8-K
John Marshall Bancorp, Inc. (JMSB)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 20, 2022
John Marshall Bancorp, Inc.
(Exact name of registrant as specified in its charter)
| - | ||
|---|---|---|
| Virginia | 001-41315 | 81-5424879 |
| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) |
1943 Isaac Newton Square , Suite 100
Reston , Virginia **** 20190
(Address, including zip code, of principal executive offices)
Registrant’s telephone number, including area code: ( 703 ) 584-0840
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 |
|---|---|---|
| Common Stock, par value $0.01 per share | JMSB | The Nasdaq Stock Market LLC |
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 20, 2022, John Marshall Bancorp, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for the quarter ended June 30, 2022. A copy of the press release is included as Exhibit 99.1 to this report.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
|---|
| Exhibit No. | Description | |
|---|---|---|
| 99.1 | | Press release dated July 20, 2022. |
| 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 20, 2022 | By: | /s/ Kent D. Carstater |
| Kent D. Carstater<br><br>Executive Vice President, Chief Financial Officer |
Exhibit 99.1
For Immediate Release
July 20, 2022
John Marshall Bancorp, Inc. Reports 27.3% Earnings per Share Growth
Driven by Strong Loan Growth, Expense Management and Outstanding Asset Quality
Reston, VA – John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), today reported net income of $7.9 million ($0.56 per diluted common share) for the quarter ended June 30, 2022. The current quarter’s result compares to net income of $6.1 million ($0.44 per diluted common share) for the second quarter of 2021 and net income of $7.7 million ($0.55 per diluted common share) for the first quarter of 2022.
Second Quarter Highlights
| ● | Fourteenth Consecutive Quarter of Record Earnings – The Company reported record net income of $7.9 million for the second quarter of 2022, a $1.8 million or 29.7% increase over the $6.1 million reported for the second quarter of 2021. Earnings per diluted share for the three months ended June 30, 2022 were $0.56, a 27.3% increase over the $0.44 reported for the three months ended June 30, 2021. |
|---|---|
| ● | Record Returns – Annualized Return on Average Assets (“ROAA”) was 1.41% and annualized Return on Average Equity (“ROAE”) was 15.28% for the three months ended June 30, 2022. ROAA and ROAE were 1.20% and 12.64%, respectively, for the three months ended June 30, 2021. Excluding the second quarter of 2010, when the Company realized a significant, non-recurring income tax benefit from the removal of the valuation allowance on its deferred tax assets, the ROAA and ROAE represent Company records. |
| --- | --- |
| ● | Strong Loan Growth – Excluding Paycheck Protection Program (“PPP”) loans, gross loans net of unearned income (“Core Loans”) grew $204.1 million or 13.7% from June 30, 2021 to June 30, 2022. Core loans grew $68.8 million or 17.0% annualized from March 31, 2022 to June 30, 2022, representing the 3^rd^ best quarter of core loan production in the Company’s history. |
| --- | --- |
| ● | Overhead Discipline – The Company continues to actively manage costs while investing for future growth. The efficiency ratio for the second quarter of 2022 was 44.1% compared to 53.6% for the second quarter of 2021. The ratio of annualized non-interest expense to average assets was 1.38% for the second quarter of 2022 and 1.79% for the second quarter of 2021. |
| --- | --- |
| ● | Asset Quality Remains Pristine – For the eleventh consecutive quarter, the Company had no non-performing loans, no loans 30 days or more past due, and no other real estate owned assets at June 30, 2022. The Company believes its allowance for loan losses is appropriate for the inherent risks and uncertainties associated with the portfolio. |
| --- | --- |
Chris Bergstrom, President and Chief Executive Officer, commented, “During the second quarter of 2022, the Company achieved a number of significant milestones – registering our stock with the Securities and Exchange Commission to provide shareholders with greater disclosure and transparency, listing on the Nasdaq to facilitate greater trading volume, paying a cash dividend to reward our shareholders and refinancing our subordinated debt to lower our interest expense and cost of capital. While working on these priorities, we were able to achieve our 3^rd^ best quarter of core loan growth. The PPP loan payoffs that we have not yet redeployed into loans were invested into liquid, cash flowing securities that we expect to convert into future loans and further increase our profitability. Our balance sheet remains well-capitalized with stellar asset quality, ample liquidity, and is primed for continued growth.”
1
Balance Sheet and Credit Quality
Total assets were $2.32 billion at June 30, 2022, $2.25 billion at March 31, 2022 and $2.07 billion at June 30, 2021. Asset growth from June 30, 2021 to June 30, 2022 was $250.5 million or 12.1%. During the second quarter of 2022, assets increased $66.8 million or 11.9% annualized. Asset growth was primarily comprised of loans and securities available for sale.
Total loans, net of unearned income, increased by 8.0% to $1.69 billion at June 30, 2022, compared to $1.57 billion at June 30, 2021. Excluding PPP loans, total loans, net of unearned income, at June 30, 2022 grew 13.7% to $1.69 billion as compared to $1.49 billion at June 30, 2021. The year-over-year increase in the loan portfolio is primarily attributable to growth in the investor real estate, residential mortgage, commercial owner-occupied real estate, and multi-family loan portfolios. At June 30, 2022, PPP loans, net of unearned income, totaled $216 thousand.
Total loans, net of unearned income, increased $61.4 million during the quarter ended June 30, 2022 or 15.1% annualized from $1.63 billion at March 31, 2022. Excluding PPP loans, total loans, net of unearned income, increased $68.8 million during the quarter ended June 30, 2022 or 17.0% annualized from March 31, 2022. The increase in loans was attributable to growth in the investor real estate, commercial owner-occupied, residential mortgage, and multi-family loan portfolios.
The Company’s portfolio of investments in fixed income securities was $467.4 million at June 30, 2022, $402.3 million at March 31, 2022, and $299.5 million at June 30, 2021. The increase in the fixed income securities portfolio was primarily driven by redeployment of PPP loan payoffs and deposit growth. All but $15.2 million of the fixed income portfolio is backed by the explicit or implicit guarantees of the United States Government or one of its agencies.
Total deposits were $2.04 billion at June 30, 2022, $1.98 billion at March 31, 2022 and $1.82 billion at June 30, 2021. Deposit growth was 12.6% during the past twelve months, as saving deposits grew 41.9%, interest-bearing demand deposits grew 25.6%, and non-interest bearing deposits grew 7.0%. Deposit growth was 8.6% during the past six months as interest-bearing demand deposits grew 16.5% and savings deposits grew 10.8%.
Total borrowings, defined as Federal Home Loan Bank (“FHLB”) advances and subordinated debt, increased by 15.7% or $6.8 million to $49.6 million at June 30, 2022 compared to $42.8 million at March 31, 2022. The increase was primarily due to the Company’s June 2022 issuance of a 5.25% fixed-to-floating rate subordinated note (“2022 note”) due in 2032 in the principal amount of $25.0 million. On July 15, 2022, the Company used the proceeds from the issuance to redeem the 5.75% fixed-to-floating rate subordinated notes (“2017 notes”) due 2027. The increase in total borrowings was partially offset by an $18.0 million decrease in FHLB advances due to the call of the Company’s outstanding FHLB advances during the three months ended June 30, 2022.
Shareholders’ equity was $207.5 million at June 30, 2022, an increase of $12.3 million or 6.3% from June 30, 2021. This increase year-over-year was due to net income of $29.9 million and the exercise of stock options totaling $3.5 million, partially offset by reductions in accumulated other comprehensive income of $18.3 million and dividends paid of $2.8 million. Book value per share was $14.80 as of June 30, 2022 compared to $14.32 as of June 30, 2021. The change in book value per share year-over-year was due to earnings, partially offset by increases in unrealized losses on our available-for-sale investment portfolio as a result of rising interest rates, shareholder option exercises, restricted share award issuances, and dividends paid. The Bank’s capital ratios remain well above regulatory thresholds for well-capitalized banks. As of June 30, 2022, the Bank’s total risk-based capital ratio was 15.1%, compared to 15.0% at June 30, 2021.
2
The Company recorded no net charge-offs for the second quarter of 2022, as compared to net charge-offs of $1 thousand during the first quarter of 2022 and $90 thousand during the second quarter of 2021. As of June 30, 2022, the Company had no non-accrual loans, no loans 30 days or more past due and no other real estate owned assets.
At June 30, 2022, the allowance for loan losses was $20.0 million or 1.18% of outstanding loans, net of unearned income, compared to $20.0 million or 1.23% of outstanding loans, net of unearned income, at March 31, 2022. The decrease in the allowance to outstanding loans, net of unearned income, was primarily due to improvement in risk ratings and the net changes in other qualitative adjustments.
Income Statement Review
Quarterly Results
Net income for the second quarter of 2022 increased $1.8 million or 29.7% to $7.9 million compared to $6.1 million for the second quarter of 2021. Net income increased $208 thousand or 2.7% compared to $7.7 million for the first quarter of 2022.
Net interest income for the second quarter of 2022 increased $817 thousand or 5.5% compared to the second quarter of 2021, driven primarily by growth in the Company’s investment portfolio. The annualized net interest margin excluding the effects of accelerated amortization on the 2017 notes and interest expense on 2022 note (non-GAAP) for the second quarter of 2022 was 3.18% as compared to 3.31% for the same quarter of the prior year. The tax-equivalent yield on interest earning assets was 3.57% for the second quarter of 2022 compared to 3.75% for the same period in 2021. The year-over-year decrease in net interest margin and tax-equivalent yield on interest earning assets was primarily due to lower yields on the Company’s loan portfolio. The non-GAAP cost of interest-bearing liabilities was 0.56% for the second quarter of 2022 compared to 0.62% for the same quarter of the prior year. The decrease in the cost of interest-bearing liabilities was primarily due to a six basis point reduction in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits. 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 United States generally accepted accounting principles (“GAAP”).
The Company did not record a provision for loan losses for the second quarter of 2022, compared to a $90 thousand provision for the second quarter of 2021. The provision recorded during the second quarter of 2021 related to a charge-off for a loan that the Bank sold as part of a portfolio management strategy.
Non-interest income decreased $308 thousand or 73.9% during the second quarter of 2022 compared to the second quarter of 2021. The decrease in non-interest income was primarily due to mark-to-market adjustments of $(339) thousand resulting from a reduction in value of investments related to the Company’s nonqualified deferred compensation plan. Excluding the impact of the mark-to-market adjustments, non-interest income increased $31 thousand or 8.9% primarily due to increases in service charges and fees on deposit accounts, interchange and other fee income, and insurance commissions.
Non-interest expense decreased $1.4 million or 15.3% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The decrease in non-interest expense was primarily due to a decrease in salaries and employee benefits of $1.0 million or 18.0% driven primarily by a decrease in incentive compensation accruals. Incentive compensation accruals can fluctuate materially from quarter to quarter, based upon the Company’s financial performance and conditions measured against, among other evaluation criteria, our strategic plan and budget. At the end of each year, the ultimate determination of the incentive compensation is approved by the Board of Directors. 3
For the three months ended June 30, 2022, annualized non-interest expense to average assets was 1.38% compared to 1.79% for the three months ended June 30, 2021. The decrease was primarily due to lower incentive compensation accruals and non-recurring legal and professional fees incurred in 2021, coupled with continued cost consciousness.
For the three months ended June 30, 2022, the annualized efficiency ratio was 44.1% compared to 53.6% for the three months ended June 30, 2021. The decrease was primarily due to the increase in net interest income coupled with a decrease in incentive compensation accruals.
Year-to-Date Results
Net income for the six months ended June 30, 2022 increased $4.4 million or 39.5% to $15.6 million compared to $11.2 million for the six months ended June 30, 2021. The results for the six months ended June 30, 2022 reflect a combination of the impact of an increase in net interest income, a decrease in provision for loan loss expense, and a decrease in non-interest expense, which were partially offset by a decrease in non-interest income.
Net interest income for the six months ended June 30, 2022 increased $2.5 million or 7.5% compared to the six months ended June 30, 2021 and was driven primarily by growth in the Company’s loan and investment portfolios. The annualized non-GAAP net interest margin for the six months ended June 30, 2022 was 3.26% as compared to 3.37% for the same period of the prior year. The tax-equivalent yield on interest earning assets for the six months ended June 30, 2022 was 3.62% compared to 3.86% for the same period in the prior year. The year-over-year decrease in net interest margin and tax-equivalent yield on interest earning assets was primarily due to a lower yield on fixed rate investments and lower yields on the Company’s loan portfolio. The non-GAAP cost of interest-bearing liabilities was 0.51% for the six months ended June 30, 2022 compared to 0.68% for the same period of the prior year. The decrease in the cost of interest-bearing liabilities was primarily due to a 16 basis point reduction in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits.
The Company did not record a provision for loan losses for the six months ended June 30, 2022, compared to a $2.5 million provision for the six months ended June 30, 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy.
Non-interest income decreased $358 thousand or 40.6% during the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease in non-interest income was primarily due to mark-to-market adjustments of $(490) thousand resulting from a reduction in value of investments related to the Company’s nonqualified deferred compensation plan. Additionally, during the six months ended June 30, 2021, the Company realized a $10 thousand gain on the call of a security. Excluding the impacts of the mark-to-market adjustments and gain on call, non-interest income increased $142 thousand or 18.4% primarily due to increases in insurance commissions, service charges and fees on deposit accounts, and interchange and other fee income.
Non-interest expense decreased $493 thousand or 2.9% during the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease in non-interest expense was primarily due to non-recurring legal and professional fees incurred in 2021 and decreases in FDIC insurance fees due to lower insurance premiums. These decreases were partially offset by an increase in state franchise taxes as a result of an increase in the Bank’s equity year-over-year. 4
For the six months ended June 30, 2022, annualized non-interest expense to average assets was 1.49% compared to 1.72% for the six months ended June 30, 2021. The decrease was primarily due to non-recurring legal and professional fees incurred in 2021, coupled with continued cost consciousness.
For the six months ended June 30, 2022, the annualized efficiency ratio was 46.1% compared to 50.4% for the six months ended June 30, 2021. The decrease was primarily due to the increase in net interest income coupled with a decrease in other expenses. The increase was partially offset by a decrease in non-interest income.
Explanation of Non-GAAP Financial Measures
This release contains financial information and performance measures 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. 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:
| ● | Cost of interest-bearing liabilities that excludes the effects of accelerated amortization of debt costs associated with the Company’s 2017 notes and interest expense associated with the Company’s 2022 note. On July 15, 2022, the Company used the proceeds from the 2022 note to redeem the 2017 notes. |
|---|---|
| ● | Net interest margin that excludes the effects of accelerated amortization of debt costs associated with the Company’s 2017 notes, and interest expense associated with the Company’s 2022 note. |
| --- | --- |
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 for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.
For additional information, contact:
Christopher W. Bergstrom (703) 584-0840
Kent D. Carstater (703) 289-5922
About John Marshall Bancorp, Inc.
John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is a $2.32 billion bank 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. with one loan production office in Arlington, Virginia. 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.
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. The Company’s 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 its subsidiary include, but are not limited to the following: 5
changes in interest rates, general economic conditions, public health crises (such as the governmental, social and economic effects of COVID-19), levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, 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, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines, and other conditions which by their nature are not susceptible to accurate forecast, and are subject to significant uncertainty. 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.
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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, | | ||||||
| | 2022 | **** | 2021 | **** | 2022 | **** | 2021 | | |||||
| Selected Balance Sheet Data | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 120,887 | | $ | 168,004 | | $ | 120,887 | | $ | 168,004 | |
| Total investment securities | | | 473,914 | | | 306,030 | | | 473,914 | | | 306,030 | |
| Loans, net of unearned income | | | 1,692,652 | | | 1,567,112 | | | 1,692,652 | | | 1,567,112 | |
| Allowance for loan losses | | | 20,031 | | | 19,381 | | | 20,031 | | | 19,381 | |
| Total assets | | | 2,316,374 | | | 2,065,895 | | | 2,316,374 | | | 2,065,895 | |
| Non-interest bearing demand deposits | | | 512,284 | | | 478,705 | | | 512,284 | | | 478,705 | |
| Interest bearing deposits | | | 1,531,457 | | | 1,336,327 | | | 1,531,457 | | | 1,336,327 | |
| Total deposits | | | 2,043,741 | | | 1,815,032 | | | 2,043,741 | | | 1,815,032 | |
| Shareholders' equity | | | 207,530 | | | 195,246 | | | 207,530 | | | 195,246 | |
| | | | | | | | | | | | | | |
| Summary Results of Operations | | | | | | | | | | | | | |
| Interest income | | $ | 19,555 | | $ | 18,627 | | $ | 39,300 | | $ | 37,374 | |
| Interest expense | | | 2,247 | | | 2,136 | | | 4,076 | | | 4,601 | |
| Net interest income | | | 17,308 | | | 16,491 | | | 35,224 | | | 32,773 | |
| Provision for loan losses | | | - - | | | 90 | | | - - | | | 2,455 | |
| Net interest income after provision for loan losses | | | 17,308 | | | 16,401 | | | 35,224 | | | 30,318 | |
| Non-interest income | | | 109 | | | 417 | | | 523 | | | 881 | |
| Non-interest expense | | | 7,681 | | | 9,067 | | | 16,467 | | | 16,960 | |
| Income before income taxes | | | 9,736 | | | 7,751 | | | 19,280 | | | 14,239 | |
| Net income | | | 7,882 | | | 6,079 | | | 15,556 | | | 11,153 | |
| | | | | | | | | | | | | | |
| Per Share Data and Shares Outstanding | | | | | | | | | | | | | |
| Earnings per share - basic | | $ | 0.56 | | $ | 0.45 | | $ | 1.11 | | $ | 0.82 | |
| Earnings per share - diluted | | $ | 0.56 | | $ | 0.44 | | $ | 1.10 | | $ | 0.80 | |
| Book value per share | | $ | 14.80 | | $ | 14.32 | | $ | 14.80 | | $ | 14.32 | |
| Weighted average common shares (basic) | | | 13,932,256 | | | 13,572,779 | | | 13,858,057 | | | 13,565,320 | |
| Weighted average common shares (diluted) | | | 14,085,160 | | | 13,868,173 | | | 14,042,205 | | | 13,852,936 | |
| Common shares outstanding at end of period | | | 14,026,589 | | | 13,639,173 | | | 14,026,589 | | | 13,639,173 | |
| | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | |
| Return on average assets (annualized) | | | 1.41 | % | | 1.20 | % | | 1.41 | % | | 1.13 | % |
| Return on average equity (annualized) | | | 15.28 | % | | 12.64 | % | | 15.02 | % | | 11.78 | % |
| Net interest margin | | | 3.16 | % | | 3.31 | % | | 3.25 | % | | 3.37 | % |
| Non-interest income as a percentage of average assets (annualized) | | | 0.02 | % | | 0.08 | % | | 0.05 | % | | 0.09 | % |
| Non-interest expense to average assets (annualized) | | | 1.38 | % | | 1.79 | % | | 1.49 | % | | 1.72 | % |
| Efficiency ratio | | | 44.1 | % | | 53.6 | % | | 46.1 | % | | 50.4 | % |
| | | | | | | | | | | | | | |
| Asset Quality | | | | | | | | | | | | | |
| Non-performing assets to total assets | | | - - | % | | - - | % | | - - | % | | - - | % |
| Non-performing loans to total loans | | | - - | % | | - - | % | | - - | % | | - - | % |
| Allowance for loan losses to non-performing loans | | | N/M | | | N/M | | | N/M | | | N/M | |
| Allowance for loan losses to total loans ^(1)^ | | | 1.18 | % | | 1.24 | % | | 1.18 | % | | 1.24 | % |
| Net charge-offs (recoveries) to average loans (annualized) | | | - - | % | | 0.02 | % | | 0.00 | % | | 0.01 | % |
| | | | | | | | | | | | | | |
| Loans 30-89 days past due and accruing interest | | $ | - - | | $ | - - | | $ | - - | | $ | - - | |
| Non-accrual loans | | | - - | | | - - | | | - - | | | - - | |
| Other real estate owned | | | - - | | | - - | | | - - | | | - - | |
| Non-performing assets^(2)^ | | | - - | | | - - | | | - - | | | - - | |
| Troubled debt restructurings (total) | | | 536 | | | 473 | | | 536 | | | 473 | |
| Performing in accordance with modified terms | | | 536 | | | 473 | | | 536 | | | 473 | |
| Not performing in accordance with modified terms | | | - - | | | - - | | | - - | | | - - | |
| | | | | | | | | | | | | | |
| Capital Ratios (Bank Level) | | | | | | | | | | | | | |
| Equity / assets | | | 9.9 | % | | 9.5 | % | | 9.9 | % | | 9.5 | % |
| Total risk-based capital ratio | | | 15.1 | % | | 15.0 | % | | 15.1 | % | | 15.0 | % |
| Tier 1 risk-based capital ratio | | | 14.0 | % | | 13.9 | % | | 14.0 | % | | 13.9 | % |
| Leverage ratio | | | 11.0 | % | | 10.7 | % | | 11.0 | % | | 10.7 | % |
| Common equity tier 1 ratio | | | 14.0 | % | | 12.3 | % | | 14.0 | % | | 12.3 | % |
| | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | |
| Number of full time equivalent employees | | | 144 | | | 143 | | | 144 | | | 143 | |
| # Full service branch offices | | | 8 | | | 8 | | | 8 | | | 8 | |
| # Loan production or limited service branch offices | | | 1 | | | 1 | | | 1 | | | 1 | |
| (1) | The allowance for loan losses to total loans, excluding PPP loans, net of unearned income, of $216 thousand, was 1.18% at June 30, 2022. The allowance for loan losses to total loans, excluding PPP loans, net of unearned income, of $79.9 million, was 1.30% at June 30, 2021. PPP loans received no allocations in the allowance estimate due to the underlying guarantees. |
|---|---|
| (2) | Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings which were accruing interest at the date indicated. |
| --- | --- |
7
| | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | |||||
| | 2022 | **** | 2021 | | 2021 | Months | Year | |||||||
| Assets | | (Unaudited) | | (Unaudited) | | (Unaudited) | | | | |||||
| Cash and due from banks | | $ | 12,915 | | $ | 2,920 | | $ | 9,341 | | 342.3 | % | 38.3 | % |
| Interest-bearing deposits in banks | | | 107,972 | | | 102,879 | | | 158,663 | | 5.0 | % | (31.9) | % |
| Securities available-for-sale, at fair value | | | 365,134 | | | 239,300 | | | 299,485 | | 52.6 | % | 21.9 | % |
| Securities held-to-maturity, fair value of $88,862 and $103,258 at 6/30/2022 and 12/31/2021, respectively. | | | 102,265 | | | 105,509 | | | - - | | (3.1) | % | N/M | |
| Restricted securities, at cost | | | 4,417 | | | 4,951 | | | 4,939 | | (10.8) | % | (10.6) | % |
| Equity securities, at fair value | | | 2,098 | | | 1,869 | | | 1,606 | | 12.3 | % | 30.6 | % |
| Loans, net of unearned income | | | 1,692,652 | | | 1,666,469 | | | 1,567,112 | | 1.6 | % | 8.0 | % |
| Allowance for loan losses | | | (20,031) | | | (20,032) | | | (19,381) | | (0.0) | % | 3.4 | % |
| Net loans | | | 1,672,621 | | | 1,646,437 | | | 1,547,731 | | 1.6 | % | 8.1 | % |
| Bank premises and equipment, net | | | 1,443 | | | 1,620 | | | 1,955 | | (10.9) | % | (26.2) | % |
| Accrued interest receivable | | | 4,451 | | | 4,943 | | | 4,513 | | (10.0) | % | (1.4) | % |
| Bank owned life insurance | | | 21,188 | | | 20,998 | | | 20,794 | | 0.9 | % | 1.9 | % |
| Right of use assets | | | 4,281 | | | 4,913 | | | 5,608 | | (12.9) | % | (23.7) | % |
| Other assets | | | 17,589 | | | 12,970 | | | 11,260 | | 35.6 | % | 56.2 | % |
| | | | | | | | | | | | | | | |
| Total assets | | $ | 2,316,374 | | $ | 2,149,309 | | $ | 2,065,895 | | 7.8 | % | 12.1 | % |
| | | | | | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 512,284 | | $ | 488,838 | | $ | 478,705 | | 4.8 | % | 7.0 | % |
| Interest-bearing demand deposits | | | 738,666 | | | 633,901 | | | 587,878 | | 16.5 | % | 25.6 | % |
| Savings deposits | | | 112,276 | | | 101,376 | | | 79,119 | | 10.8 | % | 41.9 | % |
| Time deposits | | | 680,515 | | | 657,438 | | | 669,330 | | 3.5 | % | 1.7 | % |
| Total deposits | | | 2,043,741 | | | 1,881,553 | | | 1,815,032 | | 8.6 | % | 12.6 | % |
| Federal Home Loan Bank advances | | | - - | | | 18,000 | | | 18,000 | | (100.0) | % | (100.0) | % |
| Subordinated debt | | | 49,560 | | | 24,728 | | | 24,704 | | 100.4 | % | 100.6 | % |
| Accrued interest payable | | | 896 | | | 843 | | | 884 | | 6.3 | % | 1.4 | % |
| Lease liabilities | | | 4,538 | | | 5,182 | | | 5,873 | | (12.4) | % | (22.7) | % |
| Other liabilities | | | 10,109 | | | 10,533 | | | 6,156 | | (4.0) | % | 64.2 | % |
| Total liabilities | | | 2,108,844 | | | 1,940,839 | | | 1,870,649 | | 8.7 | % | 12.7 | % |
| | | | | | | | | | | | | | | |
| Shareholders' Equity | | | | | | | | | | | | | | |
| Preferred stock, par value $0.01 per share; authorized | | | | | | | | | | | | | | |
| 1,000,000 shares; none issued | | | - - | | | - - | | | - - | | 0.0 | % | 0.0 | % |
| Common stock, nonvoting, par value $0.01 per share; authorized | | | | | | | | | | | | | | |
| 1,000,000 shares; none issued | | | - - | | | - - | | | - - | | 0.0 | % | 0.0 | % |
| Common stock, voting, par value $0.01 per share; authorized | | | | | | | | | | | | | | |
| 30,000,000 shares; issued and outstanding, 14,026,589 | | | | | | | | | | | | | | |
| at 6/30/2022 including 58,536 unvested shares, 13,745,598 | | | | | | | | | | | | | | |
| shares at 12/31/2021 including 75,826 unvested shares | | | | | | | | | | | | | | |
| and 13,639,173 at 6/30/2021, including 60,995 unvested shares | | | 140 | | | 137 | | | 136 | | 2.2 | % | 2.9 | % |
| Additional paid-in capital | | | 93,935 | | | 91,107 | | | 90,448 | | 3.1 | % | 3.9 | % |
| Retained earnings | | | 130,383 | | | 117,626 | | | 103,318 | | 10.8 | % | 26.2 | % |
| Accumulated other comprehensive income (loss) | | | (16,928) | | | (400) | | | 1,344 | | N/M | | N/M | |
| | | | | | | | | | | | | | | |
| Total shareholders' equity | | | 207,530 | | | 208,470 | | | 195,246 | | (0.5) | % | 6.3 | % |
| | | | | | | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 2,316,374 | | $ | 2,149,309 | | $ | 2,065,895 | | 7.8 | % | 12.1 | % |
8
| | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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, | | | | ||||||||
| | 2022 | **** | 2021 | **** | % Change | 2022 | **** | 2021 | **** | % Change | |||||||
| | | (Unaudited) | | (Unaudited) | | | **** | (Unaudited) | | (Unaudited) | | | **** | ||||
| Interest and Dividend Income | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 17,334 | | $ | 17,499 | | (0.9) | % | $ | 35,518 | | $ | 35,338 | | 0.5 | % |
| Interest on investment securities, taxable | | | 1,893 | | | 993 | | 90.6 | % | | 3,273 | | | 1,762 | | 85.8 | % |
| Interest on investment securities, tax-exempt | | | 30 | | | 30 | | 0.0 | % | | 60 | | | 60 | | 0.0 | % |
| Dividends | | | 64 | | | 66 | | (3.0) | % | | 124 | | | 131 | | (5.3) | % |
| Interest on deposits in banks | | | 234 | | | 39 | | 500.0 | % | | 325 | | | 83 | | 291.6 | % |
| Total interest and dividend income | | | 19,555 | | | 18,627 | | 5.0 | % | | 39,300 | | | 37,374 | | 5.2 | % |
| | | | | | | | | | | | | | | | | | |
| Interest Expense | | | | | | | | | | | | | | | | | |
| Deposits | | | 1,698 | | | 1,735 | | (2.1) | % | | 3,021 | | | 3,795 | | (20.4) | % |
| Federal Home Loan Bank advances | | | 12 | | | 30 | | (60.0) | % | | 42 | | | 63 | | (33.3) | % |
| Subordinated debt | | | 537 | | | 371 | | 44.7 | % | | 1,013 | | | 743 | | 36.3 | % |
| Total interest expense | | | 2,247 | | | 2,136 | | 5.2 | % | | 4,076 | | | 4,601 | | (11.4) | % |
| | | | | | | | | | | | | | | | | | |
| Net interest income | | | 17,308 | | | 16,491 | | 5.0 | % | | 35,224 | | | 32,773 | | 7.5 | % |
| | | | | | | | | | | | | | | | | | |
| Provision for loan losses | | | - - | | | 90 | | N/M | | | - - | | | 2,455 | | N/M | |
| | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 17,308 | | | 16,401 | | 5.5 | % | | 35,224 | | | 30,318 | | 16.2 | % |
| | | | | | | | | | | | | | | | | | |
| Non-interest Income | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 84 | | | 60 | | 40.0 | % | | 161 | | | 118 | | 36.4 | % |
| Bank owned life insurance | | | 95 | | | 100 | | (5.0) | % | | 190 | | | 207 | | (8.2) | % |
| Other service charges and fees | | | 157 | | | 116 | | 35.3 | % | | 294 | | | 220 | | 33.6 | % |
| Gains on securities | | | - - | | | - - | | N/M | | | - - | | | 10 | | N/M | |
| Insurance commissions | | | 44 | | | 22 | | 100.0 | % | | 265 | | | 177 | | 49.7 | % |
| Other income (loss) | | | (271) | | | 119 | | (327.7) | % | | (387) | | | 149 | | (359.7) | % |
| Total non-interest income | | | 109 | | | 417 | | (73.9) | % | | 523 | | | 881 | | (40.6) | % |
| | | | | | | | | | | | | | | | | | |
| Non-interest Expenses | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 4,655 | | | 5,680 | | (18.0) | % | | 10,682 | | | 10,669 | | 0.1 | % |
| Occupancy expense of premises | | | 482 | | | 514 | | (6.2) | % | | 975 | | | 1,021 | | (4.5) | % |
| Furniture and equipment expenses | | | 341 | | | 378 | | (9.8) | % | | 666 | | | 700 | | (4.9) | % |
| Other expenses | | | 2,203 | | | 2,495 | | (11.7) | % | | 4,144 | | | 4,570 | | (9.3) | % |
| Total non-interest expense | | | 7,681 | | | 9,067 | | (15.3) | % | | 16,467 | | | 16,960 | | (2.9) | % |
| | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 9,736 | | | 7,751 | | 25.6 | % | | 19,280 | | | 14,239 | | 35.4 | % |
| | | | | | | | | | | | | | | | | | |
| Income tax expense | | | 1,854 | | | 1,672 | | 10.9 | % | | 3,724 | | | 3,086 | | 20.7 | % |
| | | | | | | | | | | | | | | | | | |
| Net income | | $ | 7,882 | | $ | 6,079 | | 29.7 | % | $ | 15,556 | | $ | 11,153 | | 39.5 | % |
| | | | | | | | | | | | | | | | | | |
| Earnings Per Share | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.56 | | $ | 0.45 | | 24.4 | % | $ | 1.11 | | $ | 0.82 | | 35.4 | % |
| Diluted | | $ | 0.56 | | $ | 0.44 | | 27.3 | % | $ | 1.10 | | $ | 0.80 | | 37.5 | % |
9
| | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| Historical Trends - Quarterly Financial Data (Unaudited) | |||||||||||||||||||
| (Dollar amounts in thousands, except per share data) | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | 2022 | | 2021 | | ||||||||||||||
| | **** | June 30 | **** | March 31 | **** | December 31 | **** | September 30 | **** | June 30 | **** | March 31 | **** | ||||||
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 19,555 | | $ | 19,745 | | $ | 18,703 | | $ | 18,042 | | $ | 18,627 | | $ | 18,747 | |
| Interest expense | | | 2,247 | | | 1,829 | | | 1,734 | | | 1,876 | | | 2,136 | | | 2,465 | |
| Net interest income | | | 17,308 | | | 17,916 | | | 16,969 | | | 16,166 | | | 16,491 | | | 16,282 | |
| Provision for loan losses | | | - - | | | - - | | | 325 | | | 325 | | | 90 | | | 2,365 | |
| Non-interest income | | | 109 | | | 414 | | | 513 | | | 325 | | | 417 | | | 464 | |
| Non-interest expense | | | 7,681 | | | 8,786 | | | 7,679 | | | 7,623 | | | 9,067 | | | 7,893 | |
| Income before income taxes | | | 9,736 | | | 9,544 | | | 9,478 | | | 8,543 | | | 7,751 | | | 6,488 | |
| Income tax expense | | | 1,854 | | | 1,870 | | | 1,931 | | | 1,782 | | | 1,672 | | | 1,414 | |
| Net income | | $ | 7,882 | | $ | 7,674 | | $ | 7,547 | | $ | 6,761 | | $ | 6,079 | | $ | 5,074 | |
| | | | | | | | | | | | | | | | | | | | |
| Financial performance: | | | | | | | | | | | | | | | | | | | |
| Return on average assets (annualized) | | | 1.41 | % | | 1.40 | % | | 1.41 | % | | 1.30 | % | | 1.20 | % | | 1.05 | % |
| Return on average equity (annualized) | | | 15.28 | % | | 14.76 | % | | 14.52 | % | | 13.35 | % | | 12.64 | % | | 10.89 | % |
| Net interest margin | | | 3.16 | % | | 3.33 | % | | 3.22 | % | | 3.15 | % | | 3.31 | % | | 3.43 | % |
| Non-interest income as a percentage of average assets (annualized) | | | 0.02 | % | | 0.08 | % | | 0.10 | % | | 0.06 | % | | 0.08 | % | | 0.10 | % |
| Non-interest expense to average assets (annualized) | | | 1.38 | % | | 1.61 | % | | 1.44 | % | | 1.46 | % | | 1.79 | % | | 1.64 | % |
| Efficency ratio | | | 44.1 | % | | 47.9 | % | | 43.9 | % | | 46.2 | % | | 53.6 | % | | 47.1 | % |
| | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | |
| Earnings per share - basic | | $ | 0.56 | | $ | 0.55 | | $ | 0.55 | | $ | 0.50 | | $ | 0.45 | | $ | 0.37 | |
| Earnings per share - diluted | | $ | 0.56 | | $ | 0.55 | | $ | 0.54 | | $ | 0.48 | | $ | 0.44 | | $ | 0.37 | |
| Book value per share | | $ | 14.80 | | $ | 14.68 | | $ | 15.17 | | $ | 14.82 | | $ | 14.32 | | $ | 13.85 | |
| Weighted average common shares (basic) | | | 13,932,256 | | | 13,783,034 | | | 13,581,586 | | | 13,580,538 | | | 13,572,779 | | | 13,557,779 | |
| Weighted average common shares (diluted) | | | 14,085,160 | | | 13,991,692 | | | 13,879,595 | | | 13,883,104 | | | 13,868,147 | | | 13,809,751 | |
| Common shares outstanding at end of period | | | 14,026,589 | | | 13,950,570 | | | 13,745,598 | | | 13,644,985 | | | 13,639,173 | | | 13,634,754 | |
| Dividends declared per share | | $ | - - | | $ | 0.20 | | $ | - - | | $ | - - | | $ | - - | | $ | - - | |
| | | | | | | | | | | | | | | | | | | | |
| Non-interest Income | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | $ | 84 | | $ | 77 | | $ | 74 | | $ | 70 | | $ | 60 | | $ | 58 | |
| Bank owned life insurance | | | 95 | | | 95 | | | 102 | | | 102 | | | 100 | | | 107 | |
| Other service charges and fees | | | 157 | | | 137 | | | 138 | | | 120 | | | 115 | | | 104 | |
| Gains on securities | | | - - | | | - - | | | - - | | | - - | | | - - | | | 10 | |
| Insurance commissions | | | 44 | | | 221 | | | 79 | | | 28 | | | 22 | | | 155 | |
| Other income (loss) | | | (271) | | | (116) | | | 120 | | | 5 | | | 120 | | | 30 | |
| Total non-interest income | | $ | 109 | | $ | 414 | | $ | 513 | | $ | 325 | | $ | 417 | | $ | 464 | |
| | | | | | | | | | | | | | | | | | | | |
| Non-interest Expenses | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 4,655 | | $ | 6,027 | | $ | 4,765 | | $ | 4,977 | | $ | 5,680 | | $ | 4,989 | |
| Occupancy expense of premises | | | 482 | | | 493 | | | 480 | | | 484 | | | 514 | | | 507 | |
| Furniture and equipment expenses | | | 341 | | | 325 | | | 363 | | | 373 | | | 378 | | | 322 | |
| Other expenses | | | 2,203 | | | 1,941 | | | 2,071 | | | 1,789 | | | 2,495 | | | 2,075 | |
| Total non-interest expenses | | $ | 7,681 | | $ | 8,786 | | $ | 7,679 | | $ | 7,623 | | $ | 9,067 | | $ | 7,893 | |
| | | | | | | | | | | | | | | | | | | | |
| Balance Sheets at Quarter End | | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 1,692,652 | | $ | 1,631,260 | | $ | 1,666,469 | | $ | 1,602,377 | | $ | 1,567,112 | | $ | 1,605,783 | |
| Allowance for loan losses | | | (20,031) | | | (20,031) | | | (20,032) | | | (19,706) | | | (19,381) | | | (19,381) | |
| Investment securities | | | 473,914 | | | 409,692 | | | 351,629 | | | 348,742 | | | 306,030 | | | 219,106 | |
| Interest-earning assets | | | 2,274,968 | | | 2,217,553 | | | 2,121,407 | | | 2,062,000 | | | 2,032,235 | | | 1,979,848 | |
| Total assets | | | 2,316,374 | | | 2,249,609 | | | 2,149,309 | | | 2,095,504 | | | 2,065,895 | | | 2,009,988 | |
| Total deposits | | | 2,043,741 | | | 1,983,099 | | | 1,881,553 | | | 1,837,548 | | | 1,815,032 | | | 1,761,390 | |
| Total interest-bearing liabilities | | | 1,581,017 | | | 1,530,133 | | | 1,435,443 | | | 1,416,396 | | | 1,379,031 | | | 1,388,286 | |
| Total shareholders' equity | | | 207,530 | | | 204,855 | | | 208,470 | | | 202,222 | | | 195,246 | | | 188,904 | |
| | | | | | | | | | | | | | | | | | | | |
| Quarterly Average Balance Sheets | | | | | | | | | | | | | | | | | | | |
| Total gross loans | | $ | 1,641,914 | | $ | 1,620,533 | | $ | 1,629,124 | | $ | 1,580,695 | | $ | 1,602,125 | | $ | 1,575,847 | |
| Allowance for loan losses | | | (20,031) | | | (20,032) | | | (19,889) | | | (19,525) | | | (19,530) | | | (17,816) | |
| Investment securities | | | 447,688 | | | 376,608 | | | 356,007 | | | 325,027 | | | 256,671 | | | 180,180 | |
| Interest-earning assets | | | 2,204,709 | | | 2,183,897 | | | 2,090,052 | | | 2,038,384 | | | 1,996,555 | | | 1,922,835 | |
| Total assets | | | 2,240,119 | | | 2,216,131 | | | 2,121,980 | | | 2,069,143 | | | 2,027,364 | | | 1,954,088 | |
| Total deposits | | | 1,980,231 | | | 1,946,882 | | | 1,857,782 | | | 1,812,635 | | | 1,820,939 | | | 1,709,678 | |
| Total interest-bearing liabilities | | | 1,504,574 | | | 1,505,854 | | | 1,419,679 | | | 1,384,867 | | | 1,381,583 | | | 1,350,742 | |
| Total shareholders' equity | | | 206,967 | | | 210,900 | | | 206,237 | | | 200,990 | | | 192,918 | | | 188,995 | |
| | | | | | | | | | | | | | | | | | | | |
| Financial Measures | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 9.2 | % | | 9.5 | % | | 9.7 | % | | 9.7 | % | | 9.5 | % | | 9.7 | % |
| Investment securities to earning assets | | | 20.8 | % | | 18.5 | % | | 16.6 | % | | 16.9 | % | | 15.1 | % | | 11.1 | % |
| Loans to earning assets | | | 74.4 | % | | 73.6 | % | | 78.6 | % | | 77.7 | % | | 77.1 | % | | 81.1 | % |
| Loans to assets | | | 73.1 | % | | 72.5 | % | | 77.5 | % | | 76.5 | % | | 75.9 | % | | 79.9 | % |
| Loans to deposits | | | 82.8 | % | | 82.3 | % | | 88.6 | % | | 87.2 | % | | 86.3 | % | | 91.2 | % |
| | | | | | | | | | | | | | | | | | | | |
| Capital Ratios (Bank Level) | | | | | | | | | | | | | | | | | | | |
| Equity / assets | | | 9.9 | % | | 10.2 | % | | 10.8 | % | | 10.8 | % | | 10.6 | % | | 10.5 | % |
| Total risk-based capital ratio | | | 15.1 | % | | 15.4 | % | | 15.3 | % | | 15.2 | % | | 15.0 | % | | 14.6 | % |
| Tier 1 risk-based capital ratio | | | 14.0 | % | | 14.2 | % | | 14.0 | % | | 14.0 | % | | 13.9 | % | | 13.4 | % |
| Leverage ratio | | | 11.0 | % | | 10.8 | % | | 11.0 | % | | 10.8 | % | | 10.7 | % | | 10.8 | % |
| Common equity tier 1 ratio | | | 14.0 | % | | 14.2 | % | | 14.0 | % | | 14.0 | % | | 12.3 | % | | 13.4 | % |
10
| | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| Loan, Deposit and Borrowing Detail (Unaudited) | |||||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | 2022 | | 2021 | | ||||||||||||||
| | | 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 | | 2.8 | % | 3.2 | % | 3.2 | % | 3.3 | % | 3.5 | % | 3.8 | % | ||||||
| Commercial PPP loans | | | 0.0 | % | | 0.5 | % | | 4.2 | % | | 4.7 | % | | 5.2 | % | | 7.3 | % |
| Commercial owner-occupied real estate loans | | | 22.4 | % | | 20.9 | % | | 20.7 | % | | 20.4 | % | | 20.4 | % | | 19.2 | % |
| Total business loans | | | 25.2 | % | | 24.6 | % | | 28.1 | % | | 28.4 | % | | 29.2 | % | | 30.3 | % |
| | | | | | | | | | | | | | | | | | | | |
| Investor real estate loans | | | 35.5 | % | | 34.0 | % | | 31.4 | % | | 32.4 | % | | 32.3 | % | | 31.3 | % |
| Construction & development loans | | | 11.2 | % | | 13.4 | % | | 13.9 | % | | 14.3 | % | | 14.0 | % | | 15.6 | % |
| Multi-family loans | | | 6.3 | % | | 6.1 | % | | 6.0 | % | | 5.1 | % | | 5.9 | % | | 5.3 | % |
| Total commercial real estate loans | | | 53.0 | % | | 53.5 | % | | 51.3 | % | | 51.8 | % | | 52.1 | % | | 52.2 | % |
| | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | 21.8 | % | | 21.9 | % | | 20.6 | % | | 19.8 | % | | 18.6 | % | | 17.5 | % |
| Consumer loans | | | 0.0 | % | | 0.0 | % | | 0.0 | % | | 0.0 | % | | 0.1 | % | | 0.0 | % |
| Total loans | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Less: Allowance for loan losses | | | | | | | | | | | | | | | | | | | |
| Net deferred loan costs (fees) | | | | | | | | | | | | | | | | | | | |
| Net loans | | | | | | | | | | | | | | ||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 2022 | | 2021 | | ||||||||||||||
| | | June 30 | | March 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 | | 25.1 | % | 25.0 | % | 26.0 | % | 25.2 | % | 26.4 | % | 23.8 | % | ||||||
| Interest-bearing demand deposits: | | | | | | | | | | | | | | | | | | | |
| NOW accounts(1) | | | 16.6 | % | | 17.4 | % | | 14.2 | % | | 16.0 | % | | 14.0 | % | | 13.9 | % |
| Money market accounts(1) | | | 19.6 | % | | 20.9 | % | | 19.4 | % | | 18.3 | % | | 18.4 | % | | 19.6 | % |
| Savings accounts | | | 5.4 | % | | 5.8 | % | | 5.4 | % | | 5.2 | % | | 4.4 | % | | 4.1 | % |
| Certificates of deposit | | | | | | | | | | | | | | | | | | | |
| $250,000 or more | | | 12.5 | % | | 12.1 | % | | 13.3 | % | | 12.7 | % | | 13.4 | % | | 15.1 | % |
| Less than $250,000 | | | 4.3 | % | | 4.6 | % | | 5.5 | % | | 5.7 | % | | 6.2 | % | | 6.8 | % |
| QwickRate® certificates of deposit | | | 1.0 | % | | 1.2 | % | | 1.3 | % | | 1.6 | % | | 1.7 | % | | 2.2 | % |
| IntraFi® certificates of deposit | | | 1.6 | % | | 2.0 | % | | 3.3 | % | | 3.6 | % | | 3.3 | % | | 2.2 | % |
| Brokered deposits | | | 13.9 | % | | 11.0 | % | | 11.6 | % | | 11.7 | % | | 12.1 | % | | 12.3 | % |
| Total deposits | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| | | | | | | | | | | | | | | | | | | | |
| Borrowings | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank advances | | 0.0 | % | 42.0 | % | 42.1 | % | 42.1 | % | 42.2 | % | 47.1 | % | ||||||
| Subordinated debt | | | 100.0 | % | | 58.0 | % | | 57.9 | % | | 57.9 | % | | 57.8 | % | | 52.9 | % |
| Total borrowings | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| | | | | | | | | | | | | | | | | | | | |
| Total deposits and borrowings | | | | | | | | | | | | | | ||||||
| | | | | | | | | | | | | | | | | | | | |
| Core customer funding sources (2) | | 85.1 | % | 85.2 | % | 86.3 | % | 85.9 | % | 85.3 | % | 84.4 | % | ||||||
| Wholesale funding sources (3) | | | 14.9 | % | | 12.7 | % | | 13.7 | % | | 14.1 | % | | 14.7 | % | | 15.6 | % |
| Total funding sources | | 100.0 | % | 97.9 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
All values are in US Dollars.
| (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 and Federal Home Loan Bank advances. |
| --- | --- |
11
| | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| Average Balance Sheets, Interest and Rates (unaudited) | | ||||||||||||||||
| (Dollar amounts in thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| | | Six months ended June 30, 2022 | | Six months ended June 30, 2021 | |||||||||||||
| | **** | | | **** | Interest Income / | **** | Average | **** | | | **** | Interest Income / | **** | Average | **** | ||
| | | Average Balance | | Expense | | Rate | | Average Balance | | Expense | | Rate | **** | ||||
| Assets: | | | | | | ||||||||||||
| Securities: | | | | | | ||||||||||||
| Taxable | | $ | 407,341 | $ | 3,397 | 1.68 | % | $ | 213,585 | $ | 1,892 | 1.79 | % | ||||
| Tax-exempt(1) | | 5,004 | | 76 | 3.06 | % | 5,052 | | 77 | 3.07 | % | ||||||
| Total securities | | $ | 412,345 | | $ | 3,473 | 1.70 | % | $ | 218,637 | | $ | 1,969 | 1.82 | % | ||
| Loans, net of unearned income(2): | | | | | | | |||||||||||
| Taxable | | 1,611,916 | | 35,209 | 4.40 | % | 1,570,969 | | 35,001 | 4.49 | % | ||||||
| Tax-exempt(1) | | 19,367 | | 391 | 4.07 | % | 18,090 | | 427 | 4.76 | % | ||||||
| Total loans, net of unearned income | | $ | 1,631,283 | | $ | 35,600 | 4.40 | % | $ | 1,589,059 | | $ | 35,428 | 4.50 | % | ||
| Interest-bearing deposits in other banks | | $ | 150,734 | | $ | 325 | 0.43 | % | $ | 152,203 | | $ | 83 | 0.11 | % | ||
| Total interest-earning assets | | $ | 2,194,362 | | $ | 39,398 | 3.62 | % | $ | 1,959,899 | | $ | 37,480 | 3.86 | % | ||
| Total non-interest earning assets | | 33,830 | | | | | 31,029 | | | ||||||||
| Total assets | | $ | 2,228,192 | | | | | $ | 1,990,928 | | | ||||||
| Liabilities & Shareholders’ Equity: | | | | | | ||||||||||||
| Interest-bearing deposits | | | | | | ||||||||||||
| NOW accounts | | $ | 323,546 | | $ | 424 | 0.26 | % | $ | 244,952 | | $ | 392 | 0.32 | % | ||
| Money market accounts | | 395,532 | | 789 | 0.40 | % | 336,528 | | | 630 | 0.38 | % | |||||
| Savings accounts | | 111,312 | | 177 | 0.32 | % | 71,307 | | | 135 | 0.38 | % | |||||
| Time deposits | | 635,359 | | 1,631 | 0.52 | % | 670,014 | | | 2,638 | 0.79 | % | |||||
| Total interest-bearing deposits | | $ | 1,465,749 | | $ | 3,021 | 0.42 | % | $ | 1,322,801 | | $ | 3,795 | 0.58 | % | ||
| Subordinated debt | | 27,007 | | 1,013 | 7.56 | % | 24,690 | | 743 | 6.07 | % | ||||||
| Other borrowed funds | | 12,453 | | 42 | 0.68 | % | 18,757 | | 63 | 0.68 | % | ||||||
| Total interest-bearing liabilities | | $ | 1,505,209 | | $ | 4,076 | 0.55 | % | $ | 1,366,248 | | $ | 4,601 | 0.68 | % | ||
| Demand deposits | | 497,899 | | | | | 421,349 | | | ||||||||
| Other liabilities | | 16,161 | | | | | 12,364 | | | ||||||||
| Total liabilities | | $ | 2,019,269 | | | | | $ | 1,799,961 | | | ||||||
| Shareholders’ equity | | $ | 208,923 | | | | | $ | 190,967 | | | ||||||
| Total liabilities and shareholders’ equity | | $ | 2,228,192 | | | | | $ | 1,990,928 | | | ||||||
| | | | | | | | | | | | | | | | | | |
| Tax-equivalent net interest income and spread | | | | | $ | 35,322 | | 3.07 | % | | | | $ | 32,879 | | 3.18 | % |
| Less: tax-equivalent adjustment | | | | | | 98 | | | | | | | | 106 | | | |
| Net interest income | | | | | $ | 35,224 | | | | | | | $ | 32,773 | | | |
| | | | | | | | | | | | | | | | | | |
| Interest income/earnings assets | | | | | | | | 3.62 | % | | | | | | | 3.86 | % |
| Interest expense/earning assets | | | | | | | | 0.37 | % | | | | | | | 0.48 | % |
| Net interest margin | | | | | | | | 3.25 | % | | | | | | | 3.38 | % |
| (1) | Tax-equivalent income has 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 $98 thousand and $106 thousand in 2022 and 2021, respectively. |
|---|
(2) The Company did not have any loans on non-accrual as of June 30, 2022 or June 30, 2021.
12
| | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| Average Balance Sheets, Interest and Rates (unaudited) | | ||||||||||||||||
| (Dollar amounts in thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| | | Three months ended June 30, 2022 | | Three months ended June 30, 2021 | |||||||||||||
| | **** | | | **** | Interest Income / | **** | Average | **** | | | **** | Interest Income / | **** | Average | **** | ||
| | | Average Balance | | Expense | | Rate | | Average Balance | | Expense | | Rate | **** | ||||
| Assets: | | | | | | ||||||||||||
| Securities: | | | | | | ||||||||||||
| Taxable | | $ | 442,686 | $ | 1,957 | 1.77 | % | $ | 251,654 | $ | 1,059 | 1.69 | % | ||||
| Tax-exempt^(1)^ | | 5,002 | | 38 | 3.05 | % | 5,017 | | 38 | 3.04 | % | ||||||
| Total securities | | $ | 447,688 | | $ | 1,995 | 1.79 | % | $ | 256,671 | | $ | 1,097 | 1.71 | % | ||
| Loans, net of unearned income^(2)^: | | | | | | | |||||||||||
| Taxable | | 1,622,666 | | 17,180 | 4.25 | % | 1,577,125 | | 17,295 | 4.40 | % | ||||||
| Tax-exempt^(1)^ | | 19,248 | | 195 | 4.06 | % | 25,000 | | 259 | 4.16 | % | ||||||
| Total loans, net of unearned income | | $ | 1,641,914 | | $ | 17,375 | 4.24 | % | $ | 1,602,125 | | $ | 17,554 | 4.39 | % | ||
| Interest-bearing deposits in other banks | | $ | 115,107 | | $ | 234 | 0.82 | % | $ | 137,759 | | $ | 39 | 0.11 | % | ||
| Total interest-earning assets | | $ | 2,204,709 | | $ | 19,604 | 3.57 | % | $ | 1,996,555 | | $ | 18,690 | 3.75 | % | ||
| Total non-interest earning assets | | 35,410 | | | | | 30,809 | | | ||||||||
| Total assets | | $ | 2,240,119 | | | | | $ | 2,027,364 | | | ||||||
| Liabilities & Shareholders’ Equity: | | | | | | ||||||||||||
| Interest-bearing deposits | | | | | | ||||||||||||
| NOW accounts | | $ | 322,255 | | $ | 222 | 0.28 | % | $ | 250,845 | | $ | 194 | 0.31 | % | ||
| Money market accounts | | 398,641 | | 439 | 0.44 | % | 337,752 | | | 314 | 0.37 | % | |||||
| Savings accounts | | 114,216 | | 89 | 0.31 | % | 75,321 | | | 70 | 0.37 | % | |||||
| Time deposits | | 633,273 | | 948 | 0.60 | % | 674,969 | | | 1,157 | 0.69 | % | |||||
| Total interest-bearing deposits | | $ | 1,468,385 | | $ | 1,698 | 0.46 | % | $ | 1,338,887 | | $ | 1,735 | 0.52 | % | ||
| Subordinated debt | | 29,222 | | 537 | 7.37 | % | 24,696 | | 371 | 6.03 | % | ||||||
| Other borrowed funds | | 6,967 | | 12 | 0.69 | % | 18,000 | | 30 | 0.67 | % | ||||||
| Total interest-bearing liabilities | | $ | 1,504,574 | | $ | 2,247 | 0.60 | % | $ | 1,381,583 | | $ | 2,136 | 0.62 | % | ||
| Demand deposits | | 511,846 | | | | | 439,356 | | | ||||||||
| Other liabilities | | 16,732 | | | | | 13,507 | | | ||||||||
| Total liabilities | | $ | 2,033,152 | | | | | $ | 1,834,446 | | | ||||||
| Shareholders’ equity | | $ | 206,967 | | | | | $ | 192,918 | | | ||||||
| Total liabilities and shareholders’ equity | | $ | 2,240,119 | | | | | $ | 2,027,364 | | | ||||||
| | | | | | | | | | | | | | | | | | |
| Tax-equivalent net interest income and spread | | | | | $ | 17,357 | | 2.97 | % | | | | $ | 16,554 | | 3.13 | % |
| Less: tax-equivalent adjustment | | | | | | 49 | | | | | | | | 63 | | | |
| Net interest income | | | | | $ | 17,308 | | | | | | | $ | 16,491 | | | |
| | | | | | | | | | | | | | | | | | |
| Interest income/earnings assets | | | | | | | | 3.57 | % | | | | | | | 3.75 | % |
| Interest expense/earning assets | | | | | | | | 0.41 | % | | | | | | | 0.43 | % |
| Net interest margin | | | | | | | | 3.16 | % | | | | | | | 3.32 | % |
| (1) | Tax-equivalent income has 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 $49 thousand and $63 thousand in 2022 and 2021, respectively. |
|---|
(2) The Company did not have any loans on non-accrual as of June 30, 2022 or June 30, 2021.
13
| | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | | |||||||||||||
| | | | | | | | | | | | | | | |
| Reconciliation of Certain Non-GAAP Financial Measures (unaudited) | | |||||||||||||
| (Dollar amounts in thousands) | | |||||||||||||
| | | | | | | | | | | | | | | |
| | | Three months ended | | | Six months ended | | ||||||||
| | | June 30, | | | June 30, | | ||||||||
| | 2022 | 2021 | | | 2022 | 2021 | | |||||||
| Cost of interest-bearing liabilities adjustment | | | | | | | | |||||||
| Interest expense (GAAP) | | $ | 2,247 | | $ | 2,136 | | | $ | 4,076 | | $ | 4,601 | |
| Less: Accelerated amortization on 2017 notes | | | 104 | | | — | | | | 208 | | | — | |
| Less: Interest expense on 2022 note | | 62 | | — | | | 62 | | — | | ||||
| Interest expense, excluding accelerated amortization on 2017 notes and interest expense on 2022 note (Non-GAAP) | | $ | 2,081 | | $ | 2,136 | | | $ | 3,806 | | $ | 4,601 | |
| | | | | | | | | | | | | | | |
| Average interest-bearing liabilities (GAAP) | | $ | 1,504,574 | | $ | 1,381,583 | | | $ | 1,505,209 | | $ | 1,366,248 | |
| Less: Average balance of 2017 notes without accelerated amortization | | | 51 | | | — | | | | 101 | | | — | |
| Less: Average balance of 2022 note | | 4,325 | | — | | | 2,174 | | — | | ||||
| Average interest-bearing liabilities, excluding accelerated amortization on 2017 notes and interest expense on 2022 note (Non-GAAP) | | $ | 1,500,198 | | $ | 1,381,583 | | | $ | 1,502,934 | | $ | 1,366,248 | |
| | | | | | | | | | | | | | | |
| Cost of interest-bearing liabilities (GAAP) | | | 0.60 | % | | 0.62 | % | | | 0.55 | % | | 0.68 | % |
| Cost of interest-bearing liabilities, excluding accelerated amortization on 2017 notes and interest expense on 2022 note (GAAP) | | | 0.56 | % | | 0.62 | % | | | 0.51 | % | | 0.68 | % |
| | | | | | | | | | | | | | | |
| Net interest margin adjustment | | | | | | | | | | | | | | |
| Interest income (GAAP) | | $ | 19,555 | | $ | 18,627 | | | $ | 39,300 | | $ | 37,374 | |
| Interest expense, excluding accelerated amortization on 2017 notes and interest expense on 2022 note (Non-GAAP) | | | 2,081 | | | 2,136 | | | | 3,806 | | | 4,601 | |
| Average interest-earning assets (GAAP) | | | 2,204,709 | | | 1,996,555 | | | | 2,194,362 | | | 1,959,899 | |
| Net interest margin (GAAP) | | | 3.15 | % | | 3.31 | % | | | 3.24 | % | | 3.37 | % |
| Net interest margin, excluding accelerated amortization on 2017 notes and interest expense on 2022 note (Non-GAAP) | | | 3.18 | % | | 3.31 | % | | | 3.26 | % | | 3.37 | % |
14