RESTON, Va.--(BUSINESS WIRE)--John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the "Company"), parent company of John Marshall Bank (the "Bank"), reported net income of $4.2 million ($0.30 per diluted common share) for the quarter ended September 30, 2024, compared to net income of $3.9 million ($0.27 per diluted common share) for the quarter ended June 30, 2024 and a net loss of $10.1 million ($(0.72) per diluted common share) for the quarter ended September 30, 2023. The loss for the quarter ended September 30, 2023 was primarily attributable to the previously disclosed restructuring of the securities portfolio and surrender of bank owned life insurance (the "Restructuring").
Selected Highlights
- Earnings Growth - The Company's third quarter 2024 diluted earnings per share represents an 11.1% increase over the second quarter 2024. Pre-tax, pre-provision earnings (Non-GAAP) of $5.7 million for the quarter ended September 30, 2024 represent a 21.5% increase over the $4.7 million for the three months ended June 30, 2024.
- Margin Expansion - For the three months ended September 30, 2024, the Company reported an 11 basis points increase in net interest margin when compared to the three months ended June 30, 2024 and 23 basis points increase in net interest margin when compared to the three months ended September 30, 2023. In light of the liability sensitivity of the Company's balance sheet, management anticipates continued margin expansion should the Federal Reserve continue to decrease the federal funds target rate.
- Core Deposit Growth - Since June 30, 2024, the Company grew core customer funding sources $40.0 million or 6.8% annualized. Non-interest bearing demand deposits constituted the majority with growth of $35.3 million or 32.1% annualized from June 30, 2024.
- Improved Funding Mix - On a year-to-date basis, the Company has grown core customer funding sources $79.4 million or 6.7% annualized. For the nine months ended September 30, 2024, the Company has reduced wholesale funding by $57.9 million or 19.6% annualized.
- Loan Pipeline Growth - The Company's loan pipeline remained strong with $128.1 million in new commitments recorded during the three months ended September 30, 2024, a 44.9% improvement on the $88.4 million of new commitments recorded during the three months ended June 30, 2024. New commitments represent loans closed, but not necessarily fully funded as of the end of the respective reporting period.
- Pristine Asset Quality & Robust Capitalization - For the twentieth consecutive quarter, the Company had no non-performing loans, no other real estate owned and no loans 30 days or more past due. There were no charge-offs during the quarter. The Company continues to adhere to strict underwriting standards and proactively manages the portfolio. Each of the Bank's regulatory capital ratios remained well in excess of the well-capitalized thresholds as of September 30, 2024.
- Growing Book Value per Share - Book value per share has increased from $15.61 as of September 30, 2023 to $17.07 as of September 30, 2024, for an increase of 9.4%. When factoring in the $0.25 cash dividend per share paid in July 2024, the book value per share return has been 11.0% over the last twelve months.
Chris Bergstrom, President and Chief Executive Officer, commented, "The third quarter of 2024 reflects continued improvements in margin and net interest income. We expect to see opportunities to reprice loans at higher yields, reposition our funding base and lower funding costs. With the Federal Reserve taking an initial step in September to begin to lower the target range for the federal funds rate, we believe our margin improvement could accelerate. We have seen continued momentum with loan commitments and our capital, asset quality and liquidity positions are well-positioned to drive growth."
Balance Sheet, Liquidity and Credit Quality
Total assets were $2.27 billion at September 30, 2024, $2.24 billion at December 31, 2023, and $2.30 billion at September 30, 2023. Total assets have decreased $23.8 million or 1.0% since September 30, 2023 and increased $31.8 million or 1.4% since December 31, 2023. As discussed below, the Company has decreased wholesale funds $18.2 million since September 30, 2023 and $57.9 million since December 31, 2023. Had the Company not redeemed these wholesale funds, total assets would have decreased $5.6 million or 0.2% since September 30, 2023 and increased $89.7 million or 4.0% since December 31, 2023.
Total loans, net of unearned income, increased $22.5 million or 1.2% to $1.84 billion at September 30, 2024, compared to $1.82 billion at September 30, 2023. The increase in loans was primarily attributable to growth in the investor real estate loan and residential mortgage portfolios, partially offset by a decrease in the commercial owner-occupied real estate and construction & development loan portfolio.
Total loans, net of unearned income, increased $15.4 million during the quarter ended September 30, 2024 from $1.83 billion at June 30, 2024. The Bank continued to gain momentum in its loan pipeline with $128.1 million in new loan commitments recorded during the quarter ended September 30, 2024 compared to $88.4 million in new loan commitments recorded during the quarter ended June 30, 2024.
The carrying value of the Company's fixed income securities portfolio was $237.5 million at September 30, 2024, $265.5 million at December 31, 2023 and $265.4 million at September 30, 2023. The decrease in carrying value of the Company's fixed income securities portfolio since September 30, 2023 was attributable to runoff of the portfolio. As of September 30, 2024, 95.7% of our bond portfolio carried the implied guarantee of the United States government or one of its agencies. At September 30, 2024, 61% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At September 30, 2024, the fixed income portfolio had an estimated weighted average life of 4.0 years. The available-for-sale portfolio comprised approximately 63% of the fixed income securities portfolio and had a weighted average life of 2.8 years at September 30, 2024. The held-to-maturity portfolio comprised approximately 37% of the fixed income securities portfolio and had a weighted average life of 6.0 years at September 30, 2024. The Company did not purchase or sell any fixed income securities during the three month period ended September 30, 2024.
The Company's balance sheet remains highly liquid. The Company's liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $775.5 million as of September 30, 2024 compared to $639.0 million as of December 31, 2023 and represented 34.1% and 28.5% of total assets, respectively. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at September 30, 2024.
Total deposits were $1.94 billion at September 30, 2024, $1.91 billion at December 31, 2023 and $1.98 billion at September 30, 2023. During the quarter ended September 30, 2024, deposits increased $23.3 million or 1.2% primarily due to a 32.1% annualized increase in non-interest bearing demand deposits of $35.3 million. The Bank continued to manage reductions in costlier brokered deposits with a $17.5 million or 23.3% annualized decrease during the quarter. Absent the decrease in brokered deposits during the quarter, total deposits would have increased $64.1 million or 3.4%. As further detailed in the tables included in this release, core funding sources have increased $79.4 million and wholesale funding sources have decreased $57.9 million since December 31, 2023. As of September 30, 2024, the Company had $714.2 million deposits that were not insured or not collateralized compared to $634.1 million at December 31, 2023.
On September 3, 2024, the Company paid off its $77.0 million Bank Term Funding Program ("BTFP") advance and concurrently secured three Federal Home Loan Bank ("FHLB") advances totaling $56.0 million. The FHLB advances have a weighted average fixed interest rate of 4.01% compared to the BTFP advance fixed rate of 4.76%. Total borrowings as of September 30, 2024 consisted of subordinated debt totaling $24.7 million and the FHLB advances totaling $56.0 million.
Shareholders' equity increased $22.5 million or 10.2% to $243.1 million at September 30, 2024 compared to $220.5 million at September 30, 2023. Book value per share was $17.07 as of September 30, 2024 compared to $15.61 as of September 30, 2023, an increase of 9.4%. The year-over-year change in book value per share was primarily due to the Company's earnings over the previous twelve months and a decrease in accumulated other comprehensive loss. This increase was partially offset by increased cash dividends paid and increased share count from shareholder option exercises and restricted share award issuances. The decrease in accumulated other comprehensive loss was primarily attributable to decreases in unrealized losses on our available-for-sale investment portfolio due to market value increases.
The Bank's capital ratios at September 30, 2024 remained well above regulatory thresholds for well-capitalized banks. As of September 30, 2024, the Bank's total risk-based capital ratio was 16.3%, compared to 15.7% at September 30, 2023 and 15.7% at December 31, 2023. As outlined below, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at September 30, 2024 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized (Non-GAAP). Refer to "Explanation of Non-GAAP Measures" and the "Reconciliation of Certain Non-GAAP Financial Measures" table for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP.
Bank Regulatory Capital Ratios (As Reported) | |||||||||||||
Well-
| September 30, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||
Total risk-based capital ratio | 10.0 | % | 16.3 | % | 15.7 | % | 15.7 | % | |||||
Tier 1 risk-based capital ratio | 8.0 | % | 15.3 | % | 14.7 | % | 14.6 | % | |||||
Common equity tier 1 ratio | 6.5 | % | 15.3 | % | 14.7 | % | 14.6 | % | |||||
Leverage ratio | 5.0 | % | 11.9 | % | 11.6 | % | 11.3 | % | |||||
Adjusted Bank Regulatory Capital Ratios (Hypothetical Scenario of Selling All Bonds at Fair Market Value - Non-GAAP) | |||||||||||||
Well-
| September 30, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||
Adjusted total risk-based capital ratio | 10.0 | % | 15.6 | % | 14.7 | % | 14.1 | % | |||||
Adjusted tier 1 risk-based capital ratio | 8.0 | % | 14.5 | % | 13.5 | % | 12.9 | % | |||||
Adjusted common equity tier 1 ratio | 6.5 | % | 14.5 | % | 13.5 | % | 12.9 | % | |||||
Adjusted leverage ratio | 5.0 | % | 11.2 | % | 10.6 | % | 11.3 | % | |||||
The Company recorded no charge-offs during the nine months ended September 30, 2024. As of September 30, 2024, the Company had no loans greater than 30 days past due, no non-accrual loans, and no other real estate owned assets.
At September 30, 2024, the allowance for loan credit losses was $18.4 million or 1.00% of outstanding loans, net of unearned income, compared to $19.5 million or 1.05% of outstanding loans, net of unearned income, at December 31, 2023. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, resulted from changes in the Company's loss driver analysis and assumptions, changes in the composition of the loan portfolio, improved economic forecasts used in the quantitative portion of the model and considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.
At September 30, 2024, the allowance for credit losses on unfunded loan commitments was $1.0 million compared to $0.6 million at December 31, 2023. The increase in the allowance for credit losses on unfunded loan commitments was primarily the result of increases in unfunded loan commitments.
The Company did not have an allowance for credit losses on held-to-maturity securities as of September 30, 2024 or December 31, 2023. As of September 30, 2024, 93.5% of our held-to-maturity portfolio carried the implied guarantee of the United States Government or one of its agencies.
The Company's owner occupied and non-owner occupied CRE portfolios continue to be of sound credit quality. The following table provides a detailed breakout of the two aforementioned segments as of September 30, 2024, demonstrating their strong debt-service-coverage and loan-to-value ratios.
Commercial Real Estate | ||||||||||||||
Owner Occupied | Non-owner Occupied | |||||||||||||
Asset Class | Weighted
| Weighted
| Number of
| Principal
| Weighted
| Weighted
| Number of
| Principal
| ||||||
Warehouse & Industrial | 56.4 | % | 3.0 | x | 54 | $ | 77,492 | 50.1 | % | 2.5 | x | 46 | $ | 113,421 |
Office | 58.9 | % | 3.5 | x | 134 | 82,502 | 49.5 | % | 1.9 | x | 57 | 114,462 | ||
Retail | 60.5 | % | 3.3 | x | 41 | 70,048 | 50.4 | % | 1.9 | x | 141 | 417,652 | ||
Church | 28.5 | % | 2.7 | x | 18 | 32,249 | - - | - - | - - | - - | ||||
Hotel/Motel | - - | - - | - - | - - | 61.6 | % | 1.9 | x | 8 | 49,301 | ||||
Other(4) | 47.0 | % | 3.5 | x | 40 | 81,615 | 41.8 | % | 3.0 | x | 9 | 31,935 | ||
Total | 287 | $ | 343,906 | 261 | $ | 726,771 | ||||||||
| ____________________ | |
(1) | Loan-to-value is determined at origination date and is divided by principal balance as of September 30, 2024. |
(2) | The debt service coverage ratio ("DSCR") is calculated from the primary source of repayment for the loan. Owner occupied DSCR's are derived from cash flows from the owner occupant's business, property and their guarantors, while non-owner occupied DSCR's are derived from the net operating income of the property. |
(3) | Principal balance excludes deferred fees or costs. |
(4) | Other asset class is primarily comprised of schools, daycares and country clubs. |
Income Statement Review
Quarterly Results
The Company reported net income of $4.2 million for the third quarter of 2024, an increase of $14.3 million when compared to the net loss of $10.1 million for the third quarter of 2023. The previously disclosed Restructuring, whereby the Company sold certain lower-yielding available-for-sale investment securities with a total par value of $161.2 million and agreed to surrender $21.4 million of bank owned life insurance ("BOLI") contracts, resulted in a non-recurring, after-tax loss of $14.6 million that was recorded during the third quarter of 2023. Core net income (Non-GAAP) defined as reported net income excluding the non-recurring after-tax loss and taxes paid in conjunction with the Restructuring, was $4.5 million for the third quarter of 2023.
Net interest income for the third quarter of 2024 increased $1.2 million or 9.8% compared to the third quarter of 2023, driven primarily by the increase in yield on interest-earning assets, the increase in non-interest bearing deposit balances, and the decrease in interest-bearing deposit balances. The annualized net interest margin and tax-equivalent net interest margin (Non-GAAP) for the three months ended September 30, 2024 was 2.30%, as compared to 2.07% and 2.08%, respectively, for the same period in the prior year. The increase in net interest margin was primarily due to the increase in yields on the Company's interest-earning assets outpacing the increase in cost of interest-bearing liabilities.
The yield on interest earning assets was 4.97% for the third quarter of 2024 compared to 4.54% for the same period in 2023. The increase in yield on interest earning assets was primarily due to higher yields on the Company's loan portfolio as a result of repricing of assets subsequent to the third quarter of 2023. The cost of interest-bearing liabilities was 3.86% for the third quarter of 2024 compared to 3.41% for the same quarter in the prior year. The increase in the cost of interest-bearing liabilities was primarily due to the increase in the cost of interest-bearing deposits. During 2023, the Federal Reserve increased the federal funds rate 100 basis points, which generally resulted in an increase in rates offered on money market, NOW and savings deposit accounts and an increased cost when repricing time deposits since the third quarter of 2023. The Company continues to improve its funding mix. Average non-interest bearing demand deposits represented 22.6% of average funding for the three months ended September 30, 2024 versus 20.5% for the three months ended September 30, 2023. Average time deposits represented 36.2% of average funding for the three months ended September 30, 2024 versus 40.6% for the three months ended September 30, 2023.
The Company recorded a $400 thousand provision for credit losses for the third quarter of 2024 compared to a release of provision for credit losses of $829 thousand for the third quarter of 2023. The provision for credit losses during the third quarter of 2024 was primarily a result of increased unfunded loan commitments and changes in modeled probability of default and prepayment, curtailment and funding rates used in determining the allowance for credit losses.
Non-interest income was $617 thousand for the third quarter of 2024 compared to a loss of $16.8 million for the third quarter of 2023. Core non-interest income (Non-GAAP) defined as reported non-interest income excluding the $17.1 million loss stemming from the bond sale portion of the Restructuring was $299 thousand for the third quarter 2023. The increase in non-interest income of $318 thousand was primarily attributable to an increase of $199 thousand due to favorable mark-to-market adjustments on investments related to the Company's nonqualified deferred compensation plan ("NQDC") and a $133 thousand increase in gains recorded on the sale of the guaranteed portion of SBA 7(a) loans due to increased sale activity. These increases were partially offset by a decrease in BOLI income of $23 thousand due to the surrender of all BOLI policies in July 2023.
Non-interest expense increased $371 thousand or 4.8% during the third quarter of 2024 compared to the third quarter of 2023. The increase was primarily due to a non-recurring $322 thousand reversal of a litigation reserve during the third quarter of 2023. Excluding the effects of the $322 thousand reversal in 2023, non-interest expense increased $49 thousand or 0.6% during the third quarter of 2024 when compared to adjusted third quarter of 2023. The increase was primarily due to increases in professional fees and data processing expense, partially offset by lower salaries and employee benefit expense. The increase in professional fees was due to increased contract costs and services. The increase in data processing fees was primarily due to contractual increases and volume based activity. The decrease in salaries and employee benefits was due to lower incentive accruals and higher direct loan origination costs when compared to the same period of the prior year, partially offset by higher deferred compensation expense as result of mark-to-market fluctuations on the Company's NQDC. The Company continues to analyze cost savings opportunities on existing leases and material contracts.
For the three months ended September 30, 2024, annualized non-interest expense to average assets was 1.39% compared to 1.30% for the three months ended September 30, 2023. The increase was primarily due to higher reported non-interest expense when comparing the two periods, as discussed above.
For the three months ended September 30, 2024, the annualized efficiency ratio was 58.3% compared to the annualized core efficiency ratio, which excludes the impact of the Restructuring (Non-GAAP), of 62.4% for the three months ended September 30, 2023. The decrease was primarily due to an increase in interest income.
Year-to-Date Results
The Company reported net income of $12.3 million for the nine months ended September 30, 2024, an increase of $11.7 million when compared to net income of $656 thousand for the nine-months ended September 30, 2023. This increase was primarily attributable to the Restructuring, as previously discussed, that resulted in an after-tax loss of $14.6 million. Core net income (Non-GAAP) was $15.3 million for the nine months ended September 30, 2023.
Net interest income for the nine months ended September 30, 2024 decreased $1.5 million or 3.8% compared to the same period of 2023, driven primarily by the increase in costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.88% for the nine months ended September 30, 2024 compared to 4.32% for the same period in 2023. The increase in yield on interest earning assets was primarily due to higher yields on the Company's loans and deposits in banks as a result of increases in interest rates and repricing of assets subsequent to the third quarter of 2023. The cost of interest-bearing liabilities was 3.83% for the nine months ended September 30, 2024 compared to 2.89% for the nine months ended September 30, 2023. The increase in the cost of interest-bearing liabilities was primarily due to a 94 basis points increase in the cost of interest-bearing deposits as a result of the repricing of the Company's time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the third quarter of 2023. The annualized net interest margin and tax-equivalent net interest margin (Non-GAAP) for the nine-months ended September 30, 2024 were both 2.20%, as compared to 2.21% and 2.24%, respectively, for the same period in the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company's interest-earning assets.
The Company recorded a $0.7 million release of provision for credit losses for the nine months ended September 30, 2024 compared to $2.5 million release of provision for credit losses for the nine months ended September 30, 2023. The release of provision for credit losses during the nine months ended September 30, 2024 was primarily a result of changes in the composition and volume of the loan portfolio, improved economic forecasts used in the quantitative portion of the model and considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.
Non-interest income was $2.0 million for the nine months ended September 30, 2024 compared to a loss of $15.6 million for the nine months ended September 30, 2023. As previously disclosed and discussed herein, the Company recorded a loss on the sale of certain available-for-sale bonds of $17.1 million during the third quarter 2023. Core non-interest income (Non-GAAP) defined as reported non-interest income excluding the $17.1 million loss stemming from the bond sale portion of the Restructuring was $1.6 million for the nine months ended September 30, 2023. The 28.3% increase in non-interest income of $440 thousand was primarily attributable to a $459 thousand increase in gains recorded on the sale of the guaranteed portion of SBA 7(a) loans due to increased sale activity.
Non-interest expense increased $602 thousand or 2.6% during the nine months ended September 30, 2024 compared to the same period in 2023. The increase was primarily due to the non-recurring $322 thousand reversal of a litigation reserve during the third quarter of 2023 and previously disclosed non-recurring expenses totaling $138 thousand incurred during the first quarter of 2024. The first quarter 2024 non-recurring expenses were incurred in connection with a strategic opportunity that was explored and ultimately did not materialize. Excluding the effects of the $322 thousand reversal in 2023 and non-recurring expenses totaling $138 thousand incurred during 2024, non-interest expense increased $142 thousand or 0.6% during the adjusted nine months ended September 30, 2024 when compared to adjusted nine months ended September 30, 2023. The increase was primarily due to increases in professional fees and data processing expense, partially offset by lower salaries and employee benefit expense. The increase in professional fees was due to increased contract costs and services. The increase in data processing fees was primarily due to contractual increases and volume based activity. The decrease in salaries and employee benefits was due to lower incentive accruals and higher direct loan origination costs when compared to the same period of the prior year, partially offset by higher deferred compensation expense as result of mark-to-market fluctuations on the Company's NQDC.
For the nine months ended September 30, 2024, annualized non-interest expense to average assets was 1.41% compared to 1.33% for the nine months ended September 30, 2023. The increase was primarily due to higher reported non-interest expense when comparing the two periods.
For the nine months ended September 30, 2024, the annualized efficiency ratio was 61.2% compared to the annualized core efficiency ratio (Non-GAAP) of 58.1% for the nine months ended September 30, 2023. The decrease in efficiency ratio was primarily due to a decrease in net interest income.
Explanation of Non-GAAP Financial Measures
This release contains financial information determined by methods other than in accordance with GAAP. Management believes that the supplemental Non-GAAP information provides a better comparison of period-to-period operating performance and the impact of non-recurring expenses and unrealized losses in the Company's bond portfolio on the Bank's regulatory capital ratios. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:
- Tax-equivalent net interest margin reflects adjustments for differences in tax treatment of interest income sources;
- Adjusted Bank regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized;
- Pre-tax, pre-provision earnings excludes income tax expense and the provision for (recovery of) credit losses; and
- Core non-interest income, income before taxes, income tax expense, net income, earnings per share (basic and diluted), return on average assets (annualized), return on average equity (annualized), non-interest income as a percentage of average assets (annualized) and efficiency ratio excluding the impact of losses recognized in July 2023 on the sale of available-for-sale securities and taxes paid on the early surrender of BOLI policies.
These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to Non-GAAP performance measures which may be presented by other companies. Please refer to the Reconciliation of Certain Non-GAAP Financial Measures table and Average Balance Sheets, Interest and Rates tables for the respective periods for a reconciliation of these Non-GAAP measures to the most directly comparable GAAP measure.
About John Marshall Bancorp, Inc.
John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington, D.C. Metropolitan area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers' financial goals. Dedicated relationship managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including charter and private schools, government contractors, health services, nonprofits and associations, professional services, property management companies and title companies. Learn more at www.johnmarshallbank.com.
Cautionary Note Regarding Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "should," "may," "view," "opportunity," "potential," or similar expressions or expressions of confidence. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and the Bank include, but are not limited to, the following: the concentration of our business in the Washington, D.C. metropolitan area and the effect of changes in the economic, political and environmental conditions on this market; adequacy of our allowance for loan credit losses; allowance for unfunded commitments credit losses, and allowance for credit losses associated with our held-to-maturity and available-for-sale securities portfolios; deterioration of our asset quality; future performance of our loan portfolio with respect to recently originated loans; the level of prepayments on loans and mortgage-backed securities; liquidity, interest rate and operational risks associated with our business; changes in our financial condition or results of operations that reduce capital; our ability to maintain existing deposit relationships or attract new deposit relationships; changes in consumer spending, borrowing and savings habits; inflation and changes in interest rates that may reduce our margins or reduce the fair value of financial instruments; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; additional risks related to new lines of business, products, product enhancements or services; increased competition with other financial institutions and fintech companies; adverse changes in the securities markets; changes in the financial condition or future prospects of issuers of securities that we own; our ability to maintain an effective risk management framework; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; compliance with legislative or regulatory requirements; results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take similar actions; potential claims, damages, and fines related to litigation or government actions; the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses thereto; technological risks and developments, and cyber threats, attacks, or events; the additional requirements of being a public company; changes in accounting policies and practices; our ability to successfully capitalize on growth opportunities; our ability to retain key employees; deteriorating economic conditions, either nationally or in our market area, including higher unemployment and lower real estate values; implications of our status as a smaller reporting company and as an emerging growth company; and other factors discussed in the Company's reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
John Marshall Bancorp, Inc. | |||||||||||||
Financial Highlights (Unaudited) | |||||||||||||
(Dollar amounts in thousands, except per share data) | |||||||||||||
At or For the Three Months Ended | At or For the Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||
Selected Balance Sheet Data | |||||||||||||
Cash and cash equivalents | $ | 177,227 | $ | 192,656 | $ | 177,227 | $ | 192,656 | |||||
Total investment securities | 247,840 | 272,881 | 247,840 | 272,881 | |||||||||
Loans, net of unearned income | 1,842,598 | 1,820,132 | 1,842,598 | 1,820,132 | |||||||||
Allowance for loan credit losses | 18,481 | 20,036 | 18,481 | 20,036 | |||||||||
Total assets | 2,274,363 | 2,298,202 | 2,274,363 | 2,298,202 | |||||||||
Non-interest bearing demand deposits | 472,422 | 437,880 | 472,422 | 437,880 | |||||||||
Interest bearing deposits | 1,463,728 | 1,543,743 | 1,463,728 | 1,543,743 | |||||||||
Total deposits | 1,936,150 | 1,981,623 | 1,936,150 | 1,981,623 | |||||||||
Federal Home Loan Bank advances | 56,000 | - - | 56,000 | - | |||||||||
Federal Reserve Bank borrowings | - - | 54,000 | - - | 54,000 | |||||||||
Shareholders' equity | 243,118 | 220,567 | 243,118 | 220,567 | |||||||||
Summary Results of Operations | |||||||||||||
Interest income | $ | 28,428 | $ | 26,263 | $ | 82,138 | $ | 74,171 | |||||
Interest expense | 15,272 | 14,284 | 45,158 | 35,715 | |||||||||
Net interest income | 13,156 | 11,979 | 36,980 | 38,456 | |||||||||
Provision for (recovery of) credit losses | 400 | (829 | ) | (667 | ) | (2,471 | ) | ||||||
Net interest income after provision for (recovery of) credit losses | 12,756 | 12,808 | 37,647 | 40,927 | |||||||||
Non-interest income (loss) | 617 | (16,815 | ) | 1,990 | (15,564 | ) | |||||||
Core non-interest income(1) | 617 | 299 | 1,990 | 1,550 | |||||||||
Non-interest expense | 8,031 | 7,660 | 23,863 | 23,261 | |||||||||
Income (loss) before income taxes | 5,342 | (11,667 | ) | 15,774 | 2,102 | ||||||||
Core income before income taxes(1) | 5,342 | 5,447 | 15,774 | 19,216 | |||||||||
Net income (loss) | 4,235 | (10,137 | ) | 12,344 | 656 | ||||||||
Core net income(1) | 4,235 | 4,484 | 12,344 | 15,277 | |||||||||
Per Share Data and Shares Outstanding | |||||||||||||
Earnings (loss) per share - basic | $ | 0.30 | $ | (0.72 | ) | $ | 0.87 | $ | 0.05 | ||||
Core earnings per share - basic(1) | $ | 0.30 | $ | 0.32 | $ | 0.87 | $ | 1.08 | |||||
Earnings (loss) per share - diluted | $ | 0.30 | $ | (0.72 | ) | $ | 0.87 | $ | 0.05 | ||||
Core earnings per share - diluted(1) | $ | 0.30 | $ | 0.32 | $ | 0.87 | $ | 1.08 | |||||
Book value per share | $ | 17.07 | $ | 15.61 | $ | 17.07 | $ | 15.61 | |||||
Weighted average common shares (basic) | 14,187,691 | 14,080,026 | 14,164,060 | 14,126,522 | |||||||||
Weighted average common shares (diluted) | 14,214,586 | 14,080,026 | 14,198,332 | 14,199,179 | |||||||||
Common shares outstanding at end of period | 14,238,677 | 14,126,084 | 14,238,677 | 14,126,084 | |||||||||
Performance Ratios | |||||||||||||
Return on average assets (annualized) | 0.73 | % | (1.73 | )% | 0.73 | % | 0.04 | % | |||||
Core return on average assets (annualized)(1) | 0.73 | % | 0.76 | % | 0.73 | % | 0.87 | % | |||||
Return on average equity (annualized) | 7.00 | % | (18.24 | )% | 6.97 | % | 0.40 | % | |||||
Core return on average equity (annualized)(1) | 7.00 | % | 8.07 | % | 6.97 | % | 9.25 | % | |||||
Net interest margin | 2.30 | % | 2.07 | % | 2.20 | % | 2.22 | % | |||||
Tax-equivalent net interest margin (Non-GAAP) | 2.30 | % | 2.08 | % | 2.20 | % | 2.25 | % | |||||
Non-interest income (loss) as a percentage of average assets (annualized) | 0.11 | % | (2.86 | )% | 0.12 | % | (0.89 | )% | |||||
Core non-interest income as a percentage of average assets (annualized)(1) | 0.11 | % | 0.05 | % | 0.12 | % | 0.09 | % | |||||
Non-interest expense to average assets (annualized) | 1.39 | % | 1.30 | % | 1.41 | % | 1.33 | % | |||||
Efficiency ratio | 58.3 | % | (158.4 | )% | 61.2 | % | 101.6 | % | |||||
Core efficiency ratio(1) | 58.3 | % | 62.4 | % | 61.2 | % | 58.1 | % | |||||
Asset Quality | |||||||||||||
Non-performing assets to total assets | - - | % | - - | % | - - | % | - - | % | |||||
Non-performing loans to total loans | - - | % | - - | % | - - | % | - - | % | |||||
Allowance for loan credit losses to non-performing loans | N/M | N/M | N/M | N/M | |||||||||
Allowance for loan credit losses to total loans | 1.00 | % | 1.10 | % | 1.00 | % | 1.10 | % | |||||
Net charge-offs (recoveries) to average loans (annualized) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||
Loans 30-89 days past due and accruing interest | $ | - - | $ | - - | $ | - - | $ | - - | |||||
Non-accrual loans | - - | - - | - - | - - | |||||||||
Other real estate owned | - - | - - | - - | - - | |||||||||
Non-performing assets (2) | - - | - - | - - | - - | |||||||||
Capital Ratios (Bank Level) | |||||||||||||
Equity / assets | 11.6 | % | 10.6 | % | 11.6 | % | 10.6 | % | |||||
Total risk-based capital ratio | 16.3 | % | 15.7 | % | 16.3 | % | 15.7 | % | |||||
Tier 1 risk-based capital ratio | 15.3 | % | 14.6 | % | 15.3 | % | 14.6 | % | |||||
Common equity tier 1 ratio | 15.3 | % | 14.6 | % | 15.3 | % | 14.6 | % | |||||
Leverage ratio | 11.9 | % | 11.3 | % | 11.9 | % | 11.3 | % | |||||
Other Information | |||||||||||||
Number of full time equivalent employees | 134 | 138 | 134 | 138 | |||||||||
# Full service branch offices | 8 | 8 | 8 | 8 | |||||||||
| __________________ | |
(1) | Non-GAAP financial measure. Refer to "Reconciliation of Certain Non-GAAP Financial Measures" for further details. |
(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. |
John Marshall Bancorp, Inc. | ||||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||||
(Dollar amounts in thousands, except per share data) | ||||||||||||||||||
% Change | ||||||||||||||||||
September 30, | December 31, | September 30, | Last Nine | Year Over | ||||||||||||||
2024 | 2023 | 2023 | Months | Year | ||||||||||||||
Assets | (Unaudited) | * | (Unaudited) | |||||||||||||||
Cash and due from banks | $ | 8,164 | $ | 7,424 | $ | 7,642 | 10.0 | % | 6.8 | % | ||||||||
Interest-bearing deposits in banks | 169,063 | 91,581 | 185,014 | 84.6 | % | (8.6 | )% | |||||||||||
Securities available-for-sale, at fair value | 144,649 | 169,993 | 169,084 | (14.9 | )% | (14.5 | )% | |||||||||||
Securities held-to-maturity at amortized cost, fair value of $79,731, $79,532, and $75,733 at 9/30/2024, 12/31/2023, and 9/30/2023, respectively. | 92,863 | 95,505 | 96,347 | (2.8 | )% | (3.6 | )% | |||||||||||
Restricted securities, at cost | 7,630 | 5,012 | 5,007 | 52.2 | % | 52.4 | % | |||||||||||
Equity securities, at fair value | 2,698 | 2,792 | 2,443 | (3.4 | )% | 10.4 | % | |||||||||||
Loans, net of unearned income | 1,842,598 | 1,859,967 | 1,820,132 | (0.9 | )% | 1.2 | % | |||||||||||
Allowance for credit losses | (18,481 | ) | (19,543 | ) | (20,036 | ) | (5.4 | )% | (7.8 | )% | ||||||||
Net loans | 1,824,117 | 1,840,424 | 1,800,096 | (0.9 | )% | 1.3 | % | |||||||||||
Bank premises and equipment, net | 1,179 | 1,281 | 1,264 | (8.0 | )% | (6.7 | )% | |||||||||||
Accrued interest receivable | 5,657 | 6,110 | 5,701 | (7.4 | )% | (0.8 | )% | |||||||||||
Right of use assets | 3,824 | 4,176 | 4,136 | (8.4 | )% | (7.5 | )% | |||||||||||
Other assets | 14,519 | 18,251 | 21,468 | (20.4 | )% | (32.4 | )% | |||||||||||
Total assets | $ | 2,274,363 | $ | 2,242,549 | $ | 2,298,202 | 1.4 | % | (1.0 | )% | ||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||
Liabilities | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Non-interest bearing demand deposits | $ | 472,422 | $ | 411,374 | $ | 437,880 | 14.8 | % | 7.9 | % | ||||||||
Interest-bearing demand deposits | 685,385 | 607,971 | 675,819 | 12.7 | % | 1.4 | % | |||||||||||
Savings deposits | 43,779 | 52,061 | 57,408 | (15.9 | )% | (23.7 | )% | |||||||||||
Time deposits | 734,564 | 835,194 | 810,516 | (12.0 | )% | (9.4 | )% | |||||||||||
Total deposits | 1,936,150 | 1,906,600 | 1,981,623 | 1.5 | % | (2.3 | )% | |||||||||||
Federal funds purchased | - - | 10,000 |
| - - | (100.0 | )% | N/M | |||||||||||
Federal Home Loan Bank advances | 56,000 | - - | - - | N/M | N/M | |||||||||||||
Federal Reserve Bank borrowings | - - | 54,000 | 54,000 | (100.0 | )% | (100.0 | )% | |||||||||||
Subordinated debt, net | 24,770 | 24,708 | 24,687 | 0.3 | % | 0.3 | % | |||||||||||
Accrued interest payable | 2,304 | 4,559 | 2,610 | (49.5 | )% | (11.7 | )% | |||||||||||
Lease liabilities | 4,090 | 4,446 | 4,415 | (8.0 | )% | (7.4 | )% | |||||||||||
Other liabilities | 7,931 | 8,322 | 10,300 | (4.7 | )% | (23.0 | )% | |||||||||||
Total liabilities | 2,031,245 | 2,012,635 | 2,077,635 | 0.9 | % | (2.2 | )% | |||||||||||
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, 14,238,677 at 9/30/24 including 45,753 unvested shares, issued and outstanding, 14,148,533 at 12/31/2023 including 47,318 unvested shares, and 14,126,084 at 9/30/2023 including 45,871 unvested shares | 142 | 141 | 141 | 0.7 | % | 0.7 | % | |||||||||||
Additional paid-in capital | 97,017 | 95,636 | 95,510 | 1.4 | % | 1.6 | % | |||||||||||
Retained earnings | 155,174 | 146,388 | 141,886 | 6.0 | % | 9.4 | % | |||||||||||
Accumulated other comprehensive loss | (9,215 | ) | (12,251 | ) | (16,970 | ) | (24.8 | )% | (45.7 | )% | ||||||||
Total shareholders' equity | 243,118 | 229,914 | 220,567 | 5.7 | % | 10.2 | % | |||||||||||
Total liabilities and shareholders' equity | $ | 2,274,363 | $ | 2,242,549 | $ | 2,298,202 | 1.4 | % | (1.0 | )% | ||||||||
* Derived from audited consolidated financial statements.
John Marshall Bancorp, Inc. | |||||||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||||||
(Dollar amounts in thousands, except per share data) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30 | September 30 | ||||||||||||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||
Interest and Dividend Income | |||||||||||||||||||||
Interest and fees on loans | $ | 24,306 | $ | 21,925 | 10.9 | % | $ | 71,289 | $ | 63,355 | 12.5 | % | |||||||||
Interest on investment securities, taxable | 1,138 | 1,507 | (24.5 | )% | 3,602 | 5,895 | (38.9 | )% | |||||||||||||
Interest on investment securities, tax-exempt | 9 | 10 | (10.0 | )% | 27 | 45 | (40.0 | )% | |||||||||||||
Dividends | 97 | 75 | 29.3 | % | 262 | 222 | 18.0 | % | |||||||||||||
Interest on deposits in other banks | 2,878 | 2,746 | 4.8 | % | 6,958 | 4,654 | 49.5 | % | |||||||||||||
Total interest and dividend income | 28,428 | 26,263 | 8.2 | % | 82,138 | 74,171 | 10.7 | % | |||||||||||||
Interest Expense | |||||||||||||||||||||
Deposits | 14,102 | 13,273 | 6.2 | % | 41,484 | 33,590 | 23.5 | % | |||||||||||||
Federal funds purchased | - - | - - | N/M | 2 | 10 | N/M | |||||||||||||||
Federal Home Loan Bank advances | 174 | - - | N/M | 174 | 67 | N/M | |||||||||||||||
Federal Reserve Bank borrowings | 647 | 662 | (2.3 | )% | 2,451 | 1,001 | 144.9 | % | |||||||||||||
Subordinated debt | 349 | 349 | -- | % | 1,047 | 1,047 | -- | % | |||||||||||||
Total interest expense | 15,272 | 14,284 | 6.9 | % | 45,158 | 35,715 | 26.4 | % | |||||||||||||
Net interest income | 13,156 | 11,979 | 9.8 | % | 36,980 | 38,456 | (3.8 | )% | |||||||||||||
Provision for (recovery of) Credit Losses | 400 | (829 | ) | (148.3 | )% | (667 | ) | (2,471 | ) | (73.0 | )% | ||||||||||
Net interest income after provision for (recovery of) credit losses | 12,756 | 12,808 | (0.4 | )% | 37,647 | 40,927 | (8.0 | )% | |||||||||||||
Non-interest Income | |||||||||||||||||||||
Service charges on deposit accounts | 84 | 85 | (1.2 | )% | 260 | 239 | 8.8 | % | |||||||||||||
Bank owned life insurance | - - | 23 | N/M | - - | 224 | N/M | |||||||||||||||
Other service charges and fees | 160 | 160 | - - | % | 474 | 677 | (30.0 | )% | |||||||||||||
Losses on sale of available-for-sale securities | - - | (17,114 | ) | N/M | - - | (17,316 | ) | N/M | |||||||||||||
Insurance commissions | 64 | 54 | 18.5 | % | 357 | 310 | 15.2 | % | |||||||||||||
Gain on sale of government guaranteed loans | 160 | 27 | N/M | 509 | 50 | N/M | |||||||||||||||
Non-qualified deferred compensation plan asset gains (loss), net | 139 | (60 | ) | N/M | 298 | 112 | 166.1 | % | |||||||||||||
Other income | 10 | 10 | - - | % | 92 | 140 | (34.3 | )% | |||||||||||||
Total non-interest income (loss) | 617 | (16,815 | ) | (103.7 | )% | 1,990 | (15,564 | ) | (112.8 | ) | |||||||||||
Non-interest Expenses | |||||||||||||||||||||
Salaries and employee benefits | 4,897 | 5,052 | (3.1 | )% | 14,583 | 14,929 | (2.3 | )% | |||||||||||||
Occupancy expense of premises | 444 | 445 | -- | % | 1,343 | 1,363 | (1.5 | )% | |||||||||||||
Furniture and equipment expenses | 304 | 282 | 7.8 | % | 902 | 882 | 2.3 | % | |||||||||||||
Other expenses | 2,386 | 1,881 | 26.8 | % | 7,035 | 6,087 | 15.6 | % | |||||||||||||
Total non-interest expenses | 8,031 | 7,660 | 4.8 | % | 23,863 | 23,261 | 2.6 | % | |||||||||||||
Income (Loss) before income taxes | 5,342 | (11,667 | ) | (145.8 | )% | 15,774 | 2,102 | 650.4 | % | ||||||||||||
Income Tax Expense (Benefit) | 1,107 | (1,530 | ) | (172.4 | )% | 3,430 | 1,446 | 137.2 | % | ||||||||||||
Net income (Loss) | $ | 4,235 | $ | (10,137 | ) | (141.8 | )% | $ | 12,344 | $ | 656 | 1,781.7 | % | ||||||||
Earnings Per Share | |||||||||||||||||||||
Basic | $ | 0.30 | $ | (0.72 | ) | N/M | $ | 0.87 | $ | 0.05 | N/M | ||||||||||
Diluted | $ | 0.30 | $ | (0.72 | ) | N/M | $ | 0.87 | $ | 0.05 | N/M | ||||||||||
John Marshall Bancorp, Inc. | ||||||||||||||||||||||
Historical Trends - Quarterly Financial Data (Unaudited) | ||||||||||||||||||||||
(Dollar amounts in thousands, except per share data) | ||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||
Profitability for the Quarter: | ||||||||||||||||||||||
Interest income | $ | 28,428 | $ | 26,791 | $ | 26,919 | $ | 26,598 | $ | 26,263 | $ | 24,455 | $ | 23,453 | ||||||||
Interest expense | 15,272 | 14,710 | 15,175 | 14,571 | 14,284 | 12,446 | 8,984 | |||||||||||||||
Net interest income | 13,156 | 12,081 | 11,744 | 12,027 | 11,979 | 12,009 | 14,469 | |||||||||||||||
Provision for (recovery of) credit losses | 400 | (292 | ) | (776 | ) | (781 | ) | (829 | ) | (868 | ) | (774 | ) | |||||||||
Non-interest income (loss) | 617 | 555 | 818 | 624 | (16,815 | ) | 685 | 566 | ||||||||||||||
Non-interest expenses | 8,031 | 7,909 | 7,924 | 7,554 | 7,660 | 7,831 | 7,770 | |||||||||||||||
Income (loss) before income taxes | 5,342 | 5,019 | 5,414 | 5,878 | (11,667 | ) | 5,731 | 8,039 | ||||||||||||||
Income tax expense (benefit) | 1,107 | 1,114 | 1,210 | 1,376 | (1,530 | ) | 1,241 | 1,735 | ||||||||||||||
Net income (loss) | $ | 4,235 | $ | 3,905 | $ | 4,204 | $ | 4,502 | $ | (10,137 | ) | $ | 4,490 | $ | 6,304 | |||||||
Financial Performance: | ||||||||||||||||||||||
Return on average assets (annualized) | 0.73 | % | 0.70 | % | 0.75 | % | 0.78 | % | (1.73 | )% | 0.77 | % | 1.10 | % | ||||||||
Return on average equity (annualized) | 7.00 | % | 6.68 | % | 7.23 | % | 7.91 | % | (18.24 | )% | 8.13 | % | 11.83 | % | ||||||||
Net interest margin | 2.30 | % | 2.19 | % | 2.10 | % | 2.11 | % | 2.07 | % | 2.09 | % | 2.56 | % | ||||||||
Tax-equivalent net interest margin (Non-GAAP) | 2.30 | % | 2.19 | % | 2.11 | % | 2.12 | % | 2.08 | % | 2.10 | % | 2.57 | % | ||||||||
Non-interest income (loss) as a percentage of average assets (annualized) | 0.11 | % | 0.10 | % | 0.15 | % | 0.11 | % | (2.86 | )% | 0.12 | % | 0.10 | % | ||||||||
Non-interest expense to average assets (annualized) | 1.39 | % | 1.42 | % | 1.41 | % | 1.31 | % | 1.30 | % | 1.34 | % | 1.35 | % | ||||||||
Efficiency ratio | 58.3 | % | 62.6 | % | 63.1 | % | 59.7 | % | (158.4 | )% | 61.7 | % | 51.7 | % | ||||||||
Per Share Data: | ||||||||||||||||||||||
Earnings (loss) per share - basic | $ | 0.30 | $ | 0.27 | $ | 0.30 | $ | 0.32 | $ | (0.72 | ) | $ | 0.32 | $ | 0.45 | |||||||
Earnings (loss) per share - diluted | $ | 0.30 | $ | 0.27 | $ | 0.30 | $ | 0.32 | $ | (0.72 | ) | $ | 0.32 | $ | 0.44 | |||||||
Book value per share | $ | 17.07 | $ | 16.54 | $ | 16.51 | $ | 16.25 | $ | 15.61 | $ | 15.50 | $ | 15.63 | ||||||||
Dividends declared per share | $ | - - | $ | 0.25 | $ | - - | $ | - - | $ | - - | $ | 0.22 | $ | - - | ||||||||
Weighted average common shares (basic) | 14,187,691 | 14,173,245 | 14,130,986 | 14,082,762 | 14,080,026 | 14,077,658 | 14,067,047 | |||||||||||||||
Weighted average common shares (diluted) | 14,214,586 | 14,200,171 | 14,181,254 | 14,145,607 | 14,080,026 | 14,143,253 | 14,156,724 | |||||||||||||||
Common shares outstanding at end of period | 14,238,677 | 14,229,853 | 14,209,606 | 14,148,533 | 14,126,084 | 14,126,138 | 14,125,208 | |||||||||||||||
Non-interest Income: | ||||||||||||||||||||||
Service charges on deposit accounts | $ | 84 | $ | 88 | $ | 88 | $ | 91 | $ | 85 | $ | 82 | $ | 72 | ||||||||
Bank owned life insurance | - - | - - | - - | - - | 23 | 101 | 100 | |||||||||||||||
Other service charges and fees | 160 | 165 | 149 | 161 | 160 | 314 | 203 | |||||||||||||||
Losses on sale of available-for-sale securities | - - | - - | - - | - - | (17,114 | ) | - - | (202 | ) | |||||||||||||
Insurance commissions | 64 | 40 | 252 | 76 | 54 | 50 | 206 | |||||||||||||||
Gain on sale of government guaranteed loans | 160 | 216 | 133 | 81 | 27 | 23 | - - | |||||||||||||||
Non-qualified deferred compensation plan asset gains (losses), net | 139 | 35 | 124 | 205 | (60 | ) | 83 | 89 | ||||||||||||||
Other income | 10 | 11 | 72 | 10 | 10 | 32 | 98 | |||||||||||||||
Total non-interest income (loss) | $ | 617 | $ | 555 | $ | 818 | $ | 624 | $ | (16,815 | ) | $ | 685 | $ | 566 | |||||||
Non-interest Expenses: | ||||||||||||||||||||||
Salaries and employee benefits | $ | 4,897 | $ | 4,875 | $ | 4,810 | $ | 4,507 | $ | 5,052 | $ | 4,965 | $ | 4,912 | ||||||||
Occupancy expense of premises | 444 | 448 | 451 | 448 | 445 | 448 | 470 | |||||||||||||||
Furniture and equipment expenses | 304 | 301 | 297 | 296 | 282 | 304 | 296 | |||||||||||||||
Other expenses | 2,386 | 2,285 | 2,366 | 2,303 | 1,881 | 2,114 | 2,092 | |||||||||||||||
Total non-interest expenses | $ | 8,031 | $ | 7,909 | $ | 7,924 | $ | 7,554 | $ | 7,660 | $ | 7,831 | $ | 7,770 | ||||||||
Balance Sheets at Quarter End: | ||||||||||||||||||||||
Total loans, net of unearned income | $ | 1,842,598 | $ | 1,827,187 | $ | 1,825,931 | $ | 1,859,967 | $ | 1,820,132 | $ | 1,769,801 | $ | 1,771,272 | ||||||||
Allowance for loan credit losses | (18,481 | ) | (18,433 | ) | (18,671 | ) | (19,543 | ) | (20,036 | ) | (20,629 | ) | (21,619 | ) | ||||||||
Investment securities | 247,840 | 249,582 | 261,341 | 273,302 | 272,881 | 429,954 | 445,785 | |||||||||||||||
Interest-earning assets | 2,259,501 | 2,249,350 | 2,234,592 | 2,224,850 | 2,278,027 | 2,315,368 | 2,312,404 | |||||||||||||||
Total assets | 2,274,363 | 2,269,757 | 2,251,837 | 2,242,549 | 2,298,202 | 2,364,250 | 2,351,307 | |||||||||||||||
Total deposits | 1,936,150 | 1,912,840 | 1,900,990 | 1,906,600 | 1,981,623 | 2,046,309 | 2,088,642 | |||||||||||||||
Total interest-bearing liabilities | 1,544,498 | 1,577,420 | 1,598,050 | 1,583,934 | 1,622,430 | 1,691,044 | 1,665,837 | |||||||||||||||
Total shareholders' equity | 243,118 | 235,346 | 234,550 | 229,914 | 220,567 | 218,970 | 220,823 | |||||||||||||||
Quarterly Average Balance Sheets: | ||||||||||||||||||||||
Total loans, net of unearned income | $ | 1,818,472 | $ | 1,810,722 | $ | 1,835,966 | $ | 1,837,855 | $ | 1,790,720 | $ | 1,767,831 | $ | 1,772,922 | ||||||||
Investment securities | 249,354 | 255,940 | 270,760 | 273,264 | 310,407 | 441,778 | 463,254 | |||||||||||||||
Interest-earning assets | 2,277,427 | 2,222,658 | 2,247,620 | 2,260,356 | 2,301,642 | 2,305,050 | 2,295,677 | |||||||||||||||
Total assets | 2,292,385 | 2,239,261 | 2,264,544 | 2,280,060 | 2,331,403 | 2,344,712 | 2,334,695 | |||||||||||||||
Total deposits | 1,939,601 | 1,883,010 | 1,914,173 | 1,956,039 | 2,012,934 | 2,051,702 | 2,066,139 | |||||||||||||||
Total interest-bearing liabilities | 1,573,631 | 1,551,953 | 1,600,197 | 1,587,179 | 1,660,980 | 1,667,597 | 1,621,131 | |||||||||||||||
Total shareholders' equity | 240,609 | 235,136 | 233,952 | 225,718 | 220,473 | 221,608 | 220,282 | |||||||||||||||
Financial Measures: | ||||||||||||||||||||||
Average equity to average assets | 10.5 | % | 10.5 | % | 10.3 | % | 9.9 | % | 9.5 | % | 9.5 | % | 9.4 | % | ||||||||
Investment securities to earning assets | 11.0 | % | 11.1 | % | 11.7 | % | 12.3 | % | 12.0 | % | 18.6 | % | 19.3 | % | ||||||||
Loans to earning assets | 81.5 | % | 81.2 | % | 81.7 | % | 83.6 | % | 79.9 | % | 76.4 | % | 76.6 | % | ||||||||
Loans to assets | 81.0 | % | 80.5 | % | 81.1 | % | 82.9 | % | 79.2 | % | 74.9 | % | 75.3 | % | ||||||||
Loans to deposits | 95.2 | % | 95.5 | % | 96.1 | % | 97.6 | % | 91.9 | % | 86.5 | % | 84.8 | % | ||||||||
Capital Ratios (Bank Level): | ||||||||||||||||||||||
Equity / assets | 11.6 | % | 11.4 | % | 11.3 | % | 11.1 | % | 10.6 | % | 10.2 | % | 10.3 | % | ||||||||
Total risk-based capital ratio | 16.3 | % | 16.4 | % | 16.1 | % | 15.7 | % | 15.7 | % | 16.1 | % | 16.1 | % | ||||||||
Tier 1 risk-based capital ratio | 15.3 | % | 15.4 | % | 15.1 | % | 14.7 | % | 14.6 | % | 15.0 | % | 14.9 | % | ||||||||
Common equity tier 1 ratio | 15.3 | % | 15.4 | % | 15.1 | % | 14.7 | % | 14.6 | % | 15.0 | % | 14.9 | % | ||||||||
Leverage ratio | 11.9 | % | 12.2 | % | 11.8 | % | 11.6 | % | 11.3 | % | 11.6 | % | 11.5 | % | ||||||||
John Marshall Bancorp, Inc. | ||||||||||||||||||||||||||||
Loan, Deposit and Borrowing Detail (Unaudited) | ||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||||||
Loans | $
| % of
| $
| % of
| $
| % of
| $
| % of
| $
| % of
| $
| % of
| $
| % of
| ||||||||||||||
Commercial business loans | $ | 39,741 | 2.2 | % | $ | 41,806 | 2.3 | % | $ | 42,779 | 2.3 | % | $ | 45,073 | 2.4 | % | $ | 37,793 | 2.1 | % | $ | 40,156 | 2.3 | % | $ | 41,204 | 2.3 | % |
Commercial PPP loans | 126 | 0.0 | % | 127 | 0.0 | % | 129 | 0.0 | % | 131 | 0.0 | % | 132 | 0.0 | % | 133 | 0.0 | % | 135 | 0.0 | % | |||||||
Commercial owner-occupied real estate loans | 343,906 | 18.7 | % | 349,644 | 19.2 | % | 356,335 | 19.6 | % | 360,102 | 19.4 | % | 363,017 | 20.0 | % | 360,859 | 20.4 | % | 363,495 | 20.6 | % | |||||||
Total business loans | 383,773 | 20.9 | % | 391,577 | 21.5 | % | 399,243 | 21.9 | % | 405,306 | 21.8 | % | 400,942 | 22.1 | % | 401,148 | 22.7 | % | 404,834 | 22.9 | % | |||||||
Investor real estate loans | 726,771 | 39.5 | % | 722,419 | 39.6 | % | 692,418 | 38.0 | % | 689,556 | 37.1 | % | 683,686 | 37.6 | % | 654,623 | 37.0 | % | 660,740 | 37.4 | % | |||||||
Construction & development loans | 161,466 | 8.8 | % | 138,744 | 7.6 | % | 151,476 | 8.3 | % | 180,922 | 9.8 | % | 179,570 | 9.9 | % | 179,656 | 10.2 | % | 179,606 | 10.2 | % | |||||||
Multi-family loans | 91,426 | 5.0 | % | 91,925 | 5.1 | % | 94,719 | 5.2 | % | 96,458 | 5.2 | % | 86,366 | 4.8 | % | 86,061 | 4.9 | % | 88,670 | 5.0 | % | |||||||
Total commercial real estate loans | 979,663 | 53.3 | % | 953,088 | 52.3 | % | 938,613 | 51.5 | % | 966,936 | 52.1 | % | 949,622 | 52.3 | % | 920,340 | 52.1 | % | 929,016 | 52.6 | % | |||||||
Residential mortgage loans | 473,787 | 25.8 | % | 476,764 | 26.2 | % | 482,254 | 26.5 | % | 482,182 | 26.1 | % | 464,509 | 25.7 | % | 443,305 | 25.2 | % | 433,076 | 24.5 | % | |||||||
Consumer loans | 877 | 0.0 | % | 876 | 0.0 | % | 772 | 0.0 | % | 560 | 0.0 | % | 467 | 0.0 | % | 646 | 0.0 | % | 324 | 0.0 | % | |||||||
Total loans | $ | 1,838,100 | 100.0 | % | $ | 1,822,305 | 100.0 | % | $ | 1,820,882 | 100.0 | % | $ | 1,854,984 | 100.0 | % | $ | 1,815,540 | 100.0 | % | $ | 1,765,439 | 100.0 | % | $ | 1,767,250 | 100.0 | % |
Less: Allowance for loan credit losses | (18,481) | (18,433) | (18,671) | (19,543) | (20,036) | (20,629) | (21,619) | |||||||||||||||||||||
Net deferred loan costs (fees) | 4,498 | 4,882 | 5,049 | 4,983 | 4,592 | 4,362 | 4,022 | |||||||||||||||||||||
Net loans | $ | 1,824,117 | $ | 1,808,754 | $ | 1,807,260 | $ | 1,840,424 | $ | 1,800,096 | $ | 1,749,172 | $ | 1,749,653 | ||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||||||
Deposits | $
| % of
| $
| % of
| $
| % of
| $
| % of
| $
| % of
| $
| % of
| $
| % of
| ||||||||||||||
Non-interest bearing demand deposits | $ | 472,422 | 24.4 | % | $ | 437,169 | 22.8 | % | $ | 404,669 | 21.3 | % | $ | 411,374 | 21.6 | % | $ | 437,880 | 22.1 | % | $ | 433,931 | 21.2 | % | $ | 447,450 | 21.4 | % |
Interest-bearing demand deposits: | ||||||||||||||||||||||||||||
NOW accounts(1) | 324,660 | 16.8 | % | 321,702 | 16.8 | % | 318,445 | 16.8 | % | 297,321 | 15.6 | % | 345,522 | 17.4 | % | 311,225 | 15.2 | % | 284,872 | 13.7 | % | |||||||
Money market accounts(1) | 360,725 | 18.6 | % | 346,249 | 18.1 | % | 326,135 | 17.1 | % | 310,650 | 16.3 | % | 330,297 | 16.6 | % | 341,413 | 16.7 | % | 392,962 | 18.8 | % | |||||||
Savings accounts | 43,779 | 2.3 | % | 45,884 | 2.4 | % | 50,664 | 2.7 | % | 52,061 | 2.8 | % | 57,408 | 3.0 | % | 68,013 | 3.4 | % | 81,150 | 3.9 | % | |||||||
Certificates of deposit | ||||||||||||||||||||||||||||
$250,000 or more | 334,591 | 17.3 | % | 339,908 | 17.8 | % | 355,766 | 18.7 | % | 357,768 | 18.7 | % | 364,805 | 18.4 | % | 376,899 | 18.4 | % | 338,824 | 16.2 | % | |||||||
Less than $250,000 | 86,932 | 4.5 | % | 91,258 | 4.8 | % | 99,694 | 5.2 | % | 101,567 | 5.3 | % | 103,600 | 5.2 | % | 105,956 | 5.2 | % | 94,429 | 4.5 | % | |||||||
QwickRate® certificates of deposit | 4,119 | 0.2 | % | 4,119 | 0.2 | % | 5,117 | 0.3 | % | 9,686 | 0.5 | % | 11,526 | 0.6 | % | 12,772 | 0.6 | % | 16,952 | 0.8 | % | |||||||
IntraFi® certificates of deposit | 32,801 | 1.7 | % | 32,922 | 1.7 | % | 34,443 | 1.8 | % | 45,748 | 2.4 | % | 41,659 | 2.1 | % | 49,729 | 2.4 | % | 53,178 | 2.5 | % | |||||||
Brokered deposits | 276,121 | 14.3 | % | 293,629 | 15.4 | % | 306,057 | 16.1 | % | 320,425 | 16.8 | % | 288,926 | 14.6 | % | 346,371 | 16.9 | % | 378,825 | 18.2 | % | |||||||
Total deposits | $ | 1,936,150 | 100.0 | % | $ | 1,912,840 | 100.0 | % | $ | 1,900,990 | 100.0 | % | $ | 1,906,600 | 100.0 | % | $ | 1,981,623 | 100.0 | % | $ | 2,046,309 | 100.0 | % | $ | 2,088,642 | 100.0 | % |
Borrowings | ||||||||||||||||||||||||||||
Federal funds purchased | $ | - - | 0.0 | % | $ | - - | 0.0 | % | $ | - - | 0.0 | % | $ | 10,000 | 11.3 | % | $ | - - | 0.0 | % | $ | - - | 0.0 | % | $ | - - | 0.0 | % |
Federal Home Loan Bank advances | 56,000 | 69.3 | % | - - | 0.0 | % | - - | 0.0 | % | - - | 0.0 | % | - - | 0.0 | % | - - | 0.0 | % | - - | 0.0 | % | |||||||
Federal Reserve Bank borrowings | - - | 0.0 | % | 77,000 | 75.7 | % | 77,000 | 75.7 | % | 54,000 | 60.9 | % | 54,000 | 68.6 | % | 54,000 | 68.6 | % | - - | 0.0 | % | |||||||
Subordinated debt, net | 24,770 | 30.7 | % | 24,749 | 24.3 | % | 24,729 | 24.3 | % | 24,708 | 27.8 | % | 24,687 | 31.4 | % | 24,666 | 31.4 | % | 24,645 | 100.0 | % | |||||||
Total borrowings | $ | 80,770 | 100.0 | % | $ | 101,749 | 100.0 | % | $ | 101,729 | 100.0 | % | $ | 88,708 | 100.0 | % | $ | 78,687 | 100.0 | % | $ | 78,666 | 100.0 | % | $ | 24,645 | 100.0 | % |
Total deposits and borrowings | $ | 2,016,920 | $ | 2,014,589 | $ | 2,002,719 | $ | 1,995,308 | $ | 2,060,310 | $ | 2,124,975 | $ | 2,113,287 | ||||||||||||||
Core customer funding sources (2) | $ | 1,655,910 | 83.1 | % | $ | 1,615,092 | 81.2 | % | $ | 1,589,816 | 80.4 | % | $ | 1,576,489 | 80.0 | % | $ | 1,681,171 | 82.6 | % | $ | 1,687,166 | 80.3 | % | $ | 1,692,865 | 81.1 | % |
Wholesale funding sources (3) | 336,240 | 16.9 | % | 374,748 | 18.8 | % | 388,174 | 19.6 | % | 394,111 | 20.0 | % | 354,452 | 17.4 | % | 413,143 | 19.7 | % | 395,777 | 18.9 | % | |||||||
Total funding sources | $ | 1,992,150 | 100.0 | % | $ | 1,989,840 | 100.0 | % | $ | 1,977,990 | 100.0 | % | $ | 1,970,600 | 100.0 | % | $ | 2,035,623 | 100.0 | % | $ | 2,100,309 | 100.0 | % | $ | 2,088,642 | 100.0 | % |
| ______________________ | |
(1) | Includes IntraFi® accounts. |
(2) | Includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits, which are maintained by customers. |
(3) | Consists of QwickRate® certificates of deposit, brokered deposits, federal funds purchased, Federal Home Loan Bank advances and Federal Reserve Bank borrowings. |
John Marshall Bancorp, Inc. | |||||||||||||||||
Average Balance Sheets, Interest and Rates (unaudited) | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||||||||
Interest Income / | Average | Interest Income / | Average | ||||||||||||||
(Dollars in thousands) | Average Balance | Expense | Rate | Average Balance | Expense | Rate | |||||||||||
Assets: | |||||||||||||||||
Securities: | |||||||||||||||||
Taxable | $ | 257,272 | $ | 3,864 | 2.01 | % | $ | 401,623 | $ | 6,117 | 2.04 | % | |||||
Tax-exempt(1) | 1,379 | 34 | 3.29 | % | 2,678 | 56 | 2.80 | % | |||||||||
Total securities | $ | 258,651 | $ | 3,898 | 2.01 | % | $ | 404,301 | $ | 6,173 | 2.04 | % | |||||
Loans, net of unearned income(2): | |||||||||||||||||
Taxable | 1,802,807 | 70,858 | 5.25 | % | 1,748,904 | 62,664 | 4.79 | % | |||||||||
Tax-exempt(1) | 18,901 | 546 | 3.86 | % | 28,319 | 875 | 4.13 | % | |||||||||
Total loans, net of unearned income | $ | 1,821,708 | $ | 71,404 | 5.24 | % | $ | 1,777,223 | $ | 63,539 | 4.78 | % | |||||
Interest-bearing deposits in other banks | $ | 168,979 | $ | 6,958 | 5.50 | % | $ | 119,002 | $ | 4,654 | 5.23 | % | |||||
Total interest-earning assets | $ | 2,249,338 | $ | 82,260 | 4.88 | % | $ | 2,300,526 | $ | 74,366 | 4.32 | % | |||||
Total non-interest earning assets | 16,133 | 36,572 | |||||||||||||||
Total assets | $ | 2,265,471 | $ | 2,337,098 | |||||||||||||
Liabilities & Shareholders' Equity: | |||||||||||||||||
Interest-bearing deposits | |||||||||||||||||
NOW accounts | $ | 312,255 | $ | 6,533 | 2.79 | % | $ | 291,217 | $ | 4,484 | 2.06 | % | |||||
Money market accounts | 340,362 | 8,190 | 3.21 | % | 374,053 | 7,560 | 2.70 | % | |||||||||
Savings accounts | 50,060 | 529 | 1.41 | % | 75,273 | 673 | 1.20 | % | |||||||||
Time deposits | 773,537 | 26,232 | 4.53 | % | 855,076 | 20,873 | 3.26 | % | |||||||||
Total interest-bearing deposits | $ | 1,476,214 | $ | 41,484 | 3.75 | % | $ | 1,595,619 | $ | 33,590 | 2.81 | % | |||||
Federal funds purchased | 37 | 2 | 7.22 | % | 294 | 10 | 4.55 | % | |||||||||
Subordinated debt | 24,737 | 1,047 | 5.65 | % | 24,653 | 1,047 | 5.68 | % | |||||||||
Federal Reserve Bank borrowings | 68,543 | 2,451 | 4.78 | % | 27,494 | 1,001 | 4.86 | % | |||||||||
Federal Home Loan Bank advances | 5,723 | 174 | 4.06 | % | 1,989 | 67 | 4.50 | % | |||||||||
Total interest-bearing liabilities | $ | 1,575,254 | $ | 45,158 | 3.83 | % | $ | 1,650,049 | $ | 35,715 | 2.89 | % | |||||
Demand deposits | 436,147 | 447,778 | |||||||||||||||
Other liabilities | 17,489 | 18,483 | |||||||||||||||
Total liabilities | $ | 2,028,890 | $ | 2,116,310 | |||||||||||||
Shareholders' equity | $ | 236,581 | $ | 220,788 | |||||||||||||
Total liabilities and shareholders' equity | $ | 2,265,471 | $ | 2,337,098 | |||||||||||||
Tax-equivalent net interest income and spread (Non-GAAP)(1) | $ | 37,102 | 1.06 | % | $ | 38,651 | 1.43 | % | |||||||||
Less: tax-equivalent adjustment | 122 | 195 | |||||||||||||||
Net interest income and spread (GAAP) | $ | 36,980 | 1.05 | % | $ | 38,456 | 1.40 | % | |||||||||
Interest income/earning assets | 4.88 | % | 4.29 | % | |||||||||||||
Interest expense/earning assets | 2.68 | % | 2.08 | % | |||||||||||||
Net interest margin | 2.20 | % | 2.21 | % | |||||||||||||
Tax-equivalent interest income/earning assets (Non-GAAP)(1) | 4.88 | % | 4.32 | % | |||||||||||||
Interest expense/earning assets | 2.68 | % | 2.08 | % | |||||||||||||
Tax-equivalent net interest margin (Non-GAAP)(3) | 2.20 | % | 2.24 | % | |||||||||||||
| ________________ | |
(1) | Tax-equivalent income and related measures have been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $122 thousand and $195 thousand for the nine months ended September 30, 2024 and September 30, 2023, respectively. |
(2) | The Company did not have any loans on non-accrual as of September 30, 2024 and September 30, 2023. |
(3) | Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components. |
John Marshall Bancorp, Inc. | |||||||||||||||||
Average Balance Sheets, Interest and Rates (unaudited) | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||||||||
Interest Income / | Average | Interest Income / | Average | ||||||||||||||
(Dollars in thousands) | Average Balance | Expense | Rate | Average Balance | Expense | Rate | |||||||||||
Assets: | |||||||||||||||||
Securities: | |||||||||||||||||
Taxable | $ | 247,975 | $ | 1,235 | 1.98 | % | $ | 308,723 | $ | 1,582 | 2.03 | % | |||||
Tax-exempt(1) | 1,379 | 11 | 3.17 | % | 1,684 | 13 | 3.06 | % | |||||||||
Total securities | $ | 249,354 | $ | 1,246 | 1.99 | % | $ | 310,407 | $ | 1,595 | 2.04 | % | |||||
Loans, net of unearned income(2): | |||||||||||||||||
Taxable | 1,801,422 | 24,173 | 5.34 | % | 1,762,653 | 21,695 | 4.88 | % | |||||||||
Tax-exempt(1) | 17,050 | 168 | 3.92 | % | 28,067 | 292 | 4.13 | % | |||||||||
Total loans, net of unearned income | $ | 1,818,472 | $ | 24,341 | 5.33 | % | $ | 1,790,720 | $ | 21,987 | 4.87 | % | |||||
Interest-bearing deposits in other banks | $ | 209,601 | $ | 2,878 | 5.46 | % | $ | 200,515 | $ | 2,746 | 5.43 | % | |||||
Total interest-earning assets | $ | 2,277,427 | $ | 28,465 | 4.97 | % | $ | 2,301,642 | $ | 26,328 | 4.54 | % | |||||
Total non-interest earning assets | 14,958 | 29,761 | |||||||||||||||
Total assets | $ | 2,292,385 | $ | 2,331,403 | |||||||||||||
Liabilities & Shareholders' Equity: | |||||||||||||||||
Interest-bearing deposits | |||||||||||||||||
NOW accounts | $ | 319,463 | 2,321 | 2.89 | % | $ | 327,309 | $ | 2,239 | 2.71 | % | ||||||
Money market accounts | 374,141 | 3,068 | 3.26 | % | 341,672 | 2,609 | 3.03 | % | |||||||||
Savings accounts | 45,980 | 168 | 1.45 | % | 63,956 | 198 | 1.23 | % | |||||||||
Time deposits | 738,680 | 8,545 | 4.60 | % | 849,270 | 8,227 | 3.84 | % | |||||||||
Total interest-bearing deposits | $ | 1,478,264 | $ | 14,102 | 3.80 | % | $ | 1,582,207 | $ | 13,273 | 3.33 | % | |||||
Federal funds purchased | - | - | N/M | 99 | - | NM | |||||||||||
Subordinated debt | 24,758 | 349 | 5.61 | % | 24,674 | 349 | 5.61 | % | |||||||||
Federal Reserve Bank borrowings | 53,565 | 647 | 4.81 | % | 54,000 | 662 | 4.86 | % | |||||||||
Federal Home Loan Bank advances | 17,044 | 174 | 4.06 | % | - | - | NM | ||||||||||
Total interest-bearing liabilities | $ | 1,573,631 | $ | 15,272 | 3.86 | % | $ | 1,660,980 | $ | 14,284 | 3.41 | % | |||||
Demand deposits | 461,337 | 430,727 | |||||||||||||||
Other liabilities | 16,808 | 19,223 | |||||||||||||||
Total liabilities | $ | 2,051,776 | $ | 2,110,930 | |||||||||||||
Shareholders' equity | $ | 240,609 | $ | 220,473 | |||||||||||||
Total liabilities and shareholders' equity | $ | 2,292,385 | $ | 2,331,403 | |||||||||||||
Tax-equivalent net interest income and spread (Non-GAAP)(1) | $ | 13,193 | 1.11 | % | $ | 12,044 | 1.13 | % | |||||||||
Less: tax-equivalent adjustment | 37 | 65 | |||||||||||||||
Net interest income and spread (GAAP) | $ | 13,156 | 1.11 | % | $ | 11,979 | 1.12 | % | |||||||||
Interest income/earning assets | 4.97 | % | 4.53 | % | |||||||||||||
Interest expense/earning assets | 2.67 | % | 2.46 | % | |||||||||||||
Net interest margin | 2.30 | % | 2.07 | % | |||||||||||||
Tax-equivalent interest income/earning assets (Non-GAAP)(1) | 4.97 | % | 4.54 | % | |||||||||||||
Interest expense/earning assets | 2.67 | % | 2.46 | % | |||||||||||||
Tax-equivalent net interest margin (Non-GAAP)(3) | 2.30 | % | 2.08 | % | |||||||||||||
| ___________________ | |
(1) | Tax-equivalent income and related measures have been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $37 thousand and $65 thousand for the three months ended September 30, 2024 and September 30, 2023, respectively. |
(2) | The Company did not have any loans on non-accrual as of September 30, 2024 and September 30, 2023. |
(3) | Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components. |
John Marshall Bancorp, Inc. | ||||||||||
Reconciliation of Certain Non-GAAP Financial Measures (unaudited) | ||||||||||
(Dollar amounts in thousands) | ||||||||||
As of | ||||||||||
September 30, 2024 | December 31, 2023 | September 30, 2023 | ||||||||
Regulatory Ratios (Bank) | ||||||||||
Total risk-based capital (GAAP) | $ | 291,881 | $ | 282,082 | $ | 280,891 | ||||
Less: Unrealized losses on available-for-sale securities, net of tax benefit (1) | 9,304 | 12,401 | 17,143 | |||||||
Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1) | 10,285 | 12,469 | 16,285 | |||||||
Adjusted total risk-based capital, excluding unrealized losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP) | $ | 272,292 | $ | 257,212 | $ | 247,463 | ||||
Tier 1 capital (GAAP) | $ | 273,529 | $ | 263,637 | $ | 261,666 | ||||
Less: Unrealized losses on available-for-sale securities, net of tax benefit (1) | 9,304 | 12,401 | 17,143 | |||||||
Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1) | 10,285 | 12,469 | 16,285 | |||||||
Adjusted tier 1 capital, excluding unrealized losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP) | $ | 253,940 | $ | 238,767 | $ | 228,238 | ||||
Risk weighted assets (GAAP) | $ | 1,787,663 | $ | 1,794,769 | $ | 1,794,603 | ||||
Less: Risk weighted available-for-sale securities | 21,440 | 24,184 | 25,094 | |||||||
Less: Risk weighted held-to-maturity securities | 16,618 | 17,079 | 17,229 | |||||||
Adjusted risk weighted assets, excluding available-for-sale and held-to-maturity securities (Non-GAAP) | $ | 1,749,605 | $ | 1,753,506 | $ | 1,752,280 | ||||
Total average assets for leverage ratio (GAAP) | $ | 2,290,205 | $ | 2,274,911 | $ | 2,326,722 | ||||
Less: Unrealized losses on available-for-sale securities, net of tax benefit (1) | 9,304 | 12,401 | 206,116 | |||||||
Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1) | 10,285 | 12,469 | 96,988 | |||||||
Adjusted total average assets for leverage ratio, excluding available-for-sale and held-to-maturity securities (Non-GAAP) | $ | 2,270,616 | $ | 2,250,041 | $ | 2,023,618 | ||||
Total risk-based capital ratio (2) | ||||||||||
Total risk-based capital ratio (GAAP) | 16.3 | % | 15.7 | % | 15.7 | % | ||||
Adjusted total risk-based capital ratio (Non-GAAP) (3) | 15.6 | % | 14.7 | % | 14.1 | % | ||||
Tier 1 capital ratio (4) | ||||||||||
Tier 1 risk-based capital ratio (GAAP) | 15.3 | % | 14.7 | % | 14.6 | % | ||||
Adjusted tier 1 risk-based capital ratio (Non-GAAP) (5) | 14.5 | % | 13.5 | % | 12.9 | % | ||||
Common equity tier 1 ratio (6) | ||||||||||
Common equity tier 1 ratio (GAAP) | 15.3 | % | 14.7 | % | 14.6 | % | ||||
Adjusted common equity tier 1 ratio (Non-GAAP) (7) | 14.5 | % | 13.5 | % | 12.9 | % | ||||
Leverage ratio (8) | ||||||||||
Leverage ratio (GAAP) | 11.9 | % | 11.6 | % | 11.3 | % | ||||
Adjusted leverage ratio (Non-GAAP) (9) | 11.2 | % | 10.6 | % | 11.3 | % | ||||
| ___________________ | |
(1) | Includes tax benefit calculated using the federal statutory tax rate of 21%. |
(2) | The total risk-based capital ratio is calculated by dividing total risk-based capital by risk weighted assets. |
(3) | The adjusted total risk-based capital ratio is calculated by dividing adjusted total risk-based capital by adjusted risk weighted assets. |
(4) | The tier 1 capital ratio is calculated by dividing tier 1 capital by risk weighted assets. |
(5) | The adjusted tier 1 capital ratio is calculated by dividing adjusted tier 1 capital by adjusted risk weighted assets. |
(6) | The common equity tier 1 ratio is calculated by dividing tier 1 capital by risk weighted assets. |
(7) | The adjusted common equity tier 1 ratio is calculated by dividing adjusted tier 1 capital by adjusted risk weighted assets. |
(8) | The leverage ratio is calculated by dividing tier 1 capital by total average assets for leverage ratio. |
(9) | The adjusted leverage ratio is calculated by dividing adjusted tier 1 capital by adjusted total average assets for leverage ratio. |
John Marshall Bancorp, Inc. | |||||||||||||
Reconciliation of Certain Non-GAAP Financial Measures (unaudited) | |||||||||||||
(Dollar amounts in thousands, except per share data) | |||||||||||||
For the Three
| For the Nine
| ||||||||||||
September 30, 2023 | September 30, 2023 | ||||||||||||
Non-interest income (loss) (GAAP) | $ | (16,815 | ) | $ | (15,564 | ) | |||||||
Adjustment: Pre-tax loss recognized on sale of available-for-sale securities | 17,114 | 17,114 | |||||||||||
Core non-interest income (Non-GAAP) | $ | 299 | $ | 1,550 | |||||||||
Income (loss) before taxes (GAAP) | $ | (11,667 | ) | $ | 2,102 | ||||||||
Adjustment: Pre-tax loss recognized on sale of available-for-sale securities | 17,114 | 17,114 | |||||||||||
Core income before taxes (Non-GAAP) | $ | 5,447 | $ | 19,216 | |||||||||
Income tax expense (benefit) (GAAP) | $ | (1,530 | ) | $ | 1,446 | ||||||||
Adjustment: Tax and 10% modified endowment contract penalty on early surrender of BOLI policies | (1,101 | ) | (1,101 | ) | |||||||||
Adjustment: Tax benefit of loss recognized on sale of available-for-sale securities | 3,594 | 3,594 | |||||||||||
Core income tax expense (Non-GAAP)(1) | $ | 963 | $ | 3,939 | |||||||||
Net income (loss) (GAAP) | $ | (10,137 | ) | $ | 656 | ||||||||
Core net income (Non-GAAP)(2) | $ | 4,484 | $ | 15,277 | |||||||||
Earnings (loss) per share - basic (GAAP) | $ | (0.72 | ) | $ | 0.05 | ||||||||
Core earnings per share - basic (Non-GAAP)(3) | $ | 0.32 | $ | 1.08 | |||||||||
Earnings (loss) per share - diluted (GAAP) | $ | (0.72 | ) | $ | 0.05 | ||||||||
Core earnings per share - diluted (Non-GAAP)(3) | $ | 0.32 | $ | 1.08 | |||||||||
Return on average assets (annualized) (GAAP) | (1.73 | )% | 0.04 | ||||||||||
Core return on average assets (annualized) (Non-GAAP)(4) | 0.76 | % | 0.87 | ||||||||||
Return on average equity (annualized) (GAAP) | (18.24 | )% | 0.40 | ||||||||||
Core return on average equity (annualized) (Non-GAAP)(5) | 8.07 | % | 9.25 | ||||||||||
Non-interest income (loss) as a percentage of average assets (annualized) (GAAP) | (2.86 | )% | (0.89 | ) | |||||||||
Core non-interest income as a percentage of average assets (annualized) (Non-GAAP)(6) | 0.05 | % | 0.09 | ||||||||||
Efficiency ratio (GAAP) | (158.4 | )% | 101.6 | ||||||||||
Core efficiency ratio (Non-GAAP)(7) | 62.4 | % | 58.1 | ||||||||||
For the Three Months Ended | |||||||||||||
September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
Pre-tax, pre-provision earnings (Non-GAAP) | |||||||||||||
Income before income taxes | $ | 5,342 | $ | 5,019 | $ | 5,414 | |||||||
Adjustment: Provision for (recovery of) credit losses | 400 | (292 | ) | (776 | ) | ||||||||
Pre-tax, pre-provision earnings (Non-GAAP)(8) | $ | 5,742 | $ | 4,727 | $ | 4,638 | |||||||
| _____________________ | |
(1) | Includes tax benefit (expense) calculated using the federal statutory tax rate of 21%. |
(2) | Core net income reflects net income adjusted for the non-recurring tax effected loss recognized on the sale of available-for-sale securities in and non-recurring tax expense associated with the surrender of the Company's BOLI policies in July 2023. It is calculated by subtracting core income tax expense from core income before taxes for each period presented. |
(3) | Core earnings per share - basic and core earnings per share - diluted is calculated by dividing core net income by basic weighted average shares outstanding and diluted weighted average shares outstanding, respectively, for each period presented. |
(4) | Core return on average assets (annualized) is calculated by dividing annualizing core net income by average assets for each period presented. |
(5) | Core return on average equity (annualized) is calculated by dividing annualizing core net income by average equity for each period presented. |
(6) | Core non-interest income as a percentage of average assets (annualized) is calculated by dividing annualized core non-interest income by average assets for each period presented. |
(7) | Core efficiency ratio is calculated by dividing non-interest expense by the sum of core non-interest income and net interest income for each period presented. |
(8) | Pre-tax, pre-provision earnings is calculated by adjusting income before taxes for provision for (recovery of) credit losses. |
Category: Earnings
Contacts
Christopher W. Bergstrom, (703) 584-0840
Kent D. Carstater, (703) 289-5922
