8-K
John Marshall Bancorp, Inc. (JMSB)
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): April 19, 2023
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 East , 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 April 19, 2023, John Marshall Bancorp, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for the quarter ended March 31, 2023. 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 April 19, 2023. |
| 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: April 19, 2023 | By: | /s/ Kent D. Carstater |
| Kent D. Carstater<br><br>Senior Executive Vice President, Chief Financial Officer |
Exhibit 99.1
For Immediate Release
April 19, 2023
John Marshall Bancorp, Inc. Reports Solid 1^st^ Quarter 2023 Earnings
Conservative Operating Philosophy Demonstrated by Continued Balance Sheet Strength
Reston, VA – John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported its financial results for the three months ended March 31, 2023.
Selected Highlights
| ● | Pristine Asset Quality – For the fourteenth consecutive quarter, the Company had no nonperforming loans, no other real estate owned, and no loans 30 days or more past due. As of March 31, 2023, there were no loans 15 days or more past due. There were no charge-offs during the quarter. The Company remains steadfast in adhering to our strict underwriting standards and the diligent management of the portfolio. |
|---|---|
| ● | Increased Core Funding Percentage – The Company reduced wholesale funding sources $3.8 million or 1.0% during the three months ended March 31, 2023. The Bank had no borrowings as of March 31, 2023. As a percentage of total funding sources, core customer funding sources, as defined in the deposit detail table included with this release, increased from 80.9% for the three months ended December 31, 2022 to 81.1% for the three months ended March 31, 2023. The Company prides itself on its strong customer relationships and providing our customers access to decision makers. |
| --- | --- |
| ● | Strong Liquidity Position – The Company’s liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $852.6 million as of March 31, 2023. On March 12, 2023, the Federal Reserve made available the Bank Term Funding Program (“BTFP”) which enhances the ability of banks to borrow greater amounts against certain high-quality, unencumbered investments. To date, while the Company has been approved to participate in the BTFP, we have chosen not to do so. If the Company were to avail itself of the BTFP, we estimate an incremental increase in our liquidity position of approximately $35.2 million, increasing our potential liquidity to $887.8 million as of March 31, 2023. As of March 31, 2023, the Company had only 36% of deposits that were not insured or not collateralized by securities. The Company’s liquidity position meaningfully exceeds uninsured deposits as of March 31, 2023. |
| --- | --- |
| ● | Well-Capitalized with Significant Loss Absorption Capability – The Bank’s capital ratios remain well above regulatory thresholds for well-capitalized banks. As of March 31, 2023, the Bank’s regulatory capital ratios exceeded those as of December 31, 2022 and March 31, 2022. While current regulatory accounting principles do not require us to reflect unrealized losses on our fixed income securities, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at March 31, 2023 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and the 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 United States generally accepted accounting principles (“GAAP”). |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bank Regulatory Capital Ratios (As Reported) | |||||||||||||
| | | | Well-Capitalized Threshold | | | March 31, 2023 | | | December 31, 2022 | | | March 31, 2022 | |
| Total risk-based capital ratio | | | 10.0 | % | | 16.1 | % | | 15.6 | % | | 15.4 | % |
| Tier 1 risk-based capital ratio | | | 8.0 | % | | 14.9 | % | | 14.4 | % | | 14.2 | % |
| Common equity tier 1 ratio | | | 6.5 | % | | 14.9 | % | | 14.4 | % | | 14.2 | % |
| Leverage ratio | | | 5.0 | % | | 11.5 | % | | 11.3 | % | | 10.8 | % |
1
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bank Regulatory Capital Ratios (Hypothetical Scenario of Selling All Bonds at Fair Market Value - Non-GAAP) | |||||||||||||
| | | | Well-Capitalized Threshold | | | March 31, 2023 | | | December 31, 2022 | | | March 31, 2022 | |
| Total risk-based capital ratio | | | 10.0 | % | | 14.6 | % | | 13.8 | % | | 14.9 | % |
| Tier 1 risk-based capital ratio | | | 8.0 | % | | 13.3 | % | | 12.6 | % | | 13.6 | % |
| Common equity tier 1 ratio | | | 6.5 | % | | 13.3 | % | | 12.6 | % | | 13.6 | % |
| Leverage ratio | | | 5.0 | % | | 12.3 | % | | 11.8 | % | | 12.0 | % |
Chris Bergstrom, President and Chief Executive Officer, commented, “The first quarter of 2023 marked a period of significant change for the banking industry primarily resulting from the failures of two banks with business models not remotely similar to ours. John Marshall Bank has a long history of financial strength with a conservative operating philosophy. We believe our balance sheet is well-positioned. Our asset quality remains excellent with no nonperforming loans, no other real estate owned, and no loans 15 days or more past due at the end of the quarter. Our quarter-end liquidity position represents over 113% of our uninsured or uncollateralized deposits or 117% if we elect to use the Federal Reserve’s Bank Term Funding Program. The Bank has no borrowings and our core funding percentage improved during arguably one of the most significant deposit shifts in modern American banking history. Our securities portfolio has a relatively short average life and is of exceptionally high-quality. Only $12 million of our bond portfolio is not covered by the implied guarantee of the United States government or one of its agencies and is largely comprised of high-quality Virginia and Maryland municipal bonds rated AA or better. Our capital position is significantly robust as of March 31, 2023. If our regulators compelled us to recognize our unrealized investment portfolio losses in our regulatory capital, we would remain well above regulatory thresholds for well-capitalized banks. The John Marshall Bank team remains prepared to assist existing and new customers in our market area with our competitive financial products and services focused around relationship banking, while providing continued access to the Bank’s decision makers. We are at the ready to continue to assist businesses and individuals where needed and when appropriate.”
Balance Sheet, Liquidity and Credit Quality
Total assets were $2.35 billion at March 31, 2023, $2.35 billion at December 31, 2022, and $2.25 billion at March 31, 2022. Asset growth from March 31, 2022 to March 31, 2023 was $101.7 million or 4.5%.
Total loans, net of unearned income, increased by 8.6% to $1.77 billion at March 31, 2023, compared to $1.63 billion at March 31, 2022. The increase in loans was primarily attributable to growth in the investor real estate, residential mortgage, and commercial owner-occupied real estate loan portfolios.
Total loans, net of unearned income, decreased $18.2 million during the quarter ended March 31, 2023 or 1.0% from $1.79 billion at December 31, 2022. The decrease in loans was primarily attributable to loan pay downs and payoffs exceeding originations in the construction and development, commercial business, and commercial owner occupied real estate loan portfolios. The Company continues to maintain its disciplined underwriting standards while prudently pursuing loan growth that provides acceptable risk-adjusted returns.
The carrying value of the Company’s fixed income securities investment portfolio was $438.7 million at March 31, 2023, $457.0 million at December 31, 2022, and $402.3 million at March 31, 2022. Only $12 million or 2.7% of our bond portfolio is not covered by the implied guarantee of the United States government or one of its agencies and is largely comprised of high-quality Virginia and Maryland municipal bonds rated AA or better. Nearly 70% of the fixed income portfolio is invested in amortizing bonds, which provides the Company with a source of steady cash flow. At March 31, 2023, the fixed income portfolio had an estimated weighted average life of 4.4 years. The available-for-sale portfolio comprises approximately 79% of the fixed income securities portfolio and had a weighted average life of 3.7 years. The held-to-maturity portfolio comprises approximately 21% of the fixed income securities portfolio and had a weighted average life of 7.2 years.
During the three months ended March 31, 2023, the Company sold $12.0 million of available-for-sale securities resulting in a pre-tax loss of $202 thousand. The sales were executed to manage the Company’s interest rate risk position, allow for the reinvestment of proceeds into higher yielding assets and as a risk management strategy to reduce the Company’s exposure to municipalities. The Company did not purchase any fixed income securities during the three months ended March 31, 2023. 2
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 $852.6 million as of March 31, 2023 compared to $763.5 million as of December 31, 2022 and represented 36.3% and 32.5% of total assets, respectively.
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Liquidity Trends | |||||||||||||||||||||
| | | | March 31, 2023 | | | December 31, 2022 | | | September 30, 2022 | | | June 30, 2022 | | | March 31, 2022 | | |||||
| | | | Amount | % of Assets | | | Amount | % of Assets | | | Amount | % of Assets | | | Amount | % of Assets | | | Amount | % of Assets | |
| Cash | | $ | 103,359 | 4.4 | % | $ | 61,599 | 2.6 | % | $ | 74,756 | 3.2 | % | $ | 120,887 | 5.2 | % | $ | 182,361 | 8.1 | % |
| Unencumbered Securities | | | 298,194 | 12.7 | % | | 313,618 | 13.4 | % | | 345,987 | 15.0 | % | | 351,675 | 15.2 | % | | 294,081 | 13.1 | % |
| Available Secured Borrowing Capacity | | | 451,008 | 19.2 | % | | 388,257 | 16.5 | % | | 401,828 | 17.4 | % | | 402,840 | 17.4 | % | | 388,408 | 17.3 | % |
| Total Liquidity | | $ | 852,561 | 36.3 | % | $ | 763,474 | 32.5 | % | $ | 822,571 | 35.6 | % | $ | 875,402 | 37.8 | % | $ | 864,850 | 38.5 | % |
If the Company were to avail itself of the BTFP, we estimate an incremental increase in our liquidity position of approximately $35.2 million, increasing our potential liquidity to $887.8 million as of March 31, 2023. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at March 31, 2023.
Total deposits were $2.09 billion at March 31, 2023, $2.07 billion at December 31, 2022, and $1.98 billion at March 31, 2022. Deposits increased $20.9 million or 1.0%, when compared to December 31, 2022 and 5.3% when compared to March 31, 2022. The increase in deposits was primarily due to time deposit growth. As of March 31, 2023, the Company had $756.0 million of deposits that were not insured or not collateralized by securities, which represented only 36.2% of total deposits.
Total borrowings decreased by $25.5 million or 50.8% to $24.6 million at March 31, 2023 compared to $50.1 million at December 31, 2022 due to the repayment of $25.5 million in federal funds purchased. Total borrowings decreased $18.2 million or 42.5% when compared to March 31, 2022 primarily due to Federal Home Loan Bank (“FHLB”) advances that were called. The Company did not have any FHLB advances or federal funds purchased outstanding as of March 31, 2023.
Shareholders’ equity increased $15.9 million or 7.8% to $220.8 million at March 31, 2023 compared to $204.9 million at March 31, 2022. Book value per share was $15.63 as of March 31, 2023 compared to $14.68 as of March 31, 2022. The year-over-year change in book value per share was primarily due to the Company’s earnings over the previous twelve months, partially offset by an increase in accumulated other comprehensive loss, increased share count from shareholder option exercises and restricted share award issuances. The increase in accumulated other comprehensive loss was primarily attributable to increases in unrealized losses on our available-for-sale investment portfolio due to market value changes as a result of rising interest rates.
The Bank’s capital ratios at March 31, 2023 increased when compared to both the periods ended December 31, 2022 and March 31, 2022. We remain well above regulatory thresholds for well-capitalized banks. As of March 31, 2023, the Bank’s total risk-based capital ratio was 16.1%, compared to 15.4% at March 31, 2022.
The Company recorded no net charge-offs during the first quarter of 2023, no net charge-offs during the fourth quarter of 2022 and $1 thousand in net charge-offs during the first quarter of 2022. As of March 31, 2023, the Company had no non-accrual loans, no loans 15 days or more past due, and no other real estate owned assets.
At March 31, 2023, the allowance for loan credit losses was $21.6 million or 1.22% of outstanding loans, net of unearned income, compared to $20.2 million or 1.13% of outstanding loans, net of unearned income, at December 31, 2022. The increase in the allowance as a percentage of outstanding loans, net of unearned income, was primarily a result of the Company recognizing an incremental allowance upon adoption of the current expected credit losses (“CECL”) standard on January 1, 2023. The Company previously accounted for its allowance for loan losses under the incurred loss model.
At March 31, 2023, the allowance for credit losses on unfunded loan commitments was $1.0 million compared to $303 thousand at December 31, 2022. The increase in the allowance for credit losses on unfunded loan commitments was primarily the result of the Company’s adoption of the CECL standard on January 1, 2023. The Company previously accounted for its allowance for unfunded loan commitments under the incurred loss model.
The Company did not have an allowance for credit losses on held-to-maturity securities as of March 31, 2023 or upon adoption of CECL.
3
Income Statement Review
Net income for the first quarter of 2023 decreased $1.4 million or 17.9% to $6.3 million compared to $7.7 million for the first quarter of 2022. Earnings per diluted share for the three months ended March 31, 2023 were $0.44, a 20.0% decrease when compared to the $0.55 reported for the three months ended March 31, 2022.
Net interest income for the first quarter of 2023 decreased $3.5 million or 19.2% compared to the first quarter of 2022, driven primarily by the increase in the costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.15% for the first quarter of 2023 compared to 3.68% for the same period in 2022. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and investment portfolios and deposits in banks as a result of increases in interest rates subsequent to the first quarter of 2022. The cost of interest-bearing liabilities was 2.25% for the first quarter of 2023 compared to 0.49% for the same quarter of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to a 1.81% 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 first quarter of 2022. The annualized net interest margin for the fourth quarter of 2022 was 2.57% as compared to 3.34% for the same quarter of 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 $774 thousand release of provision for credit losses for the first quarter of 2023 compared to no provision for the first quarter of 2022. The release of provision for credit losses during the first quarter of 2023 was due to an $18.2 million decrease in gross loan balances and changes in qualitative factors in the CECL model.
Non-interest income increased $152 thousand or 36.7% during the first quarter of 2023 compared to the first quarter of 2022 (GAAP). The increase in non-interest income was primarily due to an increase of $206 thousand as a result of mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan. The Company also recognized customer interest rate swap fee income of $91 thousand, and increases in interchange and other fees as a result of higher customer activity and penalty fee income earned on the early withdrawal of certificates of deposit, respectively. These increases were partially offset by losses of $202 thousand recognized on the sale of $12.0 million of investment securities during the quarter. The sales were executed to manage the Company’s interest rate risk position, allow for the reinvestment of proceeds into higher yielding assets and as a risk management strategy to reduce the Company’s exposure to municipalities. Excluding mark-to-market adjustments on nonqualified deferred compensation plan investments and the loss on securities sold, non-interest income increased $149 thousand or 27.9% when compared to the same period in 2022 (Non-GAAP).
Non-interest expense decreased $1.0 million or 11.6% for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The decrease in non-interest expense was primarily due to decreases in salaries and employee benefits expense, professional fees, occupancy expense of premises, and furniture and equipment expense. The decrease in salaries and employee benefits was primarily due to a reduction in incentive compensation accruals when compared to the prior year quarter. 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. The decrease in professional fees was due to non-recurring professional fees incurred in the first quarter of 2022 as part of our registration with the Securities and Exchange Commission and timing of projects. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The decrease in non-interest expense was partially offset by increases in FDIC insurance expense, franchise tax expense, and director compensation expense. The increase in FDIC insurance expense was attributable to the FDIC increasing the base assessment rate for all insured depository institutions. The increase in franchise tax expense was due to an increase in the Bank’s equity as that is the basis the Commonwealth of Virginia uses to assess taxes on banking institutions. The increase in director compensation expense was due to the accelerated vesting of restricted stock awards as a result of the death of a director during the first quarter of 2023.
For the three months ended March 31, 2023, annualized non-interest expense to average assets was 1.35% compared to 1.61% for the three months ended March 31, 2022. The decrease was primarily due to lower salaries and employee benefit expense coupled with continued cost consciousness. 4
For the three months ended March 31, 2023, the annualized efficiency ratio was 51.7% compared to 47.9% for the three months ended March 31, 2022. The increase was primarily due to a decrease in net interest income, which was partially offset by an increase in non-interest income and a decrease in non-interest expense.
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 the impact of unrealized losses on the Company’s bond portfolio on the Bank’s regulatory capital ratios and period-to-period operating performance, respectively. 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:
| ● | The impact to the Bank’s regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and the losses realized. |
|---|---|
| ● | Non-interest income excluding the impact of mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan and losses recognized on the sale of available-for-sale securities. |
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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 $2.35 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. 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 credit losses; 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 5
enhancements or services; increased competition with other financial institutions and fintech companies; adverse changes in the securities markets; changes in the financial condition or future prospects of issuers of securities that we own; our ability to maintain an effective risk management framework; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; compliance with legislative or regulatory requirements; results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take similar actions; potential claims, damages, and fines related to litigation or government actions; the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts (such as the ongoing war between Russia and Ukraine) or public health events (such as COVID-19), 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.
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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 | | ||||
| | | | March 31, | | |||
| | 2023 | **** | 2022 | **** | |||
| Selected Balance Sheet Data | | | | | | | |
| Cash and cash equivalents | | $ | 103,359 | | $ | 182,361 | |
| Total investment securities | | | 445,785 | | | 409,692 | |
| Loans, net of unearned income | | | 1,771,272 | | | 1,631,260 | |
| Allowance for loan credit losses | | | 21,619 | | | 20,031 | |
| Total assets | | | 2,351,307 | | | 2,249,609 | |
| Non-interest bearing demand deposits | | | 447,450 | | | 495,811 | |
| Interest bearing deposits | | | 1,641,192 | | | 1,487,288 | |
| Total deposits | | | 2,088,642 | | | 1,983,099 | |
| Federal funds purchased | | | - - | | | - - | |
| Federal Home Loan Bank advances | | | - - | | | 18,000 | |
| Shareholders' equity | | | 220,823 | | | 204,855 | |
| | | | | | | | |
| Summary Results of Operations | | | | | | | |
| Interest income | | $ | 23,453 | | $ | 19,745 | |
| Interest expense | | | 8,984 | | | 1,829 | |
| Net interest income | | | 14,469 | | | 17,916 | |
| Provision for (recovery of) credit losses | | | (774) | | | - - | |
| Net interest income after provision for (recovery of) credit losses | | | 15,243 | | | 17,916 | |
| Non-interest income | | | 566 | | | 414 | |
| Non-interest expense | | | 7,770 | | | 8,786 | |
| Income before income taxes | | | 8,039 | | | 9,544 | |
| Net income | | | 6,304 | | | 7,674 | |
| | | | | | | | |
| Per Share Data and Shares Outstanding | | | | | | | |
| Earnings per share - basic | | $ | 0.45 | | $ | 0.55 | |
| Earnings per share - diluted | | $ | 0.44 | | $ | 0.55 | |
| Book value per share | | $ | 15.63 | | $ | 14.68 | |
| Weighted average common shares (basic) | | | 14,067,047 | | | 13,783,034 | |
| Weighted average common shares (diluted) | | | 14,156,724 | | | 13,991,692 | |
| Common shares outstanding at end of period | | | 14,125,208 | | | 13,950,570 | |
| | | | | | | | |
| Performance Ratios | | | | | | | |
| Return on average assets (annualized) | | | 1.10 | % | | 1.40 | % |
| Return on average equity (annualized) | | | 11.83 | % | | 14.76 | % |
| Net interest margin | | | 2.57 | % | | 3.34 | % |
| Non-interest income as a percentage of average assets (annualized) | | | 0.10 | % | | 0.08 | % |
| Non-interest expense to average assets (annualized) | | | 1.35 | % | | 1.61 | % |
| Efficiency ratio | | | 51.7 | % | | 47.9 | % |
| | | | | | | | |
| Asset Quality | | | | | | | |
| Non-performing assets to total assets | | | 0.00 | % | | 0.00 | % |
| Non-performing loans to total loans | | | 0.00 | % | | 0.00 | % |
| Allowance for loan credit losses to non-performing loans | | | N/M | | | N/M | |
| Allowance for loan credit losses to total loans | | | 1.22 | % | | 1.23 | % |
| Net charge-offs (recoveries) to average loans (annualized) | | | 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 | | | 10.3 | % | | 10.2 | % |
| Total risk-based capital ratio | | | 16.1 | % | | 15.4 | % |
| Tier 1 risk-based capital ratio | | | 14.9 | % | | 14.2 | % |
| Common equity tier 1 ratio | | | 14.9 | % | | 14.2 | % |
| Leverage ratio | | | 11.5 | % | | 10.8 | % |
| | | | | | | | |
| Other Information | | | | | | | |
| Number of full time equivalent employees | | | 142 | | | 141 | |
| # Full service branch offices | | | 8 | | | 8 | |
| # Loan production or limited service branch offices | | | 1 | | | 1 | |
| (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. |
|---|
7
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | |||||||||||||||
| | | | | | | | | | | | | | | | |
| Consolidated Balance Sheets | |||||||||||||||
| (Dollar amounts in thousands, except per share data) | |||||||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | % Change | ||||
| | | March 31, | | December 31, | | March 31, | | Last Three | | Year Over | |||||
| | 2023 | **** | 2022 | | 2022 | Months | | Year | |||||||
| Assets | | (Unaudited) | | * | | (Unaudited) | | | | | |||||
| Cash and due from banks | | $ | 8,012 | | $ | 6,583 | | $ | 6,189 | | 21.7 | % | | 29.5 | % |
| Interest-bearing deposits in banks | | | 95,347 | | | 55,016 | | | 176,172 | | 73.3 | % | | (45.9) | % |
| Securities available-for-sale, at fair value | | | 340,159 | | | 357,576 | | | 298,103 | | (4.9) | % | | 14.1 | % |
| Securities held-to-maturity, fair value of $81,966, $81,161, and $95,051 at 3/31/2023, 12/31/2022, and 3/31/2022, respectively. | | | 98,507 | | | 99,415 | | | 104,177 | | (0.9) | % | | (5.4) | % |
| Restricted securities, at cost | | | 4,529 | | | 4,425 | | | 5,088 | | 2.4 | % | | (11.0) | % |
| Equity securities, at fair value | | | 2,590 | | | 2,115 | | | 2,324 | | 22.5 | % | | 11.4 | % |
| Loans, net of unearned income | | | 1,771,272 | | | 1,789,508 | | | 1,631,260 | | (1.0) | % | | 8.6 | % |
| Allowance for credit losses | | | (21,619) | | | (20,208) | | | (20,031) | | 7.0 | % | | 7.9 | % |
| Net loans | | | 1,749,653 | | | 1,769,300 | | | 1,611,229 | | (1.1) | % | | 8.6 | % |
| Bank premises and equipment, net | | | 1,451 | | | 1,219 | | | 1,532 | | 19.0 | % | | (5.3) | % |
| Accrued interest receivable | | | 5,471 | | | 5,531 | | | 4,354 | | (1.1) | % | | 25.7 | % |
| Bank owned life insurance | | | 21,270 | | | 21,170 | | | 21,093 | | 0.5 | % | | 0.8 | % |
| Right of use assets | | | 4,767 | | | 4,611 | | | 4,567 | | 3.4 | % | | 4.4 | % |
| Other assets | | | 19,551 | | | 21,274 | | | 14,781 | | (8.1) | % | | 32.3 | % |
| Total assets | | $ | 2,351,307 | | $ | 2,348,235 | | $ | 2,249,609 | | 0.1 | % | | 4.5 | % |
| | | | | | | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 447,450 | | $ | 476,697 | | $ | 495,811 | | (6.1) | % | | (9.8) | % |
| Interest-bearing demand deposits | | | 677,834 | | | 691,945 | | | 760,074 | | (2.0) | % | | (10.8) | % |
| Savings deposits | | | 81,150 | | | 95,241 | | | 114,427 | | (14.8) | % | | (29.1) | % |
| Time deposits | | | 882,208 | | | 803,857 | | | 612,787 | | 9.7 | % | | 44.0 | % |
| Total deposits | | | 2,088,642 | | | 2,067,740 | | | 1,983,099 | | 1.0 | % | | 5.3 | % |
| Federal funds purchased | | | - - | | | 25,500 | | | - - | | N/M | | | N/M | |
| Federal Home Loan Bank advances | | | - - | | | - - | | | 18,000 | | N/M | | | N/M | |
| Subordinated debt, net | | | 24,645 | | | 24,624 | | | 24,845 | | 0.1 | % | | (0.8) | % |
| Accrued interest payable | | | 972 | | | 1,035 | | | 477 | | (6.1) | % | | 103.8 | % |
| Lease liabilities | | | 5,039 | | | 4,858 | | | 4,830 | | 3.7 | % | | 4.3 | % |
| Dividend payable | | | - - | | | - - | | | 2,790 | | | | | | |
| Other liabilities | | | 11,186 | | | 11,678 | | | 10,713 | | (4.2) | % | | 4.4 | % |
| Total liabilities | | | 2,130,484 | | | 2,135,435 | | | 2,044,754 | | (0.2) | % | | 4.2 | % |
| | | | | | | | | | | | | | | | |
| 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, 14,125,208 at 3/31/2023 including 48,401 unvested shares, 14,098,986 at 12/31/2022 including 55,185 unvested shares, and 13,950,570 at 3/31/2022, including 60,366 unvested shares | | | 141 | | | 141 | | | 139 | | - - | % | | 1.4 | % |
| Additional paid-in capital | | | 95,235 | | | 94,726 | | | 93,135 | | 0.5 | % | | 2.3 | % |
| Retained earnings | | | 150,642 | | | 146,630 | | | 122,510 | | 2.7 | % | | 23.0 | % |
| Accumulated other comprehensive loss | | | (25,195) | | | (28,697) | | | (10,929) | | (12.2) | % | | 130.5 | % |
| Total shareholders' equity | | | 220,823 | | | 212,800 | | | 204,855 | | 3.8 | % | | 7.8 | % |
| Total liabilities and shareholders' equity | | $ | 2,351,307 | | $ | 2,348,235 | | $ | 2,249,609 | | 0.1 | % | | 4.5 | % |
* Derived from audited consolidated financial statements.
8
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | |||||||||
| | | | | | | | | | |
| Consolidated Statements of Income | |||||||||
| (Dollar amounts in thousands, except per share data) | |||||||||
| | | | | | | | | | |
| | | Three Months Ended | | | | ||||
| | | March 31, | | | | ||||
| | 2023 | **** | 2022 | **** | % Change | ||||
| | | (Unaudited) | | (Unaudited) | | | **** | ||
| Interest and Dividend Income | | | | | | | | | |
| Interest and fees on loans | | $ | 20,425 | | $ | 18,184 | | 12.3 | % |
| Interest on investment securities, taxable | | | 2,251 | | | 1,380 | | 63.1 | % |
| Interest on investment securities, tax-exempt | | | 19 | | | 30 | | (36.7) | % |
| Dividends | | | 75 | | | 60 | | 25.0 | % |
| Interest on deposits in other banks | | | 683 | | | 91 | | N/M | |
| Total interest and dividend income | | | 23,453 | | | 19,745 | | 18.8 | % |
| | | | | | | | | | |
| Interest Expense | | | | | | | | | |
| Deposits | | | 8,559 | | | 1,323 | | N/M | |
| Federal funds purchased | | | 9 | | | - - | | N/M | |
| Federal Home Loan Bank advances | | | 67 | | | 30 | | 123.3 | % |
| Subordinated debt | | | 349 | | | 476 | | (26.7) | % |
| Total interest expense | | | 8,984 | | | 1,829 | | 391.2 | % |
| | | | | | | | | | |
| Net interest income | | | 14,469 | | | 17,916 | | (19.2) | % |
| | | | | | | | | | |
| Provision for (recovery of) Credit Losses | | | (774) | | | - - | | N/M | |
| | | | | | | | | | |
| Net interest income after provision for (recovery of) credit losses | | | 15,243 | | | 17,916 | | (14.9) | % |
| | | | | | | | | | |
| Non-interest Income | | | | | | | | | |
| Service charges on deposit accounts | | | 72 | | | 77 | | (6.5) | % |
| Bank owned life insurance | | | 100 | | | 95 | | 5.3 | % |
| Other service charges and fees | | | 203 | | | 137 | | 48.2 | % |
| Losses on sale of available-for-sale securities | | | (202) | | | - - | | N/M | |
| Insurance commissions | | | 206 | | | 221 | | (6.8) | % |
| Other income (loss) | | | 187 | | | (116) | | N/M | |
| Total non-interest income | | | 566 | | | 414 | | 36.7 | % |
| | | | | | | | | | |
| Non-interest Expenses | | | | | | | | | |
| Salaries and employee benefits | | | 4,912 | | | 6,027 | | (18.5) | % |
| Occupancy expense of premises | | | 470 | | | 493 | | (4.7) | % |
| Furniture and equipment expenses | | | 296 | | | 325 | | (8.9) | % |
| Other expenses | | | 2,092 | | | 1,941 | | 7.8 | % |
| Total non-interest expenses | | | 7,770 | | | 8,786 | | (11.6) | % |
| | | | | | | | | | |
| Income before income taxes | | | 8,039 | | | 9,544 | | (15.8) | % |
| | | | | | | | | | |
| Income tax Expense | | | 1,735 | | | 1,870 | | (7.2) | % |
| | | | | | | | | | |
| Net income | | $ | 6,304 | | $ | 7,674 | | (17.9) | % |
| | | | | | | | | | |
| Earnings Per Share | | | | | | | | | |
| Basic | | $ | 0.45 | | $ | 0.55 | | (18.2) | % |
| Diluted | | $ | 0.44 | | $ | 0.55 | | (20.0) | % |
9
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
| Historical Trends - Quarterly Financial Data (Unaudited) | ||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
| | | 2023 | | 2022 | | |||||||||||
| | **** | March 31 | | December 31 | | September 30 | | June 30 | **** | March 31 | **** | |||||
| Profitability for the Quarter: | | | | | | | | | | | | | | | | |
| Interest income | | $ | 23,453 | | $ | 23,557 | | $ | 21,208 | | $ | 19,555 | | $ | 19,745 | |
| Interest expense | | | 8,984 | | | 6,052 | | | 3,516 | | | 2,247 | | | 1,829 | |
| Net interest income | | | 14,469 | | | 17,505 | | | 17,692 | | | 17,308 | | | 17,916 | |
| Provision for (recovery of) credit losses | | | (774) | | | 175 | | | - - | | | - - | | | - - | |
| Non-interest income | | | 566 | | | 718 | | | 450 | | | 109 | | | 414 | |
| Non-interest expenses | | | 7,770 | | | 7,449 | | | 7,958 | | | 7,681 | | | 8,786 | |
| Income before income taxes | | | 8,039 | | | 10,599 | | | 10,184 | | | 9,736 | | | 9,544 | |
| Income tax expense | | | 1,735 | | | 2,397 | | | 2,139 | | | 1,854 | | | 1,870 | |
| Net income | | $ | 6,304 | | $ | 8,202 | | $ | 8,045 | | $ | 7,882 | | $ | 7,674 | |
| | | | | | | | | | | | | | | | | |
| Financial Performance: | | | | | | | | | | | | | | | | |
| Return on average assets (annualized) | | | 1.10 | % | | 1.40 | % | | 1.38 | % | | 1.41 | % | | 1.40 | % |
| Return on average equity (annualized) | | | 11.83 | % | | 15.65 | % | | 15.07 | % | | 15.28 | % | | 14.76 | % |
| Net interest margin | | | 2.57 | % | | 3.05 | % | | 3.10 | % | | 3.16 | % | | 3.34 | % |
| Non-interest income as a percentage of average assets (annualized) | | | 0.10 | % | | 0.12 | % | | 0.08 | % | | 0.02 | % | | 0.08 | % |
| Non-interest expense to average assets (annualized) | | | 1.35 | % | | 1.27 | % | | 1.36 | % | | 1.38 | % | | 1.61 | % |
| Efficiency ratio | | | 51.7 | % | | 40.9 | % | | 43.9 | % | | 44.1 | % | | 47.9 | % |
| | | | | | | | | | | | | | | | | |
| Per Share Data: | | | | | | | | | | | | | | | | |
| Earnings per share - basic | | $ | 0.45 | | $ | 0.58 | | $ | 0.57 | | $ | 0.56 | | $ | 0.55 | |
| Earnings per share - diluted | | $ | 0.44 | | $ | 0.58 | | $ | 0.57 | | $ | 0.56 | | $ | 0.55 | |
| Book value per share | | $ | 15.63 | | $ | 15.09 | | $ | 14.37 | | $ | 14.80 | | $ | 14.68 | |
| Dividends declared per share | | $ | - - | | $ | - - | | $ | - - | | $ | - - | | $ | 0.20 | |
| Weighted average common shares (basic) | | | 14,067,047 | | | 14,019,429 | | | 13,989,414 | | | 13,932,256 | | | 13,783,034 | |
| Weighted average common shares (diluted) | | | 14,156,724 | | | 14,131,352 | | | 14,108,286 | | | 14,085,160 | | | 13,991,692 | |
| Common shares outstanding at end of period | | | 14,125,208 | | | 14,098,986 | | | 14,070,080 | | | 14,026,589 | | | 13,950,570 | |
| | | | | | | | | | | | | | | | | |
| Non-interest Income: | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | $ | 72 | | $ | 84 | | $ | 79 | | $ | 84 | | $ | 77 | |
| Bank owned life insurance | | | 100 | | | 99 | | | 255 | | | 95 | | | 95 | |
| Other service charges and fees | | | 203 | | | 187 | | | 175 | | | 157 | | | 137 | |
| Losses on securities | | | (202) | | | - - | | | - - | | | - - | | | - - | |
| Insurance commissions | | | 206 | | | 70 | | | 47 | | | 44 | | | 221 | |
| Other income (loss) | | | 187 | | | 278 | | | (106) | | | (271) | | | (116) | |
| Total non-interest income | | $ | 566 | | $ | 718 | | $ | 450 | | $ | 109 | | $ | 414 | |
| | | | | | | | | | | | | | | | | |
| Non-interest Expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 4,912 | | $ | 4,436 | | $ | 5,072 | | $ | 4,655 | | $ | 6,027 | |
| Occupancy expense of premises | | | 470 | | | 458 | | | 461 | | | 482 | | | 493 | |
| Furniture and equipment expenses | | | 296 | | | 336 | | | 323 | | | 341 | | | 325 | |
| Other expenses | | | 2,092 | | | 2,219 | | | 2,102 | | | 2,203 | | | 1,941 | |
| Total non-interest expenses | | $ | 7,770 | | $ | 7,449 | | $ | 7,958 | | $ | 7,681 | | $ | 8,786 | |
| | | | | | | | | | | | | | | | | |
| Balance Sheets at Quarter End: | | | | | | | | | | | | | | | | |
| Total loans | | $ | 1,771,272 | | $ | 1,789,508 | | $ | 1,725,114 | | $ | 1,692,652 | | $ | 1,631,260 | |
| Allowance for loan credit losses | | | (21,619) | | | (20,208) | | | (20,032) | | | (20,031) | | | (20,031) | |
| Investment securities | | | 445,785 | | | 463,531 | | | 473,478 | | | 473,914 | | | 409,692 | |
| Interest-earning assets | | | 2,312,404 | | | 2,308,055 | | | 2,258,822 | | | 2,274,968 | | | 2,217,553 | |
| Total assets | | | 2,351,307 | | | 2,348,235 | | | 2,305,540 | | | 2,316,374 | | | 2,249,609 | |
| Total deposits | | | 2,088,642 | | | 2,067,740 | | | 2,063,341 | | | 2,043,741 | | | 1,983,099 | |
| Total interest-bearing liabilities | | | 1,665,837 | | | 1,641,167 | | | 1,552,758 | | | 1,581,017 | | | 1,530,133 | |
| Total shareholders' equity | | | 220,823 | | | 212,800 | | | 202,212 | | | 207,530 | | | 204,855 | |
| | | | | | | | | | | | | | | | | |
| Quarterly Average Balance Sheets: | | | | | | | | | | | | | | | | |
| Total loans | | $ | 1,772,922 | | $ | 1,759,747 | | $ | 1,684,796 | | $ | 1,641,914 | | $ | 1,620,533 | |
| Allowance for loan credit losses | | | (21,481) | | | (20,042) | | | (20,032) | | | (20,031) | | | (20,032) | |
| Investment securities | | | 463,254 | | | 468,956 | | | 488,860 | | | 447,688 | | | 376,608 | |
| Interest-earning assets | | | 2,295,677 | | | 2,289,061 | | | 2,277,325 | | | 2,204,709 | | | 2,183,897 | |
| Total assets | | | 2,334,695 | | | 2,330,307 | | | 2,314,825 | | | 2,240,119 | | | 2,216,131 | |
| Total deposits | | | 2,066,139 | | | 2,079,161 | | | 2,057,640 | | | 1,980,231 | | | 1,946,882 | |
| Total interest-bearing liabilities | | | 1,621,131 | | | 1,566,902 | | | 1,547,766 | | | 1,504,574 | | | 1,505,854 | |
| Total shareholders' equity | | | 220,282 | | | 207,906 | | | 212,147 | | | 206,967 | | | 210,900 | |
| | | | | | | | | | | | | | | | | |
| Financial Measures: | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 9.4 | % | | 8.9 | % | | 9.2 | % | | 9.2 | % | | 9.5 | % |
| Investment securities to earning assets | | | 19.3 | % | | 20.1 | % | | 21.0 | % | | 20.8 | % | | 18.5 | % |
| Loans to earning assets | | | 76.6 | % | | 77.5 | % | | 76.4 | % | | 74.4 | % | | 73.6 | % |
| Loans to assets | | | 75.3 | % | | 76.2 | % | | 74.8 | % | | 73.1 | % | | 72.5 | % |
| Loans to deposits | | | 84.8 | % | | 86.5 | % | | 83.6 | % | | 82.8 | % | | 82.3 | % |
| | | | | | | | | | | | | | | | | |
| Capital Ratios (Bank Level): | | | | | | | | | | | | | | | | |
| Equity / assets | | | 10.3 | % | | 10.0 | % | | 9.7 | % | | 9.9 | % | | 10.2 | % |
| Total risk-based capital ratio | | | 16.1 | % | | 15.6 | % | | 15.4 | % | | 15.1 | % | | 15.4 | % |
| Tier 1 risk-based capital ratio | | | 14.9 | % | | 14.4 | % | | 14.3 | % | | 14.0 | % | | 14.2 | % |
| Common equity tier 1 ratio | | | 14.9 | % | | 14.4 | % | | 14.3 | % | | 14.0 | % | | 14.2 | % |
| Leverage ratio | | | 11.5 | % | | 11.3 | % | | 11.0 | % | | 11.0 | % | | 10.8 | % |
10
| | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | |||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| Loan, Deposit and Borrowing Detail (Unaudited) | |||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2022 | | ||||||||||||
| | | 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 | **** | |
| Commercial business loans | | 2.3 | % | | 2.5 | % | 2.6 | % | 2.8 | % | 3.2 | % | |||||
| Commercial PPP loans | | | 0.0 | % | | | 0.0 | % | | 0.0 | % | | 0.0 | % | | 0.5 | % |
| Commercial owner-occupied real estate loans | | | 20.6 | % | | | 20.5 | % | | 21.1 | % | | 22.4 | % | | 20.9 | % |
| Total business loans | | | 22.9 | % | | | 23.0 | % | | 23.7 | % | | 25.2 | % | | 24.6 | % |
| | | | | | | | | | | | | | | | | | |
| Investor real estate loans | | | 37.4 | % | | | 37.1 | % | | 36.1 | % | | 35.5 | % | | 34.0 | % |
| Construction & development loans | | | 10.2 | % | | | 11.0 | % | | 11.6 | % | | 11.2 | % | | 13.4 | % |
| Multi-family loans | | | 5.0 | % | | | 5.0 | % | | 6.2 | % | | 6.3 | % | | 6.1 | % |
| Total commercial real estate loans | | | 52.6 | % | | | 53.1 | % | | 53.9 | % | | 53.0 | % | | 53.5 | % |
| | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | 24.5 | % | | | 23.9 | % | | 22.4 | % | | 21.8 | % | | 21.9 | % |
| Consumer loans | | | 0.0 | % | | | 0.0 | % | | 0.0 | % | | 0.0 | % | | 0.0 | % |
| Total loans | | 100.0 | % | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
| Less: Allowance for credit losses | | | | | | | | | | | | | | | | | |
| Net deferred loan costs (fees) | | | | | | | | | | | | | | | | | |
| Net loans | | | | | | | | | | | | | |||||
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2022 | | ||||||||||||
| | | March 31 | | | | | September 30 | | June 30 | | March 31 | | |||||
| Deposits | | Amount | % of Total | | | Amount | % of Total | | Amount | % of Total | | Amount | % of Total | | Amount | % of Total | |
| Non-interest bearing demand deposits | | 21.4 | % | | 23.1 | % | 25.9 | % | 25.1 | % | 25.0 | % | |||||
| Interest-bearing demand deposits: | | | | | | | | | | | | | | | | | |
| NOW accounts^(1)^ | | | 13.7 | % | | | 12.3 | % | | 14.2 | % | | 16.6 | % | | 17.4 | % |
| Money market accounts^(1)^ | | | 18.8 | % | | | 21.2 | % | | 20.0 | % | | 19.6 | % | | 20.9 | % |
| Savings accounts | | | 3.9 | % | | | 4.6 | % | | 5.0 | % | | 5.4 | % | | 5.8 | % |
| Certificates of deposit | | | | | | | | | | | | | | | | | |
| $250,000 or more | | | 16.2 | % | | | 15.2 | % | | 13.6 | % | | 12.5 | % | | 12.1 | % |
| Less than $250,000 | | | 4.5 | % | | | 4.3 | % | | 4.3 | % | | 4.3 | % | | 4.6 | % |
| QwickRate® certificates of deposit | | | 0.8 | % | | | 1.1 | % | | 1.0 | % | | 1.0 | % | | 1.2 | % |
| IntraFi® certificates of deposit | | | 2.5 | % | | | 1.2 | % | | 2.2 | % | | 1.6 | % | | 2.0 | % |
| Brokered deposits | | | 18.2 | % | | | 17.0 | % | | 13.8 | % | | 13.9 | % | | 11.0 | % |
| Total deposits | | 100.0 | % | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
| | | | | | | | | | | | | | | | | | |
| Borrowings | | | | | | | | | | | | | | | | | |
| Federal funds purchased | | 0.0 | % | | 50.9 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||
| Federal Home Loan Bank advances | | | 0.0 | % | | | - - | % | | - - | % | | - - | % | | 42.0 | % |
| Subordinated debt | | | 100.0 | % | | | 49.1 | % | | 100.0 | % | | 100.0 | % | | 58.0 | % |
| Total borrowings | | 100.0 | % | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
| | | | | | | | | | | | | | | | | | |
| Total deposits and borrowings | | | | | | | | | | | | | |||||
| | | | | | | | | | | | | | | | | | |
| Core customer funding sources ^(2)^ | | 81.1 | % | | 80.9 | % | 85.2 | % | 85.1 | % | 87.1 | % | |||||
| Wholesale funding sources ^(3)^ | | | 18.9 | % | | | 19.1 | % | | 14.8 | % | | 14.9 | % | | 12.9 | % |
| Total funding sources | | 100.0 | % | | 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. |
| --- | --- |
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| | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| Average Balance Sheets, Interest and Rates (unaudited) | | ||||||||||||||||
| (Dollar amounts in thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, 2023 | | Three Months Ended March 31, 2022 | |||||||||||||
| | **** | | | **** | Interest Income / | **** | Average | **** | | | **** | Interest Income / | **** | Average | **** | ||
| | | Average Balance | | Expense | | Rate | | Average Balance | | Expense | | Rate | **** | ||||
| Assets: | | | | | | ||||||||||||
| Securities: | | | | | | ||||||||||||
| Taxable | | $ | 459,817 | $ | 2,326 | 2.05 | % | $ | 371,602 | $ | 1,440 | 1.57 | % | ||||
| Tax-exempt^(1)^ | | 3,437 | | 24 | 2.83 | % | 5,006 | | 38 | 3.08 | % | ||||||
| Total securities | | $ | 463,254 | | $ | 2,350 | 2.06 | % | $ | 376,608 | | $ | 1,478 | 1.59 | % | ||
| Loans, net of unearned income^(2)^: | | | | | | | |||||||||||
| Taxable | | 1,744,347 | | 20,194 | 4.70 | % | 1,601,045 | | 18,029 | 4.57 | % | ||||||
| Tax-exempt^(1)^ | | 28,575 | | 292 | 4.14 | % | 19,488 | | 196 | 4.08 | % | ||||||
| Total loans, net of unearned income | | $ | 1,772,922 | | $ | 20,486 | 4.69 | % | $ | 1,620,533 | | $ | 18,225 | 4.56 | % | ||
| Interest-bearing deposits in other banks | | $ | 59,501 | | $ | 683 | 4.66 | % | $ | 186,756 | | $ | 91 | 0.20 | % | ||
| Total interest-earning assets | | $ | 2,295,677 | | $ | 23,519 | 4.15 | % | $ | 2,183,897 | | $ | 19,794 | 3.68 | % | ||
| Total non-interest earning assets | | 39,018 | | | | | 32,234 | | | ||||||||
| Total assets | | $ | 2,334,695 | | | | | $ | 2,216,131 | | | ||||||
| Liabilities & Shareholders’ Equity: | | | | | | ||||||||||||
| Interest-bearing deposits | | | | | | ||||||||||||
| NOW accounts | | $ | 258,492 | | $ | 762 | 1.20 | % | $ | 324,852 | | $ | 202 | 0.25 | % | ||
| Money market accounts | | 429,073 | | 2,475 | 2.34 | % | 392,389 | | | 350 | 0.36 | % | |||||
| Savings accounts | | 87,640 | | 245 | 1.13 | % | 108,375 | | | 88 | 0.33 | % | |||||
| Time deposits | | 814,472 | | 5,077 | 2.53 | % | 637,469 | | | 683 | 0.43 | % | |||||
| Total interest-bearing deposits | | $ | 1,589,677 | | $ | 8,559 | 2.18 | % | $ | 1,463,085 | | $ | 1,323 | 0.37 | % | ||
| Federal funds purchased | | | 789 | | | 9 | | 4.63 | % | | — | | | — | | 0.00 | % |
| Subordinated debt, net | | 24,632 | | 349 | 5.75 | % | 24,769 | | 476 | 7.79 | % | ||||||
| Other borrowed funds | | 6,033 | | 67 | 4.50 | % | 18,000 | | 30 | 0.68 | % | ||||||
| Total interest-bearing liabilities | | $ | 1,621,131 | | $ | 8,984 | 2.25 | % | $ | 1,505,854 | | $ | 1,829 | 0.49 | % | ||
| Demand deposits | | 476,462 | | | | | 483,797 | | | ||||||||
| Other liabilities | | 16,821 | | | | | 15,580 | | | ||||||||
| Total liabilities | | $ | 2,114,414 | | | | | $ | 2,005,231 | | | ||||||
| Shareholders’ equity | | $ | 220,282 | | | | | $ | 210,900 | | | ||||||
| Total liabilities and shareholders’ equity | | $ | 2,334,696 | | | | | $ | 2,216,131 | | | ||||||
| | | | | | | | | | | | | | | ||||
| Tax-equivalent net interest income and spread | | | | | $ | 14,535 | | 1.90 | % | | | | $ | 17,965 | | 3.19 | % |
| Less: tax-equivalent adjustment | | | | | | 66 | | | | | | | | 49 | | | |
| Net interest income | | | | | $ | 14,469 | | | | | | | $ | 17,916 | | | |
| | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income/earnings assets | | | | | | | | 4.15 | % | | | | | | | 3.68 | % |
| Interest expense/earning assets | | | | | | | | 1.58 | % | | | | | | | 0.34 | % |
| Net interest margin^(3)^ | | | | | | | | 2.57 | % | | | | | | | 3.34 | % |
| (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 $66 thousand and $49 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively. |
|---|---|
| (2) | The Company did not have any loans on non-accrual as of March 31, 2023 or March 31, 2022. |
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| (3) | The net interest margin has been calculated on a tax-equivalent basis. |
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| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| John Marshall Bancorp, Inc. | ||||||||||
| | | | | | | | | | | |
| Reconciliation of Certain Non-GAAP Financial Measures (unaudited) | ||||||||||
| (Dollar amounts in thousands) | ||||||||||
| | | As of and For the Three Months Ended | | |||||||
| | March 31, 2023 | December 31, 2022 | | March 31, 2022 | ||||||
| Regulatory Ratios (Bank) | | | | | ||||||
| Total risk-based capital (GAAP) | | $ | 290,202 | | $ | 283,471 | | $ | 259,940 | |
| Less: Losses on available-for-sale securities, net of tax benefit^(1)^ | | | 25,414 | | | 28,942 | | | 11,277 | |
| Less: Losses on held-to-maturity securities, net of tax benefit^(1)^ | | 13,067 | | 14,421 | | 7,209 | | |||
| Total risk-based capital, excluding losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP) | | $ | 251,721 | | $ | 240,108 | | $ | 241,454 | |
| | | | | | | | | | | |
| Tier 1 capital (GAAP) | | $ | 269,281 | | $ | 262,960 | | $ | 239,556 | |
| Less: Losses on available-for-sale securities, net of tax benefit^(1)^ | | | 25,414 | | | 28,942 | | | 11,277 | |
| Less: Losses on held-to-maturity securities, net of tax benefit^(1)^ | | 13,067 | | 14,421 | | 7,209 | | |||
| Tier 1 capital, excluding losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP) | | $ | 230,800 | | $ | 219,597 | | $ | 221,070 | |
| | | | | | | | | | | |
| Risk weighted assets (GAAP) | | $ | 1,805,238 | | $ | 1,819,305 | | $ | 1,685,524 | |
| Less: Risk weighted available-for-sale securities | | | 58,588 | | | 60,894 | | | 46,395 | |
| Less: Risk weighted held-to-maturity securities | | 17,611 | | 17,762 | | 18,609 | | |||
| Risk weighted assets, excluding available-for-sale and held-to-maturity securities (Non-GAAP) | | $ | 1,729,039 | | $ | 1,740,649 | | $ | 1,620,520 | |
| | | | | | | | | | | |
| Total assets for leverage ratio (GAAP) | | $ | 2,333,620 | | $ | 2,327,939 | | $ | 2,213,644 | |
| Less: Average available-for-sale securities | | | 356,708 | | | 362,024 | | | 263,669 | |
| Less: Average held-to-maturity securities | | 99,011 | | 100,050 | | 105,357 | | |||
| Total assets for leverage ratio, excluding available-for-sale and held-to-maturity securities (Non-GAAP) | | $ | 1,877,901 | | $ | 1,865,865 | | $ | 1,844,618 | |
| | | | | | | | | | | |
| Total risk-based capital ratio^(2)^ | | | | | | | | | | |
| Total risk-based capital ratio (GAAP) | | | 16.1 | % | | 15.6 | % | | 15.4 | % |
| Total risk-based capital ratio (Non-GAAP) | | | 14.6 | % | | 13.8 | % | | 14.9 | % |
| | | | | | | | | | | |
| Tier 1 capital ratio^(3)^ | | | | | | | | | | |
| Tier 1 risk-based capital ratio (GAAP) | | | 14.9 | % | | 14.4 | % | | 14.2 | % |
| Tier 1 risk-based capital ratio (Non-GAAP) | | | 13.3 | % | | 12.6 | % | | 13.6 | % |
| | | | | | | | | | | |
| Common equity tier 1 ratio^(4)^ | | | | | | | | | | |
| Common equity tier 1 ratio (GAAP) | | | 14.9 | % | | 14.4 | % | | 14.2 | % |
| Common equity tier 1 ratio (Non-GAAP) | | | 13.3 | % | | 12.6 | % | | 13.6 | % |
| | | | | | | | | | | |
| Leverage ratio^(5)^ | | | | | | | | | | |
| Leverage ratio (GAAP) | | | 11.5 | % | | 11.3 | % | | 10.8 | % |
| Leverage ratio (Non-GAAP) | | | 12.3 | % | | 11.8 | % | | 12.0 | % |
| | | | | | | | | | | |
| Non-interest Income | | | | | | | | | | |
| Non-interest Income (GAAP) | | $ | 566 | | | | | $ | 414 | |
| Less: Mark-to-market ("MTM") adjustment on investments related to the Company’s nonqualified deferred compensation ("NQDC") plan | | | 89 | | | | | | (116) | |
| Plus: Losses on sale of available-for-sale securities | | | (202) | | | | | | - - | |
| Non-interest income, excluding MTM adjustments on investments related to the Company's NQDC plan and losses on available-for-sale securities (Non-GAAP) | | $ | 679 | | | | | $ | 530 | |
| (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 tier 1 capital ratio is calculated by dividing tier 1 capital by risk weighted assets. |
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| (4) | The common equity tier 1 ratio is calculated by dividing tier 1 capital by risk weighted assets. |
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| (5) | The leverage ratio is calculated by dividing tier 1 capital by total assets for leverage ratio. |
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