income recognized on the early withdrawal of certificates of deposit.

Non-interest expense increased $78 thousand or 1.0% during the second quarter of 2024 compared to the second quarter of 2023 primarily due to increases in data processing expense and professional fees, partially offset by lower FDIC insurance expense and lower salaries and employee benefit expense. The increase in data processing fees was primarily due to contractual increases and volume based activity. The increase in professional fees was due to increased contract costs. The decrease in salaries and employee benefits was due to lower deferred compensation expense, lower incentive accruals, and higher direct loan origination costs when compared to the same period of the prior year. Salaries and employee benefit expense is reduced to account for the portion of salary costs incurred to originate a loan and are subsequently amortized into income to match the costs incurred with the economic benefit derived from originating a loan. The decrease in FDIC insurance expense was the result of a lower assessment base. The Company continues to analyze cost savings opportunities on existing leases and material contracts.

For the three months ended June 30, 2024, annualized non-interest expense to average assets was 1.42% compared to 1.34% for the three months ended June 30, 2023. The increase was primarily due to lower average assets when comparing the two periods.

For the three months ended June 30, 2024, the annualized efficiency ratio was 62.6% compared to 61.7% for the three months ended June 30, 2023. The increase was primarily due to a decrease in non-interest income and increase in non-interest expense.

Year-to-Date Results

The Company reported net income of $8.1 million for the six months ended June 30, 2024, a decrease of $2.7 million when compared to the same period in 2023.

Net interest income for the six months ended June 30, 2024 decreased $2.7 million or 10.0% compared to the same period of 2023, driven primarily by the increase in costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.84% for the six months ended June 30, 2024 compared to 4.21% for the same period in 2023. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and deposits in banks as a result of increases in interest rates and repricing of assets subsequent to the second quarter of 2023. The cost of interest-bearing liabilities was 3.81% for the six months ended June 30, 2024 compared to 2.63% for the six months ended June 30, 2023. The increase in the cost of interest-bearing liabilities was primarily due to a 117 basis points increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the second quarter of 2023. The annualized net interest margin and tax-equivalent net interest margin for the six months ended June 30, 2024 was 2.14% and 2.15%, respectively, as compared to 2.32% and 2.33%, respectively, for the same period in the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company’s interest-earning assets.

The Company recorded a $1.1 million release of provision for credit losses for the six months ended June 30, 2024 compared to $1.6 million release of provision for credit losses for the six months ended June 30, 2023. The release of provision for credit losses during the six months ended June 30, 2024 was primarily a result of changes in the composition and volume of the loan portfolio, improved economic forecasts used in the quantitative portion of the model and an assessment of management’s considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.

Non-interest income increased $122 thousand during the six months ended June 30, 2024 compared to the same period of 2023. Excluding the effects from decreased BOLI income of $201 thousand, unfavorable mark-to-market adjustments on the Company’s NQDC totaling $13 thousand, and non-recurring losses of $202 thousand recognized on the sale of certain investment securities during the first quarter of 2023, core non-interest income (Non-GAAP) was $1.2 million for the six months ended June 30, 2024 compared to $1.1 million for the same period in 2023. The increase in core non-interest income (Non-GAAP) was primarily due to increases of $326 thousand in gains recorded on the sale of the guaranteed portion of SBA 7(a) loans, partially offset by decreases of $203 thousand in other service charges and fees due to lower penalty fee income recognized on the early withdrawal of certificates of deposit.

Non-interest expense increased $232 thousand or 1.5% during the six months ended June 30, 2024 compared to the same period in 2023 primarily due to previously disclosed non-recurring expenses totaling $138 thousand incurred during the first quarter of 2024 in connection with a strategic opportunity that was explored and ultimately did not materialize. The remaining $93 thousand increase was due to increases in data processing expense and professional fees, partially offset by lower salaries and employee benefit expense as discussed in the quarterly results.

For the six months ended June 30, 2024, annualized non-interest expense to average assets was 1.41% compared to 1.34% for the six months ended June 30, 2023. The increase was primarily due to lower average assets when comparing the two periods.

For the six months ended June 30, 2024, the annualized efficiency ratio was 62.8% compared to 56.3% for the six months ended June 30, 2023. The increase was primarily due to a decrease in net interest income.

Explanation of Non-GAAP Financial Measures

This release contains financial information determined by methods other than in accordance with GAAP. Management believes that the supplemental non-GAAP information provides a better comparison of period-to-period operating performance and the impact of unrealized losses in the Company’s bond portfolio on the Bank’s regulatory capital ratios. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:

  • Tax-equivalent net interest margin reflects adjustments for differences in tax treatment of interest income sources;
  • The Adjusted Bank regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized;
  • Pre-tax, pre-provision earnings excludes income tax expense and the provision for (recovery of) credit losses; and
  • Core non-interest income reflect non-interest income exclusive of BOLI income, mark-to-market adjustments on the Company’s NQDC and losses recognized on the sale of certain investment securities during the respective periods.

These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to the Reconciliation of Certain Non-GAAP Financial Measures table and Average Balance Sheets, Interest and Rates tables for the respective periods for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

About John Marshall Bancorp, Inc.

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington D.C. Metro area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated Relationship Managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including Charter and Private Schools, Government Contractors, Health Services, Nonprofits and Associations, Professional Services, Property Management Companies and Title Companies. Learn more at www.johnmarshallbank.com.

Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and the Bank include, but are not limited to, the following: the concentration of our business in the Washington, D.C. metropolitan area and the effect of changes in the economic, political and environmental conditions on this market; adequacy of our allowance for loan credit losses; allowance for unfunded commitments credit losses, and allowance for credit losses associated with our held-to-maturity and available-for-sale securities portfolios; deterioration of our asset quality; future performance of our loan portfolio with respect to recently originated loans; the level of prepayments on loans and mortgage-backed securities; liquidity, interest rate and operational risks associated with our business; changes in our financial condition or results of operations that reduce capital; our ability to maintain existing deposit relationships or attract new deposit relationships; changes in consumer spending, borrowing and savings habits; inflation and changes in interest rates that may reduce our margins or reduce the fair value of financial instruments; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; additional risks related to new lines of business, products, product enhancements or services; increased competition with other financial institutions and fintech companies; adverse changes in the securities markets; changes in the financial condition or future prospects of issuers of securities that we own; our ability to maintain an effective risk management framework; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; compliance with legislative or regulatory requirements; results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take similar actions; potential claims, damages, and fines related to litigation or government actions; the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic), and of governmental and societal responses thereto; technological risks and developments, and cyber threats, attacks, or events; the additional requirements of being a public company; changes in accounting policies and practices; our ability to successfully capitalize on growth opportunities; our ability to retain key employees; deteriorating economic conditions, either nationally or in our market area, including higher unemployment and lower real estate values; implications of our status as a smaller reporting company and as an emerging growth company; and other factors discussed in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Highlights (Unaudited)

(Dollar amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or For the Three Months Ended

 

At or For the Six Months Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

2023

 

2024

 

2023

 

Selected Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

182,605

 

$

129,551

 

$

182,605

 

$

129,551

 

Total investment securities

 

 

249,582

 

 

429,954

 

 

249,582

 

 

429,954

 

Loans, net of unearned income

 

 

1,827,187

 

 

1,769,801

 

 

1,827,187

 

 

1,769,801

 

Allowance for loan credit losses

 

 

18,433

 

 

20,629

 

 

18,433

 

 

20,629

 

Total assets

 

 

2,269,757

 

 

2,364,250

 

 

2,269,757

 

 

2,364,250

 

Non-interest bearing demand deposits

 

 

437,169

 

 

433,931

 

 

437,169

 

 

433,931

 

Interest bearing deposits

 

 

1,475,671

 

 

1,612,378

 

 

1,475,671

 

 

1,612,378

 

Total deposits

 

 

1,912,840

 

 

2,046,309

 

 

1,912,840

 

 

2,046,309

 

Federal Reserve Bank borrowings

 

 

77,000

 

 

54,000

 

 

77,000

 

 

54,000

 

Shareholders' equity

 

 

235,346

 

 

218,970

 

 

235,346

 

 

218,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Results of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

26,791

 

$

24,455

 

$

53,710

 

$

47,908

 

Interest expense

 

 

14,710

 

 

12,446

 

 

29,885

 

 

21,430

 

Net interest income

 

 

12,081

 

 

12,009

 

 

23,825

 

 

26,478

 

Provision for (recovery of) credit losses

 

 

(292)

 

 

(868)

 

 

(1,068)

 

 

(1,642)

 

Net interest income after provision for (recovery of) credit losses

 

 

12,373

 

 

12,877

 

 

24,893

 

 

28,120

 

Non-interest income

 

 

555

 

 

685

 

 

1,373

 

 

1,251

 

Non-interest expense

 

 

7,909

 

 

7,831

 

 

15,833

 

 

15,601

 

Income before income taxes

 

 

5,019

 

 

5,731

 

 

10,433

 

 

13,770

 

Net income

 

 

3,905

 

 

4,490

 

 

8,109

 

 

10,794

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data and Shares Outstanding

 

 

 

 

Earnings per share - basic

 

$

0.27

 

$

0.32

 

$

0.57

 

$

0.76

 

Earnings per share - diluted

 

$

0.27

 

$

0.32

 

$

0.57

 

$

0.76

 

Book value per share

 

$

16.54

 

$

15.50

 

$

16.54

 

$

15.50

 

Weighted average common shares (basic)

 

 

14,173,245

 

 

14,077,658

 

 

14,152,115

 

 

14,150,155

 

Weighted average common shares (diluted)

 

 

14,200,171

 

 

14,143,253

 

 

14,189,517

 

 

14,228,155

 

Common shares outstanding at end of period

 

 

14,229,853

 

 

14,126,138

 

 

14,229,853

 

 

14,126,138

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

0.70

%

 

0.77

%

 

0.72

%

 

0.93

%

Return on average equity (annualized)

 

 

6.68

%

 

8.13

%

 

6.95

%

 

9.85

%

Net interest margin

 

 

2.19

%

 

2.10

%

 

2.15

%

 

2.33

%

Tax-equivalent net interest margin (Non-GAAP)

 

 

2.19

%

 

2.09

%

 

2.14

%

 

2.32

%

Non-interest income as a percentage of average assets (annualized)

 

 

0.10

%

 

0.12

%

 

0.12

%

 

0.11

%

Non-interest expense to average assets (annualized)

 

 

1.42

%

 

1.34

%

 

1.41

%

 

1.34

%

Efficiency ratio

 

 

62.6

%

 

61.7

%

 

62.8

%

 

56.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets to total assets

 

 

- -

%

 

- -

%

 

- -

%

 

- -

%

Non-performing loans to total loans

 

 

- -

%

 

- -

%

 

- -

%

 

- -

%

Allowance for loan credit losses to non-performing loans

 

 

N/M

 

 

N/M

 

 

N/M

 

 

N/M

 

Allowance for loan credit losses to total loans

 

 

1.01

%

 

1.17

%

 

1.01

%

 

1.17

%

Net charge-offs (recoveries) to average loans (annualized)

 

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due and accruing interest

 

$

- -

 

$

- -

 

$

- -

 

$

- -

 

Non-accrual loans

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Other real estate owned

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Non-performing assets (1)

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Level)

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity / assets

 

 

11.4

%

 

10.2

%

 

11.4

%

 

10.2

%

Total risk-based capital ratio

 

 

16.4

%

 

16.1

%

 

16.4

%

 

16.1

%

Tier 1 risk-based capital ratio

 

 

15.4

%

 

15.0

%

 

15.4

%

 

15.0

%

Common equity tier 1 ratio

 

 

15.4

%

 

15.0

%

 

15.4

%

 

15.0

%

Leverage ratio

 

 

12.2

%

 

11.6

%

 

12.2

%

 

11.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of full time equivalent employees

 

 

140

 

 

144

 

 

140

 

 

144

 

# Full service branch offices

 

 

8

 

 

8

 

 

8

 

 

8

 

__________________________

(1)

Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest and other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

(Dollar amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

June 30,

 

December 31,

 

June 30,

 

Last Six

 

Year Over

 

 

2024

 

 

2023

 

2023

 

 

Months

 

Year

Assets

 

(Unaudited)

 

*

 

(Unaudited)

 

 

 

 

Cash and due from banks

 

$

10,024

 

 

$

7,424

 

 

$

13,938

 

 

35.0

%

 

(28.1

)%

Interest-bearing deposits in banks

 

 

172,581

 

 

 

91,581

 

 

 

115,613

 

 

88.4

%

 

49.3

%

Securities available-for-sale, at fair value

 

 

147,753

 

 

 

169,993

 

 

 

325,271

 

 

(13.1

)%

 

(54.6

)%

Securities held-to-maturity at amortized cost, fair value of $77,268, $79,532, and $79,634 at 6/30/2024, 12/31/2023, and 6/30/2023, respectively.

 

 

93,830

 

 

 

95,505

 

 

 

97,453

 

 

(1.8

)%

 

(3.7

)%

Restricted securities, at cost

 

 

4,966

 

 

 

5,012

 

 

 

4,535

 

 

(0.9

)%

 

9.5

%

Equity securities, at fair value

 

 

3,033

 

 

 

2,792

 

 

 

2,695

 

 

8.6

%

 

12.5

%

Loans, net of unearned income

 

 

1,827,187

 

 

 

1,859,967

 

 

 

1,769,801

 

 

(1.8

)%

 

3.2

%

Allowance for credit losses

 

 

(18,433

)

 

 

(19,543

)

 

 

(20,629

)

 

(5.7

)%

 

(10.6

)%

Net loans

 

 

1,808,754

 

 

 

1,840,424

 

 

 

1,749,172

 

 

(1.7

)%

 

3.4

%

Bank premises and equipment, net

 

 

1,184

 

 

 

1,281

 

 

 

1,370

 

 

(7.6

)%

 

(13.6

)%

Accrued interest receivable

 

 

6,196

 

 

 

6,110

 

 

 

5,178

 

 

1.4

%

 

19.7

%

Bank owned life insurance

 

 

- -

 

 

 

- -

 

 

 

21,371

 

 

N/M

 

 

N/M

 

Right of use assets

 

 

4,105

 

 

 

4,176

 

 

 

4,443

 

 

(1.7

)%

 

(7.6

)%

Other assets

 

 

17,331

 

 

 

18,251

 

 

 

23,211

 

 

(5.0

)%

 

(25.3

)%

Total assets

 

$

2,269,757

 

 

$

2,242,549

 

 

$

2,364,250

 

 

1.2

%

 

(4.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing demand deposits

 

$

437,169

 

 

$

411,374

 

 

$

433,931

 

 

6.3

%

 

0.7

%

Interest-bearing demand deposits

 

 

667,951

 

 

 

607,971

 

 

 

652,638

 

 

9.9

%

 

2.3

%

Savings deposits

 

 

45,884

 

 

 

52,061

 

 

 

68,013

 

 

(11.9

)%

 

(32.5

)%

Time deposits

 

 

761,836

 

 

 

835,194

 

 

 

891,727

 

 

(8.8

)%

 

(14.6

)%

Total deposits

 

 

1,912,840

 

 

 

1,906,600

 

 

 

2,046,309

 

 

0.3

%

 

(6.5

)%

Federal funds purchased

 

 

- -

 

 

 

10,000

 

 

 

- -

 

 

N/M

 

 

N/M

 

Federal Reserve Bank borrowings

 

 

77,000

 

 

 

54,000

 

 

 

54,000

 

 

42.6

%

 

42.6

%

Subordinated debt, net

 

 

24,749

 

 

 

24,708

 

 

 

24,666

 

 

0.2

%

 

0.3

%

Accrued interest payable

 

 

4,029

 

 

 

4,559

 

 

 

2,336

 

 

(11.6

)%

 

72.5

%

Lease liabilities

 

 

4,366

 

 

 

4,446

 

 

 

4,733

 

 

(1.8

)%

 

(7.8

)%

Other liabilities

 

 

11,427

 

 

 

8,322

 

 

 

13,236

 

 

37.3

%

 

(13.7

)%

Total liabilities

 

 

2,034,411

 

 

 

2,012,635

 

 

 

2,145,280

 

 

1.1

%

 

(5.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued

 

 

- -

 

 

 

- -

 

 

 

- -

 

 

N/M

 

 

N/M

 

Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued

 

 

- -

 

 

 

- -

 

 

 

- -

 

 

N/M

 

 

N/M

 

Common stock, voting, par value $0.01 per share; authorized 30,000,000 shares; issued and outstanding, 14,229,853 at 6/30/24 including 46,253 unvested shares, issued and outstanding, 14,148,533 at 12/31/2023 including 47,318 unvested shares, and 14,126,138 at 6/30/2023 including 46,291 unvested shares

 

 

142

 

 

 

141

 

 

 

141

 

 

0.7

%

 

0.7

%

Additional paid-in capital

 

 

96,817

 

 

 

95,636

 

 

 

95,380

 

 

1.2

%

 

1.5

%

Retained earnings

 

 

150,942

 

 

 

146,388

 

 

 

152,024

 

 

3.1

%

 

(0.7

)%

Accumulated other comprehensive loss

 

 

(12,555

)

 

 

(12,251

)

 

 

(28,575

)

 

2.5

%

 

(56.1

)%

Total shareholders' equity

 

 

235,346

 

 

 

229,914

 

 

 

218,970

 

 

2.4

%

 

7.5

%

Total liabilities and shareholders' equity

 

$

2,269,757

 

 

$

2,242,549

 

 

$

2,364,250

 

 

1.2

%

 

(4.0

)%

* Derived from audited consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

(Dollar amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

 

June 30

 

 

 

June 30

 

 

 

 

2024

 

 

2023

 

 

% Change

 

2024

 

 

2023

 

 

% Change

 

 

(Unaudited)

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

 

 

Interest and Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

23,360

 

 

$

21,005

 

 

11.2

%

 

$

46,983

 

 

$

41,430

 

 

13.4

%

Interest on investment securities, taxable

 

 

1,194

 

 

 

2,140

 

 

(44.2

)%

 

 

2,463

 

 

 

4,391

 

 

(43.9

)%

Interest on investment securities, tax-exempt

 

 

9

 

 

 

15

 

 

(40.0

)%

 

 

18

 

 

 

34

 

 

(47.1

)%

Dividends

 

 

84

 

 

 

70

 

 

20.0

%

 

 

166

 

 

 

145

 

 

14.5

%

Interest on deposits in other banks

 

 

2,144

 

 

 

1,225

 

 

75.0

%

 

 

4,080

 

 

 

1,908

 

 

N/M

 

Total interest and dividend income

 

 

26,791

 

 

 

24,455

 

 

9.6

%

 

 

53,710

 

 

 

47,908

 

 

12.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

13,450

 

 

 

11,759

 

 

14.4

%

 

 

27,381

 

 

 

20,318

 

 

34.8

%

Federal funds purchased

 

 

- -

 

 

 

- -

 

 

N/M

 

 

 

2

 

 

 

9

 

 

N/M

 

Federal Home Loan Bank advances

 

 

- -

 

 

 

- -

 

 

N/M

 

 

 

- -

 

 

 

67

 

 

N/M

 

Federal Reserve Bank borrowings

 

 

911

 

 

 

338

 

 

N/M

 

 

 

1,804

 

 

 

338

 

 

N/M

 

Subordinated debt

 

 

349

 

 

 

349

 

 

--

%

 

 

698

 

 

 

698

 

 

--

%

Total interest expense

 

 

14,710

 

 

 

12,446

 

 

18.2

%

 

 

29,885

 

 

 

21,430

 

 

39.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

12,081

 

 

 

12,009

 

 

0.6

%

 

 

23,825

 

 

 

26,478

 

 

(10.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) Credit Losses

 

 

(292

)

 

 

(868

)

 

(66.4

)%

 

 

(1,068

)

 

 

(1,642

)

 

(35.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for (recovery of) credit losses

 

 

12,373

 

 

 

12,877

 

 

(3.9

)%

 

 

24,893

 

 

 

28,120

 

 

(11.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

88

 

 

 

82

 

 

7.3

%

 

 

176

 

 

 

154

 

 

14.3

%

Bank owned life insurance

 

 

- -

 

 

 

101

 

 

N/M

 

 

 

- -

 

 

 

201

 

 

N/M

 

Other service charges and fees

 

 

165

 

 

 

314

 

 

(47.5

)%

 

 

314

 

 

 

517

 

 

(39.3

)%

Losses on sale of available-for-sale securities

 

 

- -

 

 

 

- -

 

 

N/M

 

 

 

- -

 

 

 

(202

)

 

N/M

 

Insurance commissions

 

 

40

 

 

 

50

 

 

(20.0

)%

 

 

292

 

 

 

256

 

 

14.1

%

Gain on sale of government guaranteed loans

 

 

216

 

 

 

23

 

 

N/M

 

 

 

349

 

 

 

23

 

 

N/M

 

Non-qualified deferred compensation plan asset gains, net

 

 

35

 

 

 

83

 

 

(57.8

)%

 

 

159

 

 

 

172

 

 

(7.6

)%

Other income

 

 

11

 

 

 

32

 

 

(65.6

)%

 

 

83

 

 

 

130

 

 

(36.2

)%

Total non-interest income

 

 

555

 

 

 

685

 

 

(19.0

)%

 

 

1,373

 

 

 

1,251

 

 

9.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

4,875

 

 

 

4,965

 

 

(1.8

)%

 

 

9,685

 

 

 

9,877

 

 

(1.9

)%

Occupancy expense of premises

 

 

448

 

 

 

448

 

 

--

%

 

 

899

 

 

 

918

 

 

(2.1

)%

Furniture and equipment expenses

 

 

301

 

 

 

304

 

 

(1.0

)%

 

 

598

 

 

 

600

 

 

(0.3

)%

Other expenses

 

 

2,285

 

 

 

2,114

 

 

8.1

%

 

 

4,651

 

 

 

4,206

 

 

10.6

%

Total non-interest expenses

 

 

7,909

 

 

 

7,831

 

 

1.0

%

 

 

15,833

 

 

 

15,601

 

 

1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

5,019

 

 

 

5,731

 

 

(12.4

)%

 

 

10,433

 

 

 

13,770

 

 

(24.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

 

1,114

 

 

 

1,241

 

 

(10.2

)%

 

 

2,324

 

 

 

2,976

 

 

(21.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,905

 

 

$

4,490

 

 

(13.0

)%

 

$

8,109

 

 

$

10,794

 

 

(24.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.27

 

 

$

0.32

 

 

(15.6

)%

 

$

0.57

 

 

$

0.76

 

 

(25.0

)%

Diluted

 

$

0.27

 

 

$

0.32

 

 

(15.6

)%

 

$

0.57

 

 

$

0.76

 

 

(25.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical Trends - Quarterly Financial Data (Unaudited)

(Dollar amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

2023

 

 

June 30

 

March 31

December 31

September 30

June 30

March 31

Profitability for the Quarter:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

26,791

 

$

26,919

 

$

26,598

 

$

26,263

 

$

24,455

 

$

23,453

 

Interest expense

 

 

14,710

 

 

15,175

 

 

14,571

 

 

14,284

 

 

12,446

 

 

8,984

 

Net interest income

 

 

12,081

 

 

11,744

 

 

12,027

 

 

11,979

 

 

12,009

 

 

14,469

 

Provision for (recovery of) credit losses

 

 

(292

)

 

(776

)

 

(781

)

 

(829

)

 

(868

)

 

(774

)

Non-interest income (loss)

 

 

555

 

 

818

 

 

624

 

 

(16,815

)

 

685

 

 

566

 

Non-interest expenses

 

 

7,909

 

 

7,924

 

 

7,554

 

 

7,660

 

 

7,831

 

 

7,770

 

Income (loss) before income taxes

 

 

5,019

 

 

5,414

 

 

5,878

 

 

(11,667

)

 

5,731

 

 

8,039

 

Income tax expense (benefit)

 

 

1,114

 

 

1,210

 

 

1,376

 

 

(1,530

)

 

1,241

 

 

1,735

 

Net income (loss)

 

$

3,905

 

$

4,204

 

$

4,502

 

$

(10,137

)

$

4,490

 

$

6,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Performance:

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

0.70

%

 

0.75

%

 

0.78

%

 

(1.73

)%

 

0.77

%

 

1.10

%

Return on average equity (annualized)

 

 

6.68

%

 

7.23

%

 

7.91

%

 

(18.24

)%

 

8.13

%

 

11.83

%

Net interest margin

 

 

2.19

%

 

2.10

%

 

2.11

%

 

2.07

%

 

2.09

%

 

2.56

%

Tax-equivalent net interest margin (Non-GAAP)

 

 

2.19

%

 

2.11

%

 

2.12

%

 

2.08

%

 

2.10

%

 

2.57

%

Non-interest income (loss) as a percentage of average assets (annualized)

 

 

0.10

%

 

0.15

%

 

0.11

%

 

(2.86

)%

 

0.12

%

 

0.10

%

Non-interest expense to average assets (annualized)

 

 

1.42

%

 

1.41

%

 

1.31

%

 

1.30

%

 

1.34

%

 

1.35

%

Efficiency ratio

 

 

62.6

%

 

63.1

%

 

59.7

%

 

(158.4

)%

 

61.7

%

 

51.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic

 

$

0.27

 

$

0.30

 

$

0.32

 

$

(0.72

)

$

0.32

 

$

0.45

 

Earnings (loss) per share - diluted

 

$

0.27

 

$

0.30

 

$

0.32

 

$

(0.72

)

$

0.32

 

$

0.44

 

Book value per share

 

$

16.54

 

$

16.51

 

$

16.25

 

$

15.61

 

$

15.50

 

$

15.63

 

Dividends declared per share

 

$

0.25

 

$

- -

 

$

- -

 

$

- -

 

$

0.22

 

$

- -

 

Weighted average common shares (basic)

 

 

14,173,245

 

 

14,130,986

 

 

14,082,762

 

 

14,080,026

 

 

14,077,658

 

 

14,067,047

 

Weighted average common shares (diluted)

 

 

14,200,171

 

 

14,181,254

 

 

14,145,607

 

 

14,080,026

 

 

14,143,253

 

 

14,156,724

 

Common shares outstanding at end of period

 

 

14,229,853

 

 

14,209,606

 

 

14,148,533

 

 

14,126,084

 

 

14,126,138

 

 

14,125,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

88

 

$

88

 

$

91

 

$

85

 

$

82

 

$

72

 

Bank owned life insurance

 

 

- -

 

 

- -

 

 

- -

 

 

23

 

 

101

 

 

100

 

Other service charges and fees

 

 

165

 

 

149

 

 

161

 

 

160

 

 

314

 

 

203

 

Losses on sale of available-for-sale securities

 

 

- -

 

 

- -

 

 

- -

 

 

(17,114

)

 

- -

 

 

(202

)

Insurance commissions

 

 

40

 

 

252

 

 

76

 

 

54

 

 

50

 

 

206

 

Gain on sale of government guaranteed loans

 

 

216

 

 

133

 

 

81

 

 

27

 

 

23

 

 

- -

 

Non-qualified deferred compensation plan asset gains (losses), net

 

 

35

 

 

124

 

 

205

 

 

(60

)

 

83

 

 

89

 

Other income

 

 

11

 

 

72

 

 

10

 

 

10

 

 

32

 

 

98

 

Total non-interest income (loss)

 

$

555

 

$

818

 

$

624

 

$

(16,815

)

$

685

 

$

566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

4,875

 

$

4,810

 

$

4,507

 

$

5,052

 

$

4,965

 

$

4,912

 

Occupancy expense of premises

 

 

448

 

 

451

 

 

448

 

 

445

 

 

448

 

 

470

 

Furniture and equipment expenses

 

 

301

 

 

297

 

 

296

 

 

282

 

 

304

 

 

296

 

Other expenses

 

 

2,285

 

 

2,366

 

 

2,303

 

 

1,881

 

 

2,114

 

 

2,092

 

Total non-interest expenses

 

$

7,909

 

$

7,924

 

$

7,554

 

$

7,660

 

$

7,831

 

$

7,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheets at Quarter End:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, net of unearned income

 

$

1,827,187

 

$

1,825,931

 

$

1,859,967

 

$

1,820,132

 

$

1,769,801

 

$

1,771,272

 

Allowance for loan credit losses

 

 

(18,433

)

 

(18,671

)

 

(19,543

)

 

(20,036

)

 

(20,629

)

 

(21,619

)

Investment securities

 

 

249,582

 

 

261,341

 

 

273,302

 

 

272,881

 

 

429,954

 

 

445,785

 

Interest-earning assets

 

 

2,249,350

 

 

2,234,592

 

 

2,224,850

 

 

2,278,027

 

 

2,315,368

 

 

2,312,404

 

Total assets

 

 

2,269,757

 

 

2,251,837

 

 

2,242,549

 

 

2,298,202

 

 

2,364,250

 

 

2,351,307

 

Total deposits

 

 

1,912,840

 

 

1,900,990

 

 

1,906,600

 

 

1,981,623

 

 

2,046,309

 

 

2,088,642

 

Total interest-bearing liabilities

 

 

1,577,420

 

 

1,598,050

 

 

1,583,934

 

 

1,622,430

 

 

1,691,044

 

 

1,665,837

 

Total shareholders' equity

 

 

235,346

 

 

234,550

 

 

229,914

 

 

220,567

 

 

218,970

 

 

220,823

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Average Balance Sheets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, net of unearned income

 

$

1,810,722

 

$

1,835,966

 

$

1,837,855

 

$

1,790,720

 

$

1,767,831

 

$

1,772,922

 

Investment securities

 

 

255,940

 

 

270,760

 

 

273,264

 

 

310,407

 

 

441,778

 

 

463,254

 

Interest-earning assets

 

 

2,222,658

 

 

2,247,620

 

 

2,260,356

 

 

2,301,642

 

 

2,305,050

 

 

2,295,677

 

Total assets

 

 

2,239,261

 

 

2,264,544

 

 

2,280,060

 

 

2,331,403

 

 

2,344,712

 

 

2,334,695

 

Total deposits

 

 

1,883,010

 

 

1,914,173

 

 

1,956,039

 

 

2,012,934

 

 

2,051,702

 

 

2,066,139

 

Total interest-bearing liabilities

 

 

1,551,953

 

 

1,600,197

 

 

1,587,179

 

 

1,660,980

 

 

1,667,597

 

 

1,621,131

 

Total shareholders' equity

 

 

235,136

 

 

233,952

 

 

225,718

 

 

220,473

 

 

221,608

 

 

220,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

Average equity to average assets

 

 

10.5

%

 

10.3

%

 

9.9

%

 

9.5

%

 

9.5

%

 

9.4

%

Investment securities to earning assets

 

 

11.1

%

 

11.7

%

 

12.3

%

 

12.0

%

 

18.6

%

 

19.3

%

Loans to earning assets

 

 

81.2

%

 

81.7

%

 

83.6

%

 

79.9

%

 

76.4

%

 

76.6

%

Loans to assets

 

 

80.5

%

 

81.1

%

 

82.9

%

 

79.2

%

 

74.9

%

 

75.3

%

Loans to deposits

 

 

95.5

%

 

96.1

%

 

97.6

%

 

91.9

%

 

86.5

%

 

84.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Level):

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity / assets

 

 

11.4

%

 

11.3

%

 

11.1

%

 

10.6

%

 

10.2

%

 

10.3

%

Total risk-based capital ratio

 

 

16.4

%

 

16.1

%

 

15.7

%

 

15.7

%

 

16.1

%

 

16.1

%

Tier 1 risk-based capital ratio

 

 

15.4

%

 

15.1

%

 

14.7

%

 

14.6

%

 

15.0

%

 

14.9

%

Common equity tier 1 ratio

 

 

15.4

%

 

15.1

%

 

14.7

%

 

14.6

%

 

15.0

%

 

14.9

%

Leverage ratio

 

 

12.2

%

 

11.8

%

 

11.6

%

 

11.3

%

 

11.6

%

 

11.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan, Deposit and Borrowing Detail (Unaudited)

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

 

2023

 

 

 

 

 

June 30

 

March 31

 

December 31

 

September 30

 

June 30

 

March 31

 

Loans

 

$ Amount

% of Total

 

 

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

Commercial business loans

$

41,806

 

2.3

%

$

42,779

 

2.3

%

$

45,073

 

2.4

%

$

37,793

 

2.1

%

$

40,156

 

2.3

%

$

41,204

 

2.3

%

Commercial PPP loans

 

127

 

0.0

%

 

129

 

0.0

%

 

131

 

0.0

%

 

132

 

0.0

%

 

133

 

0.0

%

 

135

 

0.0

%

Commercial owner-occupied real estate loans

 

349,644

 

19.2

%

 

356,335

 

19.6

%

 

360,102

 

19.4

%

 

363,017

 

20.0

%

 

360,859

 

20.4

%

 

363,495

 

20.6

%

Total business loans

 

391,577

 

21.5

%

 

399,243

 

21.9

%

 

405,306

 

21.8

%

 

400,942

 

22.1

%

 

401,148

 

22.7

%

 

404,834

 

22.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor real estate loans

 

722,419

 

39.6

%

 

692,418

 

38.0

%

 

689,556

 

37.1

%

 

683,686

 

37.6

%

 

654,623

 

37.0

%

 

660,740

 

37.4

%

Construction & development loans

 

138,744

 

7.6

%

 

151,476

 

8.3

%

 

180,922

 

9.8

%

 

179,570

 

9.9

%

 

179,656

 

10.2

%

 

179,606

 

10.2

%

Multi-family loans

 

91,925

 

5.1

%

 

94,719

 

5.2

%

 

96,458

 

5.2

%

 

86,366

 

4.8

%

 

86,061

 

4.9

%

 

88,670

 

5.0

%

Total commercial real estate loans

 

953,088

 

52.3

%

 

938,613

 

51.5

%

 

966,936

 

52.1

%

 

949,622

 

52.3

%

 

920,340

 

52.1

%

 

929,016

 

52.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage loans

 

476,764

 

26.2

%

 

482,254

 

26.5

%

 

482,182

 

26.1

%

 

464,509

 

25.7

%

 

443,305

 

25.2

%

 

433,076

 

24.5

%

Consumer loans

 

876

 

0.0

%

 

772

 

0.0

%

 

560

 

0.0

%

 

467

 

0.0

%

 

646

 

0.0

%

 

324

 

0.0

%

Total loans

$

1,822,305

 

100.0

%

$

1,820,882

 

100.0

%

$

1,854,984

 

100.0

%

$

1,815,540

 

100.0

%

$

1,765,439

 

100.0

%

$

1,767,250

 

100.0

%

Less: Allowance for loan credit losses

 

(18,433

)

 

 

 

(18,671

)

 

 

 

(19,543

)

 

 

 

(20,036

)

 

 

 

(20,629

)

 

 

 

(21,619

)

 

 

Net deferred loan costs (fees)

 

4,882

 

 

 

 

5,049

 

 

 

 

4,983

 

 

 

 

4,592

 

 

 

 

4,362

 

 

 

 

4,022

 

 

 

Net loans

$

1,808,754

 

 

 

$

1,807,260

 

 

 

$

1,840,424

 

 

 

$

1,800,096

 

 

 

$

1,749,172

 

 

 

$

1,749,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

 

2023

 

 

 

 

 

June 30

 

March 31

 

December 31

 

September 30

 

June 30

 

March 31

 

Deposits

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

$ Amount

% of Total

 

Non-interest bearing demand deposits

$

437,169

 

22.8

%

$

404,669

 

21.3

%

$

411,374

 

21.6

%

$

437,880

 

22.1

%

$

433,931

 

21.2

%

$

447,450

 

21.4

%

Interest-bearing demand deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts(1)

 

321,702

 

16.8

%

 

318,445

 

16.8

%

 

297,321

 

15.6

%

 

345,522

 

17.4

%

 

311,225

 

15.2

%

 

284,872

 

13.7

%

Money market accounts(1)

 

346,249

 

18.1

%

 

326,135

 

17.1

%

 

310,650

 

16.3

%

 

330,297

 

16.6

%

 

341,413

 

16.7

%

 

392,962

 

18.8

%

Savings accounts

 

45,884

 

2.4

%

 

50,664

 

2.7

%

 

52,061

 

2.8

%

 

57,408

 

3.0

%

 

68,013

 

3.4

%

 

81,150

 

3.9

%

Certificates of deposit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or more

 

339,908

 

17.8

%

 

355,766

 

18.7

%

 

357,768

 

18.7

%

 

364,805

 

18.4

%

 

376,899

 

18.4

%

 

338,824

 

16.2

%

Less than $250,000

 

91,258

 

4.8

%

 

99,694

 

5.2

%

 

101,567

 

5.3

%

 

103,600

 

5.2

%

 

105,956

 

5.2

%

 

94,429

 

4.5

%

QwickRate® certificates of deposit

 

4,119

 

0.2

%

 

5,117

 

0.3

%

 

9,686

 

0.5

%

 

11,526

 

0.6

%

 

12,772

 

0.6

%

 

16,952

 

0.8

%

IntraFi® certificates of deposit

 

32,922

 

1.7

%

 

34,443

 

1.8

%

 

45,748

 

2.4

%

 

41,659

 

2.1

%

 

49,729

 

2.4

%

 

53,178

 

2.5

%

Brokered deposits

 

293,629

 

15.4

%

 

306,057

 

16.1

%

 

320,425

 

16.8

%

 

288,926

 

14.6

%

 

346,371

 

16.9

%

 

378,825

 

18.2

%

Total deposits

$

1,912,840

 

100.0

%

$

1,900,990

 

100.0

%

$

1,906,600

 

100.0

%

$

1,981,623

 

100.0

%

$

2,046,309

 

100.0

%

$

2,088,642

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased

$

- -

 

0.0

%

$

- -

 

0.0

%

$

10,000

 

11.3

%

$

- -

 

0.0

%

$

- -

 

0.0

%

$

- -

 

0.0

%

Federal Reserve Bank borrowings

 

77,000

 

75.7

%

 

77,000

 

75.7

%

 

54,000

 

60.9

%

 

54,000

 

68.6

%

 

54,000

 

68.6

%

 

- -

 

0.0

%

Subordinated debt, net

 

24,749

 

24.3

%

 

24,729

 

24.3

%

 

24,708

 

27.8

%

 

24,687

 

31.4

%

 

24,666

 

31.4

%

 

24,645

 

100.0

%

Total borrowings

$

101,749

 

100.0

%

$

101,729

 

100.0

%

$

88,708

 

100.0

%

$

78,687

 

100.0

%

$

78,666

 

100.0

%

$

24,645

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits and borrowings

$

2,014,589

 

 

 

$

2,002,719

 

 

 

$

1,995,308

 

 

 

$

2,060,310

 

 

 

$

2,124,975

 

 

 

$

2,113,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core customer funding sources (2)

$

1,615,092

 

81.2

%

$

1,589,816

 

80.4

%

$

1,576,489

 

80.0

%

$

1,681,171

 

82.6

%

$

1,687,166

 

80.3

%

$

1,692,865

 

81.1

%

Wholesale funding sources (3)

 

374,748

 

18.8

%

 

388,174

 

19.6

%

 

394,111

 

20.0

%

 

354,452

 

17.4

%

 

413,143

 

19.7

%

 

395,777

 

18.9

%

Total funding sources

$

1,989,840

 

100.0

%

$

1,977,990

 

100.0

%

$

1,970,600

 

100.0

%

$

2,035,623

 

100.0

%

$

2,100,309

 

100.0

%

$

2,088,642

 

100.0

%

_______________________

(1)

Includes IntraFi® accounts.

(2)

Includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits, which are maintained by customers.

(3)

Consists of QwickRate® certificates of deposit, brokered deposits, federal funds purchased, Federal Home Loan Bank advances and Federal Reserve Bank borrowings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balance Sheets, Interest and Rates (unaudited)

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2024

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

Interest Income /

 

Average

 

 

 

 

Interest Income /

 

Average

 

 

 

Average Balance

 

Expense

 

Rate

 

Average Balance

 

Expense

 

Rate

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$

261,970

 

$

2,629

 

2.02

%

$

449,272

 

$

4,536

 

2.04

%

Tax-exempt(1)

 

 

1,380

 

 

22

 

3.21

%

 

3,184

 

 

43

 

2.72

%

Total securities

 

$

263,350

 

$

2,651

 

2.02

%

$

452,456

 

$

4,579

 

2.04

%

Loans, net of unearned income(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,803,507

 

 

46,684

 

5.21

%

 

1,741,915

 

 

40,969

 

4.74

%

Tax-exempt(1)

 

 

19,837

 

 

378

 

3.83

%

 

28,447

 

 

584

 

4.14

%

Total loans, net of unearned income

 

$

1,823,344

 

$

47,062

 

5.19

%

$

1,770,362

 

$

41,553

 

4.73

%

Interest-bearing deposits in other banks

 

$

148,445

 

$

4,080

 

5.53

%

$

77,571

 

$

1,908

 

4.96

%

Total interest-earning assets

 

$

2,235,139

 

$

53,793

 

4.84

%

$

2,300,389

 

$

48,040

 

4.21

%

Total non-interest earning assets

 

 

16,726

 

 

 

 

 

 

 

39,342

 

 

 

 

 

 

Total assets

 

$

2,251,865

 

 

 

 

 

 

$

2,339,731

 

 

 

 

 

 

Liabilities & Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

$

308,612

 

$

4,211

 

2.74

%

$

272,872

 

$

2,245

 

1.66

%

Money market accounts

 

 

323,287

 

 

5,122

 

3.19

%

 

390,511

 

 

4,951

 

2.56

%

Savings accounts

 

 

52,122

 

 

361

 

1.39

%

 

81,025

 

 

475

 

1.18

%

Time deposits

 

 

791,157

 

 

17,687

 

4.50

%

 

858,027

 

 

12,647

 

2.97

%

Total interest-bearing deposits

 

$

1,475,178

 

$

27,381

 

3.73

%

$

1,602,435

 

$

20,318

 

2.56

%

Federal funds purchased

 

 

55

 

 

2

 

7.31

%

 

392

 

 

9

 

4.63

%

Subordinated debt, net

 

 

24,726

 

 

698

 

5.68

%

 

24,643

 

 

698

 

5.71

%

Federal Reserve Bank borrowings

 

 

76,116

 

 

1,804

 

4.77

%

 

14,022

 

 

338

 

4.86

%

Other borrowed funds

 

 

 

 

 

N/M

%

 

3,001

 

 

67

 

4.50

%

Total interest-bearing liabilities

 

$

1,576,075

 

$

29,885

 

3.81

%

$

1,644,493

 

$

21,430

 

2.63

%

Demand deposits

 

 

423,414

 

 

 

 

 

 

 

456,445

 

 

 

 

 

 

Other liabilities

 

 

17,832

 

 

 

 

 

 

 

17,845

 

 

 

 

 

 

Total liabilities

 

$

2,017,321

 

 

 

 

 

 

$

2,118,783

 

 

 

 

 

 

Shareholders’ equity

 

$

234,544

 

 

 

 

 

 

$

220,948

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,251,865

 

 

 

 

 

 

$

2,339,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-equivalent net interest income and spread (Non-GAAP)(1)

 

 

 

 

$

23,908

 

1.03

%

 

 

 

$

26,610

 

1.58

%

Less: tax-equivalent adjustment

 

 

 

 

 

83

 

 

 

 

 

 

 

132

 

 

 

Net interest income and spread (GAAP)

 

 

 

 

$

23,825

 

1.02

%

 

 

 

$

26,478

 

1.57

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income/earnings assets

 

 

 

 

 

 

 

4.83

%

 

 

 

 

 

 

4.20

%

Interest expense/earning assets

 

 

 

 

 

 

 

2.69

%

 

 

 

 

 

 

1.88

%

Net interest margin

 

 

 

 

 

 

 

2.14

%

 

 

 

 

 

 

2.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-equivalent interest income/earnings assets (Non-GAAP)(1)

 

 

 

 

 

 

 

4.84

%

 

 

 

 

 

 

4.21

%

Interest expense/earning assets

 

 

 

 

 

 

 

2.69

%

 

 

 

 

 

 

1.88

%

Tax-equivalent net interest margin (Non-GAAP)(3)

 

 

 

 

 

 

 

2.15

%

 

 

 

 

 

 

2.33

%

_______________________

(1)

Tax-equivalent income and related measures have been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $83 thousand and $132 thousand for the six months ended June 30, 2024 and June 30, 2023, respectively.

(2)

The Company did not have any loans on non-accrual as of June 30, 2024 and June 30, 2023.

(3)

Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balance Sheets, Interest and Rates (unaudited)

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2024

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

Interest Income /

 

Average

 

 

 

 

Interest Income /

 

Average

 

 

 

Average Balance

 

Expense

 

Rate

 

Average Balance

 

Expense

 

Rate

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$

254,561

 

$

1,278

 

2.02

%

$

438,845

 

$

2,210

 

2.02

%

Tax-exempt(1)

 

 

1,379

 

 

11

 

3.21

%

 

2,933

 

 

20

 

2.74

%

Total securities

 

$

255,940

 

$

1,289

 

2.03

%

$

441,778

 

$

2,230

 

2.02

%

Loans, net of unearned income(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,793,487

 

 

23,227

 

5.21

%

 

1,739,511

 

 

20,775

 

4.79

%

Tax-exempt(1)

 

 

17,235

 

 

169

 

3.94

%

 

28,320

 

 

292

 

4.14

%

Total loans, net of unearned income

 

$

1,810,722

 

$

23,396

 

5.20

%

$

1,767,831

 

$

21,067

 

4.78

%

Interest-bearing deposits in other banks

 

$

155,996

 

$

2,144

 

5.53

%

$

95,441

 

$

1,225

 

5.15

%

Total interest-earning assets

 

$

2,222,658

 

$

26,829

 

4.85

%

$

2,305,050

 

$

24,522

 

4.27

%

Total non-interest earning assets

 

 

16,603

 

 

 

 

 

 

 

39,662

 

 

 

 

 

 

Total assets

 

$

2,239,261

 

 

 

 

 

 

$

2,344,712

 

 

 

 

 

 

Liabilities & Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

$

303,745

 

 

2,012

 

2.66

%

$

287,094

 

$

1,483

 

2.07

%

Money market accounts

 

 

321,822

 

 

2,545

 

3.18

%

 

352,373

 

 

2,476

 

2.82

%

Savings accounts

 

 

51,179

 

 

186

 

1.46

%

 

74,483

 

 

231

 

1.24

%

Time deposits

 

 

773,470

 

 

8,707

 

4.53

%

 

901,104

 

 

7,569

 

3.37

%

Total interest-bearing deposits

 

$

1,450,216

 

$

13,450

 

3.73

%

$

1,615,054

 

$

11,759

 

2.92

%

Subordinated debt, net

 

 

24,737

 

 

349

 

5.67

%

 

24,653

 

 

349

 

5.68

%

Federal Reserve Bank borrowings

 

 

77,000

 

 

911

 

4.76

%

 

27,890

 

 

338

 

4.86

%

Total interest-bearing liabilities

 

$

1,551,953

 

$

14,710

 

3.81

%

$

1,667,597

 

$

12,446

 

2.99

%

Demand deposits

 

 

432,794

 

 

 

 

 

 

 

436,648

 

 

 

 

 

 

Other liabilities

 

 

19,378

 

 

 

 

 

 

 

18,859

 

 

 

 

 

 

Total liabilities

 

$

2,004,125

 

 

 

 

 

 

$

2,123,104

 

 

 

 

 

 

Shareholders’ equity

 

$

235,136

 

 

 

 

 

 

$

221,608

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,239,261

 

 

 

 

 

 

$

2,344,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-equivalent net interest income and spread (Non-GAAP)(1)

 

 

 

 

$

12,119

 

1.04

%

 

 

 

$

12,076

 

1.28

%

Less: tax-equivalent adjustment

 

 

 

 

 

38

 

 

 

 

 

 

 

67

 

 

 

Net interest income and spread (GAAP)

 

 

 

 

$

12,081

 

1.04

%

 

 

 

$

12,009

 

1.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income/earnings assets

 

 

 

 

 

 

 

4.85

%

 

 

 

 

 

 

4.26

%

Interest expense/earning assets

 

 

 

 

 

 

 

2.66

%

 

 

 

 

 

 

2.17

%

Net interest margin

 

 

 

 

 

 

 

2.19

%

 

 

 

 

 

 

2.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-equivalent interest income/earnings assets (Non-GAAP)(1)

 

 

 

 

 

 

 

4.85

%

 

 

 

 

 

 

4.27

%

Interest expense/earning assets

 

 

 

 

 

 

 

2.66

%

 

 

 

 

 

 

2.17

%

Tax-equivalent net interest margin (Non-GAAP)(3)

 

 

 

 

 

 

 

2.19

%

 

 

 

 

 

 

2.10

%

_______________________

(1)

Tax-equivalent income and related measures have been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $38 thousand and $67 thousand for the three months ended June 30, 2024 and June 30, 2023, respectively.

(2)

The Company did not have any loans on non-accrual as of June 30, 2024 and June 30, 2023.

(3)

Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components.

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Certain Non-GAAP Financial Measures (unaudited)

(Dollar amounts in thousands)

 

 

As of

 

 

June 30, 2024

 

December 31, 2023

 

June 30, 2023

 

Regulatory Ratios (Bank)

 

 

 

 

 

 

 

 

 

 

Total risk-based capital (GAAP)

 

$

290,228

 

$

282,082

 

$

291,262

 

Less: Unrealized losses on available-for-sale securities, net of tax benefit (1)

 

 

12,661

 

 

12,401

 

 

28,770

 

Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1)

 

 

12,978

 

 

12,469

 

 

14,077

 

Adjusted total risk-based capital, excluding unrealized losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP)

 

$

264,589

 

$

257,212

 

$

248,415

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital (GAAP)

 

$

272,276

 

$

263,637

 

$

271,209

 

Less: Unrealized losses on available-for-sale securities, net of tax benefit (1)

 

 

12,661

 

 

12,401

 

 

28,770

 

Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1)

 

 

12,978

 

 

12,469

 

 

14,077

 

Adjusted tier 1 capital, excluding unrealized losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP)

 

$

246,637

 

$

238,767

 

$

228,362

 

 

 

 

 

 

 

 

 

 

 

 

Risk weighted assets (GAAP)

 

$

1,769,472

 

$

1,794,769

 

$

1,813,541

 

Less: Risk weighted available-for-sale securities

 

 

22,343

 

 

24,184

 

 

56,621

 

Less: Risk weighted held-to-maturity securities

 

 

16,788

 

 

17,079

 

 

17,425

 

Adjusted risk weighted assets, excluding available-for-sale and held-to-maturity securities (Non-GAAP)

 

$

1,730,341

 

$

1,753,506

 

$

1,739,495

 

 

 

 

 

 

 

 

 

 

 

 

Total average assets for leverage ratio (GAAP)

 

$

2,236,987

 

$

2,274,911

 

$

2,343,457

 

Less: Unrealized losses on available-for-sale securities, net of tax benefit (1)

 

 

12,661

 

 

12,401

 

 

28,770

 

Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1)

 

 

12,978

 

 

12,469

 

 

14,077

 

Adjusted total average assets for leverage ratio, excluding available-for-sale and held-to-maturity securities (Non-GAAP)

 

$

2,211,348

 

$

2,250,041

 

$

2,300,610

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio (2)

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio (GAAP)

 

 

16.4

%

 

15.7

%

 

16.1

%

Adjusted total risk-based capital ratio (Non-GAAP) (3)

 

 

15.3

%

 

14.7

%

 

14.3

%

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital ratio (4)

 

 

 

 

 

 

 

 

 

 

Tier 1 risk-based capital ratio (GAAP)

 

 

15.4

%

 

14.7

%

 

15.0

%

Adjusted tier 1 risk-based capital ratio (Non-GAAP) (5)

 

 

14.3

%

 

13.5

%

 

13.0

%

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio (6)

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio (GAAP)

 

 

15.4

%

 

14.7

%

 

15.0

%

Adjusted common equity tier 1 ratio (Non-GAAP) (7)

 

 

14.3

%

 

13.5

%

 

13.0

%

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio (8)

 

 

 

 

 

 

 

 

 

 

Leverage ratio (GAAP)

 

 

12.2

%

 

11.6

%

 

11.6

%

Adjusted leverage ratio (Non-GAAP) (9)

 

 

11.2

%

 

10.6

%

 

9.9

%

 

 

 

 

 

 

 

 

 

 

 

_______________________

(1)

Includes tax benefit calculated using the federal statutory tax rate of 21%.

(2)

The total risk-based capital ratio is calculated by dividing total risk-based capital by risk weighted assets.

(3)

The adjusted total risk-based capital ratio is calculated by dividing adjusted total risk-based capital by adjusted risk weighted assets.

(4)

The tier 1 capital ratio is calculated by dividing tier 1 capital by risk weighted assets.

(5)

The adjusted tier 1 capital ratio is calculated by dividing adjusted tier 1 capital by adjusted risk weighted assets.

(6)

The common equity tier 1 ratio is calculated by dividing tier 1 capital by risk weighted assets.

(7)

The adjusted common equity tier 1 ratio is calculated by dividing adjusted tier 1 capital by adjusted risk weighted assets.

(8)

The leverage ratio is calculated by dividing tier 1 capital by total average assets for leverage ratio.

(9)

The adjusted leverage ratio is calculated by dividing adjusted tier 1 capital by adjusted total average assets for leverage ratio.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Certain Non-GAAP Financial Measures (unaudited)

(Dollar amounts in thousands)

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

June 30, 2024

March 31, 2024

 

 

 

 

 

 

Pre-tax, pre-provision earnings (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$

5,019

 

 

$

5,414

 

 

 

 

 

 

 

 

Adjustment: Provision for (recovery of) credit losses

 

 

(292

)

 

 

(776

)

 

 

 

 

 

 

 

Pre-tax, pre-provision earnings (Non-GAAP)(1)

 

$

4,727

 

 

$

4,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

For the Six Months Ended

 

 

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Core non-interest income (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income (GAAP)

 

$

555

 

 

$

685

 

 

$

1,373

 

$

1,251

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

BOLI income

 

 

- -

 

 

 

101

 

 

 

- -

 

 

201

 

 

Mark-to-market adjustments on NQDC plan assets

 

 

35

 

 

 

83

 

 

 

159

 

 

172

 

 

Loss recognized on sale of available-for-sale securities

 

 

- -

 

 

 

- -

 

 

 

- -

 

 

(202

)

 

Core non-interest income (Non-GAAP)(2)

 

$

520

 

 

$

501

 

 

$

1,214

 

$

1,080

 

 

_______________________

(1)

Pre-tax, pre-provision earnings is calculated by adjusting income before taxes for provision for (recovery of) credit losses.

(2)

Core non-interest income is calculated by adjusting non-interest income for BOLI income, mark-to-market adjustments on NQDC plan assets and loss recognized on the sale of available-for-sale securities.

Category: Earnings

Contacts

Christopher W. Bergstrom (703) 584-0840
Kent D. Carstater (703) 289-5922

Contacts

Christopher W. Bergstrom (703) 584-0840
Kent D. Carstater (703) 289-5922