JMSB 8-K
John Marshall Bancorp, Inc. (JMSB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
|
| |||
(State or other jurisdiction of incorporation) |
| (Commission File Number) |
| (IRS Employer Identification No.) |
(Address, including zip code, of principal executive offices)
Registrant’s telephone number, including area code: (
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class registered |
| Trading symbol(s) |
| Name of each exchange on which registered |
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On July 24, 2024, John Marshall Bancorp, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for the quarter ended June 30, 2024. A copy of the press release is included as Exhibit 99.1 to this report.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. |
| Description |
99.1 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| JOHN MARSHALL BANCORP, INC. | ||||
Date: July 24, 2024 |
|
| By: |
| /s/ Kent D. Carstater | |
|
|
| Kent D. Carstater Senior Executive Vice President, Chief Financial Officer | |||
Exhibit 99.1
For Immediate Release
July 24, 2024
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.”
1
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
2
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) | Weighted Average Loan-to-Value(1) | | Weighted Average Debt Service Coverage Ratio(2) | | Number of Total Loans | | Principal Balance(3) |
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. |
3
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.
4
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
5
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
6
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.
# # #
7
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. |
8
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.
9
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) | % |
10
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 | % |
11
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. |
12
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. |
13
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. |
14
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. |
15
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. |
16