John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”),
parent company of John Marshall Bank (the “Bank”), reported its
financial results for the three and twelve months ended December
31, 2023.
Selected Highlights
- Higher Net Interest Margin – Net interest margin was
2.12% for the three months ended December 31, 2023 compared to
2.08% for the three months ended September 30, 2023. During the
third quarter, we repositioned the balance sheet by shedding $183.1
million of lower-yielding assets. During the fourth quarter, we
continued to originate and reprice loans at generally higher yields
and slow the rate of increase in our funding costs. As of December
31, 2023, the Company believes it is well-positioned for the lower
interest rate environment implied by interest rate futures.
- Strong Loan Growth – Loans, net of unearned income, grew
$39.8 million or 8.7% annualized from September 30, 2023 to
December 31, 2023. Loans, net of unearned income, grew $90.2
million or 10.1% annualized from June 30, 2023 to December 31,
2023. The Company remains selective on credit and continues to
pursue opportunities where we can obtain an appropriate
risk-adjusted return. We continue to see new lending opportunities
that meet our underwriting standards as some of our competitors
have scaled back lending efforts.
- Pristine Asset Quality – For the seventeenth consecutive
quarter, the Company had no nonperforming 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.
- Stable Profitability – Reported net income was $4.5
million for the three months ended December 31, 2023 and the three
months ended June 30, 2023. Excluding the non-recurring loss on
securities, net of tax and non-recurring taxes and penalties on the
early surrender of Bank Owned Life Insurance policies (the
“Restructuring”), previously disclosed in our July 21, 2023
earnings release, the Company’s core net income (Non-GAAP) for each
of the last three quarters was approximately $4.5 million during a
challenging economic environment. The reported loss of $10.1
million for the three months ended September 30, 2023 resulted
primarily from the Restructuring. The Company’s balance sheet is
well-positioned for falling rates.
- Competitive Shareholder Returns – From December 31, 2022
to December 31, 2023, the Company increased book value per share
from $15.09 to $16.25. In addition to the $0.22 cash dividend paid
in July 2023, total return to shareholders for 2023 was $1.38 or an
increase of 9.2%.
- Well Capitalized – Each of the Bank’s regulatory capital
ratios is well in excess of the regulatory threshold to be
considered well capitalized. The Bank’s equity to assets and total
risk-based capital ratios were 11.1% and 15.7%, respectively, as of
December 31, 2023.
- Achieved SBA Preferred Lender Status – On December 4,
2023, the Company announced that it had been designated a preferred
lender by the U.S. Small Business Administration (“SBA”). As an SBA
preferred lender, the Company now has the authority and proven
expertise to make loan decisions without direct approval from the
SBA. This streamlined loan approval process will facilitate
commercial loan and deposit growth. In addition, we expect to
increase fee income through the sale of certain SBA loans.
Chris Bergstrom, President and Chief Executive Officer,
commented, “2023 underscored the importance of consistency of
purpose and a conservative balance sheet. If the current rate
environment prevails through April 2024, this will be the longest
inverted yield curve in the country’s history. This has exerted
significant pressures on community banks. John Marshall started and
finished the year with a strong balance sheet as demonstrated by
our robust capital position, spotless asset quality and ample
liquidity. We continued cultivating clients and prospects, while
some of our competitors chose to scale back or cease lending. Our
underwriting remained steadfast and we booked loans where we could
earn an appropriate return. We believe providing an unmatched
customer experience, regardless of the economic cycle,
differentiates us from our peers. While we were unable to produce a
fifth consecutive year of record earnings, we de-risked the balance
sheet with our July restructuring and increased our net interest
margin and core earnings. We look forward to 2024 and having the
balance sheet to capitalize on new opportunities and driving
long-term shareholder value.”
Balance Sheet, Liquidity and Credit
Quality
Total assets were $2.24 billion at December 31, 2023, $2.30
billion at September 30, 2023 and $2.35 billion at December 31,
2022.
Total loans, net of unearned income, increased $70.5 million or
3.9% to $1.86 billion at December 31, 2023, compared to $1.79
billion at December 31, 2022 and increased $39.8 million during the
quarter ended December 31, 2023 or 8.7% annualized from $1.82
billion at September 30, 2023. Detail on the loan growth can be
seen in the attached tables.
The carrying value of the Company’s fixed income securities
portfolio was $265.5 million at December 31, 2023, $265.4 million
at September 30, 2023 and $457.0 million at December 31, 2022. The
reduction in the portfolio resulted primarily from the
Restructuring. As of December 31, 2023, 96.1% of our bond portfolio
was covered by the implied guarantee of the United States
government or one of its agencies. At December 31, 2023, nearly
61.0% of the fixed income portfolio was invested in amortizing
bonds, which provides the Company with a source of steady cash
flow. At December 31, 2023, the fixed income portfolio had an
estimated weighted average life of 4.3 years. The
available-for-sale portfolio comprised approximately 64.0% of the
fixed income securities portfolio and had a weighted average life
of 3.0 years at December 31, 2023. The held-to-maturity portfolio
comprised approximately 36.0% of the fixed income securities
portfolio and had a weighted average life of 6.7 years at December
31, 2023. The Company did not purchase any fixed income securities
during the three or twelve month periods ended December 31,
2023.
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 $638.9
million as of December 31, 2023 compared to $763.5 million as of
December 31, 2022 and represented 28.5% and 32.5% of total assets,
respectively. In addition to available secured borrowing capacity,
the Bank had available federal funds lines of $100.0 million at
December 31, 2023.
Total deposits were $1.91 billion at December 31, 2023, $1.98
billion at September 30, 2023 and $2.06 billion at December 31,
2022. Total deposits decreased $75.0 million or 3.8% when compared
to September 30, 2023. Detail on the deposit activity can be seen
in the attached tables. As of December 31, 2023, the Company had
$634.1 million of deposits that were not insured or not
collateralized by securities compared to $614.0 million at
September 30, 2023. Deposits that were not insured or not
collateralized by securities represented only 33.3% of total
deposits at December 31, 2023 compared to 31.0% at September 30,
2023.
The Company obtained a $54.0 million advance from the Bank Term
Funding Program (“BTFP”) on May 15, 2023 to secure lower funding
costs relative to wholesale deposits. The BTFP advance has a term
of one year, bears interest at a fixed rate of 4.80% and can be
prepaid without penalty prior to maturity. Total borrowings as of
December 31, 2023 consisted of subordinated debt totaling $24.7
million, the BTFP advance totaling $54.0 million, and federal funds
purchased totaling $10 million. The Company did not have any
Federal Home Loan Bank of Atlanta (“FHLB”) advances outstanding as
of December 31, 2023.
Shareholders’ equity increased $17.1 million or 8.0% to $229.9
million at December 31, 2023 compared to $212.8 million at December
31, 2022. Book value per share was $16.25 as of December 31, 2023
compared to $15.09 as of December 31, 2022, an increase of 7.7%.
The year-over-year change in book value per share was primarily due
to the Company’s earnings over the previous twelve months and
decrease in accumulated other comprehensive loss, partially offset
by increased share count from shareholder option exercises and
restricted share award issuances and dividends paid. The decrease
in accumulated other comprehensive loss was primarily attributable
to the sale of certain available-for-sale investment securities in
the July 2023 Restructuring and decreases in unrealized losses on
our available-for-sale investment portfolio due to market value
changes. Book value per share increased from $15.61 as of September
30, 2023 or 16.3% annualized.
The Bank’s capital ratios at December 31, 2023 improved when
compared to December 31, 2022 and remained well above regulatory
thresholds for well-capitalized banks. As of December 31, 2023, the
Bank’s total risk-based capital ratio was 15.7%, compared to 15.6%
at December 31, 2022 (GAAP). As outlined below, the Bank would
continue to remain well above regulatory thresholds for
well-capitalized banks at December 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 GAAP.
Bank Regulatory Capital Ratios
(As Reported)
Well- Capitalized
Threshold
December 31, 2023
December 31, 2022
Total risk-based capital ratio
10.0
%
15.7
%
15.6
%
Tier 1 risk-based capital ratio
8.0
%
14.7
%
14.4
%
Common equity tier 1 ratio
6.5
%
14.7
%
14.4
%
Leverage ratio
5.0
%
11.6
%
11.3
%
Adjusted Bank Regulatory
Capital Ratios (Hypothetical Scenario of Selling All Bonds at Fair
Market Value - Non-GAAP)
Well- Capitalized
Threshold
December 31, 2023
December 31, 2022
Adjusted total risk-based capital
ratio
10.0
%
14.7
%
13.8
%
Adjusted tier 1 risk-based capital
ratio
8.0
%
13.5
%
12.6
%
Adjusted common equity tier 1 ratio
6.5
%
13.5
%
12.6
%
Adjusted leverage ratio
5.0
%
11.9
%
11.8
%
The Company recorded no charge-offs during the fourth quarter of
2023, the third quarter of 2023 or the fourth quarter of 2022. As
of December 31, 2023, the Company had no non-accrual loans, no
loans greater than 30 days past due and no other real estate owned
assets.
At December 31, 2023, the allowance for loan credit losses was
$19.5 million or 1.05% of outstanding loans, net of unearned
income, compared to $20.0 million or 1.10% of outstanding loans,
net of unearned income, at September 30, 2023. The decrease in the
allowance as a percentage of outstanding loans, net of unearned
income, was primarily a result of improved economic forecasts used
in the quantitative portion of the model and an assessment of
management’s considerations of existing economic versus historical
conditions combined with the continued strong credit performance of
our loan portfolio segments.
At December 31, 2023, the allowance for credit losses on
unfunded loan commitments was $0.6 million compared to $0.9 million
at September 30, 2023. The decrease in the allowance for credit
losses on unfunded loan commitments was primarily the result of the
updated loss factors utilized on the funded loan portfolio and
decreases in unfunded commitments during the quarter.
The Company did not have an allowance for credit losses on
held-to-maturity securities as of December 31, 2023 or September
30, 2023.
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
portfolios as of December 31, 2023, demonstrating their strong
debt-service-coverage and loan-to-value ratios.
Commercial Real Estate
Owner Occupied
Non-owner Occupied
Asset Class
Weighted Average Loan-to-
Value(1)
Weighted Average Debt Service
Coverage Ratio(2)
Number of Total Loans
Principal Balance(3) (Dollars
in thousands)
Weighted Average Loan-to-
Value(1)
Weighted Average Debt Service
Coverage Ratio(2)
Number of Total Loans
Principal Balance(3) (Dollars
in thousands)
Warehouse & Industrial
58.2
%
3.5
x
52
$
78,485
50.8
%
2.6
x
40
$
99,618
Office
60.5
%
3.9
x
126
79,985
48.2
%
1.9
x
63
122,899
Retail
61.3
%
2.3
x
40
59,592
52.3
%
1.9
x
143
407,123
Church
31.3
%
2.7
x
19
36,452
- -
- -
- -
- -
Hotel/Motel
- -
- -
- -
- -
59.9
%
2.2
x
7
38,974
Other(4)
52.6
%
3.3
x
50
105,588
55.0
%
1.9
x
15
20,942
Total
287
$
360,102
268
$
689,556
____________________
(1)
Loan-to-value is determined at
origination date and is divided by principal balance as of December
31, 2023.
(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 $4.5 million for the fourth
quarter of 2023, a decrease of $3.7 million when compared to $8.2
million for the fourth quarter of 2022.
Net interest income for the fourth quarter of 2023 decreased
$5.5 million or 31.3% compared to the fourth quarter of 2022,
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 4.68% for the
fourth quarter of 2023 compared to 4.10% 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 portfolio and
deposits in banks as a result of increases in interest rates
subsequent to the fourth quarter of 2022. The cost of
interest-bearing liabilities was 3.64% for the fourth quarter of
2023 compared to 1.53% for the same quarter in the prior year. The
increase in the cost of interest-bearing liabilities was primarily
due to a 2.11% 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 fourth quarter of 2022. The increase in
the overall cost of interest-bearing liabilities in the fourth
quarter of 2023 relative to the same period of the prior year is
largely due to rate hikes totaling 5.25% by the Federal Reserve
Bank since the beginning of 2022, which has increased cost of funds
and compressed net interest margins across the banking industry.
The annualized net interest margin for the fourth quarter of 2023
was 2.12% as compared to 3.05% 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. With a portion of the proceeds from the Restructuring being
redeployed to higher yielding assets, the Company’s net interest
margin increased from the 2.08% reported in the third quarter
2023.
The Company recorded a $781 thousand release of provision for
credit losses for the fourth quarter of 2023 compared to a
provision of $175 thousand for the fourth quarter of 2022. The
release of provision for credit losses during the fourth quarter of
2023 was primarily a result of improved economic forecasts used in
the quantitative portion of the model and an assessment of
management’s considerations of existing economic versus historical
conditions combined with the continued strong credit performance of
our loan portfolio segments.
Non-interest income decreased $94 thousand during the fourth
quarter of 2023 compared to the fourth quarter of 2022. The
decrease in non-interest income was primarily due to a decrease in
bank owned life insurance (“BOLI”) income of $99 thousand due to
the surrender of all BOLI policies as part of the Restructuring,
decrease in swap fee income of $127 thousand and decreases in wire
and other customer transaction based fees. These decreases were
partially offset by increases in gains recorded on the sale of the
guaranteed portion of SBA 7(a) loans totaling $81 thousand and a
favorable variance of $61 thousand related to mark-to-market
adjustments on investments related to the Company’s nonqualified
deferred compensation plan when compared to the fourth quarter of
2022.
Non-interest expense increased $105 thousand or 1.4% during the
fourth quarter of 2023 compared to the fourth quarter of 2022
primarily due to increases in salaries and employee benefits,
increases in FDIC insurance expense and increases in franchise tax
expense. The increase in salaries and employee benefits was due to
higher incentive compensation expense incurred by the Company.
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. For the twelve months ended December 31,
2023, the percentage decrease in incentive compensation was
commensurate with the percentage decrease in core income before
taxes (Non-GAAP, see below for further detail). The increase in
FDIC insurance expense resulted from 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 decrease in
furniture and equipment expense was due to lower software and
equipment service expense due to contract renegotiation efforts.
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 Company continues to analyze cost savings opportunities on
existing leases and material contracts.
For the three months ended December 31, 2023, annualized
non-interest expense to average assets was 1.31% compared to 1.27%
for the three months ended December 31, 2022. The increase was
primarily due to lower average assets when comparing the two
periods.
For the three months ended December 31, 2023, the annualized
efficiency ratio was 59.7% compared to 40.9% for the three months
ended December 31, 2022. The increase was primarily due to a
decrease in net interest income.
Year-to-Date Results
The Company reported net income of $5.2 million for the twelve
months ended December 31, 2023, a decrease of $26.6 million when
compared to the same period in 2022. This decrease 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) defined as reported net income excluding the
non-recurring after-tax loss on securities sale and taxes paid in
conjunction with the surrender of the Bank’s BOLI policies
resulting from the Restructuring, was $19.8 million, a decrease of
$12.0 million when compared to the twelve months ended December 31,
2022. Reported (GAAP) and core (Non-GAAP) earnings per share,
annualized return on average assets (“ROAA”) and annualized return
on average equity (“ROAE”) were as follows:
For the Twelve Months
Ended
(Dollars in thousands, except per share
amounts)
December 31, 2023
December 31, 2022
Net income (GAAP)
$
5,158
$
31,803
Add: Loss on securities sale, net of
tax
13,520
-
Add: Non-recurring tax and 10% modified
endowment contract penalty on early surrender of BOLI policies
1,101
-
Core net income (Non-GAAP)
$
19,779
$
31,803
Earnings per share - diluted (GAAP)
$
0.36
$
2.25
Core earnings per share - diluted
(Non-GAAP)
$
1.39
$
2.25
Return on average assets (GAAP)
0.22
%
1.40
%
Core return on average assets
(Non-GAAP)
0.85
%
1.40
%
Return on average equity (GAAP)
2.32
%
15.18
%
Core return on average equity
(Non-GAAP)
8.91
%
15.18
%
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.
Net interest income for the twelve months ended December 31,
2023 decreased $19.9 million or 28.3% compared to the same period
of 2022, 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
4.41% for the twelve months ended December 31, 2023 compared to
3.77% 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 third
quarter of 2022. The cost of interest-bearing liabilities was 3.08%
for the twelve months ended December 31, 2023 compared to 0.89% for
the twelve months ended December 31, 2022. The increase in the cost
of interest-bearing liabilities was primarily due to a 2.21%
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 fourth quarter of 2022. The annualized net
interest margin for the twelve months ended December 31, 2023 was
2.22% as compared to 3.16% 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 $3.3 million release of provision for
credit losses for the twelve months ended December 31, 2023
compared to $175 thousand provision for the twelve months ended
December 31, 2022. The release of provision for credit losses
during 2023 was primarily a result of changes in the Company’s loss
driver analysis, resulting from a periodic review of our
assumptions and improved economic forecasts used in the
quantitative portion of the model and assessment of management’s
considerations of existing economic versus historical conditions
combined with the continued strong credit performance of our loan
portfolio segments.
Non-interest income decreased $16.6 million during the twelve
months ended December 31, 2023 compared to the same period in 2022.
The decrease in non-interest income was primarily due to the
Restructuring that resulted in a loss of $17.1 million. Core
non-interest income (Non-GAAP) increased $483 thousand primarily
due to favorable variances of $671 thousand as a result of
mark-to-market adjustments on investments related to the Company’s
nonqualified deferred compensation plan. The Company also had an
increase in other service charges and fee income of $182 thousand
primarily as a result of penalty fee income recognized on the early
withdrawal of certificates of deposit, and gains recorded on the
sale of the guaranteed portion of SBA 7(a) loans totaling $131
thousand. These increases were partially offset by a decrease in
BOLI income of $320 thousand due to the surrender of all BOLI
policies as part of the Restructuring.
Non-interest expense decreased $1.1 million or 3.3% during the
twelve months ended December 31, 2023 compared to the same period
in 2022 primarily due to decreases in salaries and employee
benefits expense. The decrease in salaries and employee benefits
was primarily due to a reduction in incentive related compensation
accruals year-over-year. The decrease in other expense was the
result of a favorable verdict received by the Company on a
multi-year legal matter that was resolved during the year and lower
legal and consulting expenses, partially offset by increases in
FDIC insurance expense, franchise tax expense and marketing
expense. The increase in FDIC insurance expense resulted from 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 marketing expense was due to increased marketing and
promotional activity. 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 and lower software and equipment service expense due to
contract renegotiation efforts.
For the twelve months ended December 31, 2023, annualized
non-interest expense to average assets was 1.33% compared to 1.40%
for the twelve months ended December 31, 2022. The decrease was
primarily due to lower overhead costs as a result of continued cost
consciousness.
For the twelve months ended December 31, 2023, the efficiency
ratio was 86.7% primarily due to the non-recurring securities loss
on sale recorded in connection with the Restructuring. Excluding
the effects of the Restructuring, the core efficiency ratio
(Non-GAAP) was 58.5% compared to 44.2% for the twelve months ended
December 31, 2022. The increase was primarily due to a decrease in
net interest income, which more than offset the increase in core
non-interest income (Non-GAAP) and 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 in 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 Adjusted Bank regulatory capital ratios in the hypothetical
scenario where the entire bond portfolio was sold at fair market
value and the losses realized.
- Core non-interest income, core income before taxes, core income
tax expense, core net income, core earnings per share (basic and
diluted), core return on average assets, core return on average
equity, core non-interest income as a percentage of average assets
and core efficiency ratio, which excludes the impact of losses
recognized in the Restructuring.
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.
About John Marshall Bancorp,
Inc.
John Marshall Bancorp, Inc. is the bank holding company for John
Marshall Bank. The Bank is headquartered in Reston, Virginia with
eight full-service branches located in Alexandria, Arlington,
Loudoun, Prince William, Reston, and Tysons, Virginia, as well as
Rockville, Maryland, and Washington, D.C. The Bank is dedicated to
providing exceptional value, personalized service and convenience
to local businesses and professionals in the Washington D.C. Metro
area. The Bank offers a comprehensive line of sophisticated banking
products and services that rival those of the largest banks along
with experienced staff to help achieve customers’ financial goals.
Dedicated Relationship Managers serve as direct points-of-contact,
providing subject matter expertise in a variety of niche industries
including Charter and Private Schools, Government Contractors,
Health Services, Nonprofits and Associations, Professional
Services, Property Management Companies and Title Companies. Learn
more at www.johnmarshallbank.com.
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 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 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.
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 Twelve Months
Ended
December 31,
December 31,
2023
2022
2023
2022
Selected Balance Sheet Data
Cash and cash equivalents
$
99,005
$
61,599
$
99,005
$
61,599
Total investment securities
273,302
463,531
273,302
463,531
Loans, net of unearned income
1,859,967
1,789,508
1,859,967
1,789,508
Allowance for loan credit losses
19,543
20,208
19,543
20,208
Total assets
2,242,549
2,348,235
2,242,549
2,348,235
Non-interest bearing demand deposits
411,374
476,697
411,374
476,697
Interest bearing deposits
1,495,226
1,591,043
1,495,226
1,591,043
Total deposits
1,906,600
2,067,740
1,906,600
2,067,740
Federal funds purchased
10,000
25,500
10,000
25,500
Federal Reserve Bank borrowings
54,000
- -
54,000
- -
Shareholders' equity
229,914
212,800
229,914
212,800
Summary Results of Operations
Interest income
$
26,598
$
23,557
$
100,770
$
84,066
Interest expense
14,571
6,052
50,286
13,645
Net interest income
12,027
17,505
50,484
70,421
Provision for (recovery of) credit
losses
(781
)
175
(3,252
)
175
Net interest income after provision for
(recovery of) credit losses
12,808
17,330
53,736
70,246
Non-interest income (loss)
624
718
(14,940
)
1,691
Core non-interest income(1)
624
718
2,174
1,691
Non-interest expense
7,554
7,449
30,815
31,874
Income before income taxes
5,878
10,599
7,981
40,063
Core income before income taxes(1)
5,878
10,599
25,095
40,063
Net income
4,502
8,202
5,158
31,803
Core net income(1)
4,502
8,202
19,779
31,803
Per Share Data and Shares
Outstanding
Earnings per share - basic
$
0.32
$
0.58
$
0.36
$
2.27
Core earnings per share - basic(1)
$
0.32
$
0.58
$
1.40
$
2.27
Earnings per share - diluted
$
0.32
$
0.58
$
0.36
$
2.25
Core earnings per share - diluted(1)
$
0.32
$
0.58
$
1.39
$
2.25
Book value per share
$
16.25
$
15.09
$
16.25
$
15.09
Weighted average common shares (basic)
14,082,762
14,019,429
14,115,492
13,931,841
Weighted average common shares
(diluted)
14,145,607
14,131,352
14,185,760
14,084,427
Common shares outstanding at end of
period
14,148,533
14,098,986
14,148,533
14,099,879
Performance Ratios
Return on average assets (annualized)
0.78
%
1.40
%
0.22
%
1.40
%
Core return on average assets
(annualized)(1)
0.78
%
1.40
%
0.85
%
1.40
%
Return on average equity (annualized)
7.91
%
15.65
%
2.32
%
15.18
%
Core return on average equity
(annualized)(1)
7.91
%
15.65
%
8.91
%
15.18
%
Net interest margin
2.12
%
3.05
%
2.22
%
3.16
%
Non-interest income (loss) as a percentage
of average assets (annualized)
0.11
%
0.12
%
(0.64
)%
0.07
%
Core non-interest income as a percentage
of average assets (annualized)(1)
0.11
%
0.12
%
0.09
%
0.07
%
Non-interest expense to average assets
(annualized)
1.31
%
1.27
%
1.33
%
1.40
%
Efficiency ratio
59.7
%
40.9
%
86.7
%
44.2
%
Core efficiency ratio(1)
59.7
%
40.9
%
58.5
%
44.2
%
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
1.05
%
1.13
%
1.05
%
1.13
%
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
11.1
%
10.0
%
11.1
%
10.0
%
Total risk-based capital ratio
15.7
%
15.6
%
15.7
%
15.6
%
Tier 1 risk-based capital ratio
14.7
%
14.4
%
14.7
%
14.4
%
Common equity tier 1 ratio
14.7
%
11.3
%
14.7
%
11.3
%
Leverage ratio
11.6
%
14.4
%
11.6
%
14.4
%
Other Information
Number of full time equivalent
employees
134
139
134
139
# Full service branch offices
8
8
8
8
# Loan production or limited service
branch offices
- -
1
- -
1
____________________
(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
December 31,
September 30,
December 31,
Last Three
Year Over
2023
2023
2022
Months
Year
Assets
(Unaudited)
(Unaudited)
*
Cash and due from banks
$
7,424
$
7,642
$
6,583
(2.9
)%
12.8
%
Interest-bearing deposits in banks
91,581
185,014
55,016
(50.5
)%
66.5
%
Securities available-for-sale, at fair
value
169,993
169,084
357,576
0.5
%
(52.5
)%
Securities held-to-maturity, fair value of
$79,532, $75,733, and $81,161 at 12/31/2023, 9/30/2023, and
12/31/2022, respectively.
95,505
96,347
99,415
(0.9
)%
(3.9
)%
Restricted securities, at cost
5,012
5,007
4,425
0.1
%
13.3
%
Equity securities, at fair value
2,792
2,443
2,115
14.3
%
32.0
%
Loans, net of unearned income
1,859,967
1,820,132
1,789,508
2.2
%
3.9
%
Allowance for credit losses
(19,543
)
(20,036
)
(20,208
)
(2.5
)%
(3.3
)%
Net loans
1,840,424
1,800,096
1,769,300
2.2
%
4.0
%
Bank premises and equipment, net
1,281
1,264
1,219
1.3
%
5.1
%
Accrued interest receivable
6,110
5,701
5,531
7.2
%
10.5
%
Bank owned life insurance
- -
- -
21,170
N/M
(100.0
)%
Right of use assets
4,176
4,136
4,611
1.0
%
(9.4
)%
Other assets
18,251
21,468
21,274
(15.0
)%
(14.2
)%
Total assets
$
2,242,549
$
2,298,202
$
2,348,235
(2.4
)%
(4.5
)%
Liabilities and Shareholders'
Equity
Liabilities
Deposits:
Non-interest bearing demand deposits
$
411,374
$
437,880
$
476,697
(6.1
)%
(13.7
)%
Interest-bearing demand deposits
607,971
675,819
691,945
(10.0
)%
(12.1
)%
Savings deposits
52,061
57,408
95,241
(9.3
)%
(45.3
)%
Time deposits
835,194
810,516
803,857
3.0
%
3.9
%
Total deposits
1,906,600
1,981,623
2,067,740
(3.8
)%
(7.8
)%
Federal funds purchased
10,000
- -
25,500
N/M
%
(60.8
)%
Federal Reserve Bank borrowings
54,000
54,000
- -
-
N/M
Subordinated debt, net
24,708
24,687
24,624
0.1
%
0.3
%
Accrued interest payable
4,559
2,610
1,035
74.7
%
340.5
%
Lease liabilities
4,446
4,415
4,858
0.7
%
(8.5
)%
Other liabilities
8,322
10,300
11,678
(19.2
)%
(28.7
)%
Total liabilities
2,012,635
2,077,635
2,135,435
(3.1
)%
(5.8
)%
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,
14,148,533 at 12/31/2023 including 47,318 unvested shares, issued
and outstanding, 14,126,084 at 9/30/2023 including 45,871 unvested
shares, and 14,098,986 at 12/31/2022 including 55,185 unvested
shares
141
141
141
- -
%
- -
%
Additional paid-in capital
95,636
95,510
94,726
0.1
%
1.0
%
Retained earnings
146,388
141,886
146,630
3.2
%
(0.2
)%
Accumulated other comprehensive loss
(12,251
)
(16,970
)
(28,697
)
(27.8
)%
(57.3
)%
Total shareholders' equity
229,914
220,567
212,800
4.2
%
8.0
%
Total liabilities and shareholders'
equity
$
2,242,549
$
2,298,202
$
2,348,235
(2.4
)%
(4.5
)%
* 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
Twelve Months Ended
December 31
December 31
2023
2022
% Change
2023
2022
% Change
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Interest and Dividend Income
Interest and fees on loans
$
23,080
$
20,541
12.4
%
$
86,435
$
74,281
16.4
%
Interest on investment securities,
taxable
1,310
2,337
(43.9
)%
7,206
7,934
(9.2
)%
Interest on investment securities,
tax-exempt
9
30
(70.0
)%
53
120
(55.8
)%
Dividends
78
64
21.9
%
300
249
20.5
%
Interest on deposits in other banks
2,121
585
N/M
6,776
1,482
N/M
Total interest and dividend income
26,598
23,557
12.9
%
100,770
84,066
19.9
%
Interest Expense
Deposits
13,577
5,688
N/M
47,168
11,778
N/M
Federal funds purchased
5
15
N/M
15
15
- -
%
Federal Home Loan Bank advances
- -
- -
N/M
67
42
59.5
%
Federal Reserve Bank borrowings
640
- -
N/M
1,640
- -
N/M
Subordinated debt
349
349
- -
%
1,396
1,810
(22.9
)%
Total interest expense
14,571
6,052
140.8
%
50,286
13,645
268.5
%
Net interest income
12,027
17,505
(31.3
)%
50,484
70,421
(28.3
)%
Provision for (recovery of) Credit
Losses
(781
)
175
N/M
(3,252
)
175
N/M
Net interest income after provision for
(recovery of) credit losses
12,808
17,330
(26.1
)%
53,736
70,246
(23.5
)%
Non-interest Income
Service charges on deposit accounts
91
84
8.3
%
330
324
1.9
%
Bank owned life insurance
- -
99
(100.0
)%
224
544
(58.8
)%
Other service charges and fees
161
187
(13.9
)%
838
656
27.7
%
Losses on sale of available-for-sale
securities
- -
- -
N/M
(17,316
)
- -
N/M
Insurance commissions
76
70
8.6
%
386
382
1.0
%
Gain on sale of government guaranteed
loans
81
- -
N/M
131
- -
N/M
Non-qualified deferred compensation plan
asset gains (losses), net
205
145
41.4
%
317
(354
)
N/M
Other income
10
133
(92.5
)%
150
139
7.9
%
Total non-interest income (loss)
624
718
(13.1
)%
(14,940
)
1,691
N/M
Non-interest Expenses
Salaries and employee benefits
4,507
4,436
1.6
%
19,436
20,190
(3.7
)%
Occupancy expense of premises
448
458
(2.2
)%
1,811
1,893
(4.3
)%
Furniture and equipment expenses
296
336
(11.9
)%
1,178
1,325
(11.1
)%
Other expenses
2,303
2,219
3.8
%
8,390
8,466
(0.9
)%
Total non-interest expenses
7,554
7,449
1.4
%
30,815
31,874
(3.3
)%
Income before income taxes
5,878
10,599
(44.5
)%
7,981
40,063
(80.1
)%
Income Tax Expense
1,376
2,397
(42.6
)%
2,823
8,260
(65.8
)%
Net income
$
4,502
$
8,202
(45.1
)%
$
5,158
$
31,803
(83.8
)%
Earnings Per Share
Basic
$
0.32
$
0.58
(44.8
)%
$
0.36
$
2.27
(84.2
)%
Diluted
$
0.32
$
0.58
(44.8
)%
$
0.36
$
2.25
(84.0
)%
John Marshall Bancorp,
Inc.
Historical Trends - Quarterly
Financial Data (Unaudited)
(Dollar amounts in thousands,
except per share data)
2023
2022
December 31
September 30
June 30
March 31
December 31
September 30
June 30
March 31
Profitability for the Quarter:
Interest income
$
26,598
$
26,263
$
24,455
$
23,453
$
23,557
$
21,208
$
19,555
$
19,745
Interest expense
14,571
14,284
12,446
8,984
6,052
3,516
2,247
1,829
Net interest income
12,027
11,979
12,009
14,469
17,505
17,692
17,308
17,916
Provision for (recovery of) credit
losses
(781
)
(829
)
(868
)
(774
)
175
- -
- -
- -
Non-interest income (loss)
624
(16,815
)
685
566
718
450
109
414
Non-interest expenses
7,554
7,660
7,831
7,770
7,449
7,958
7,681
8,786
Income (loss) before income taxes
5,878
(11,667
)
5,731
8,039
10,599
10,184
9,736
9,544
Income tax expense (benefit)
1,376
(1,530
)
1,241
1,735
2,397
2,139
1,854
1,870
Net income (loss)
$
4,502
$
(10,137
)
$
4,490
$
6,304
$
8,202
$
8,045
$
7,882
$
7,674
Financial Performance:
Return on average assets (annualized)
0.78
%
(1.73
)%
0.77
%
1.10
%
1.40
%
1.38
%
1.41
%
1.40
%
Return on average equity (annualized)
7.91
%
(18.24
)%
8.13
%
11.83
%
15.65
%
15.07
%
15.28
%
14.76
%
Net interest margin
2.12
%
2.08
%
2.10
%
2.57
%
3.05
%
3.10
%
3.16
%
3.34
%
Non-interest income (loss) as a percentage
of average assets (annualized)
0.11
%
(2.86
)%
0.12
%
0.10
%
0.12
%
0.08
%
0.02
%
0.08
%
Non-interest expense to average assets
(annualized)
1.31
%
1.30
%
1.34
%
1.35
%
1.27
%
1.36
%
1.38
%
1.61
%
Efficiency ratio
59.7
%
(158.4
)%
61.7
%
51.7
%
40.9
%
43.9
%
44.1
%
47.9
%
Per Share Data:
Earnings (loss) per share - basic
$
0.32
$
(0.72
)
$
0.32
$
0.45
$
0.58
$
0.57
$
0.56
$
0.55
Earnings (loss) per share - diluted
$
0.32
$
(0.72
)
$
0.32
$
0.44
$
0.58
$
0.57
$
0.56
$
0.55
Book value per share
$
16.25
$
15.61
$
15.50
$
15.63
$
15.09
$
14.37
$
14.80
$
14.68
Dividends declared per share
$
- -
$
- -
$
0.22
$
- -
$
- -
$
- -
$
- -
$
0.20
Weighted average common shares (basic)
14,082,762
14,080,026
14,077,658
14,067,047
14,019,429
13,989,414
13,932,256
13,783,034
Weighted average common shares
(diluted)
14,145,607
14,080,026
14,143,253
14,156,724
14,131,352
14,108,286
14,085,160
13,991,692
Common shares outstanding at end of
period
14,148,533
14,126,084
14,126,138
14,125,208
14,098,986
14,070,080
14,026,589
13,950,570
Non-interest Income:
Service charges on deposit accounts
$
91
$
85
$
82
$
72
$
84
$
79
$
84
$
77
Bank owned life insurance
- -
23
101
100
99
255
95
95
Other service charges and fees
161
160
314
203
187
175
157
137
Losses on securities
- -
(17,114
)
- -
(202
)
- -
- -
- -
- -
Insurance commissions
76
54
50
206
70
47
44
221
Gain on sale of government guaranteed
loans
81
27
23
- -
- -
- -
- -
- -
Non-qualified deferred compensation plan
asset gains (losses), net
205
(60
)
83
89
144
(107
)
(274
)
(117
)
Other income
10
10
32
98
134
1
3
1
Total non-interest income (loss)
$
624
$
(16,815
)
$
685
$
566
$
718
$
450
$
109
$
414
Non-interest Expenses:
Salaries and employee benefits
$
4,507
$
5,052
$
4,965
$
4,912
$
4,436
$
5,072
$
4,655
$
6,027
Occupancy expense of premises
448
445
448
470
458
461
482
493
Furniture and equipment expenses
296
282
304
296
336
323
341
325
Other expenses
2,303
1,881
2,114
2,092
2,219
2,102
2,203
1,941
Total non-interest expenses
$
7,554
$
7,660
$
7,831
$
7,770
$
7,449
$
7,958
$
7,681
$
8,786
Balance Sheets at Quarter End:
Total loans, net of unearned income
$
1,859,967
$
1,820,132
$
1,769,801
$
1,771,272
$
1,789,508
$
1,725,114
$
1,692,652
$
1,631,260
Allowance for loan credit losses
(19,543
)
(20,036
)
(20,629
)
(21,619
)
(20,208
)
(20,032
)
(20,031
)
(20,031
)
Investment securities
273,302
272,881
429,954
445,785
463,531
473,478
473,914
409,692
Interest-earning assets
2,224,850
2,278,027
2,315,368
2,312,404
2,308,055
2,258,822
2,274,968
2,217,553
Total assets
2,242,549
2,298,202
2,364,250
2,351,307
2,348,235
2,305,540
2,316,374
2,249,609
Total deposits
1,906,600
1,981,623
2,046,309
2,088,642
2,067,740
2,063,341
2,043,741
1,983,099
Total interest-bearing liabilities
1,583,934
1,622,430
1,691,044
1,665,837
1,641,167
1,552,758
1,581,017
1,530,133
Total shareholders' equity
229,914
220,567
218,970
220,823
212,800
202,212
207,530
204,855
Quarterly Average Balance
Sheets:
Total loans, net of unearned income
$
1,837,855
$
1,790,720
$
1,767,831
$
1,772,922
$
1,759,747
$
1,684,796
$
1,641,914
$
1,620,533
Investment securities
273,264
310,407
441,778
463,254
468,956
488,860
447,688
376,608
Interest-earning assets
2,260,356
2,301,642
2,305,050
2,295,677
2,289,061
2,277,325
2,204,709
2,183,897
Total assets
2,280,060
2,331,403
2,344,712
2,334,695
2,330,307
2,314,825
2,240,119
2,216,131
Total deposits
1,956,039
2,012,934
2,051,702
2,066,139
2,079,161
2,057,640
1,980,231
1,946,882
Total interest-bearing liabilities
1,587,179
1,660,980
1,667,597
1,621,131
1,566,902
1,547,766
1,504,574
1,505,854
Total shareholders' equity
225,718
220,473
221,608
220,282
207,906
212,147
206,967
210,900
Financial Measures:
Average equity to average assets
9.9
%
9.5
%
9.5
%
9.4
%
8.9
%
9.2
%
9.2
%
9.5
%
Investment securities to earning
assets
12.3
%
12.0
%
18.6
%
19.3
%
20.1
%
21.0
%
20.8
%
18.5
%
Loans to earning assets
83.6
%
79.9
%
76.4
%
76.6
%
77.5
%
76.4
%
74.4
%
73.6
%
Loans to assets
82.9
%
79.2
%
74.9
%
75.3
%
76.2
%
74.8
%
73.1
%
72.5
%
Loans to deposits
97.6
%
91.9
%
86.5
%
84.8
%
86.5
%
83.6
%
82.8
%
82.3
%
Capital Ratios (Bank Level):
Equity / assets
11.1
%
10.6
%
10.2
%
10.3
%
10.0
%
9.7
%
9.9
%
10.2
%
Total risk-based capital ratio
15.7
%
15.7
%
16.1
%
16.1
%
15.6
%
15.4
%
15.1
%
15.4
%
Tier 1 risk-based capital ratio
14.7
%
14.6
%
15.0
%
14.9
%
14.4
%
14.3
%
14.0
%
14.2
%
Common equity tier 1 ratio
14.7
%
14.6
%
15.0
%
14.9
%
14.4
%
14.3
%
14.0
%
14.2
%
Leverage ratio
11.6
%
11.3
%
11.6
%
11.5
%
11.3
%
11.0
%
11.0
%
10.8
%
John Marshall Bancorp,
Inc.
Loan, Deposit and Borrowing
Detail (Unaudited)
(Dollar amounts in
thousands)
2023
2022
December 31
September 30
June 30
March 31
December 31
September 30
June 30
March 31
Loans
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
Commercial business loans
$
45,073
2.4
%
$
37,793
2.1
%
$
40,156
2.3
%
$
41,204
2.3
%
$
44,788
2.5
%
$
44,967
2.6
%
$
47,654
2.8
%
$
52,569
3.2
%
Commercial PPP loans
131
0.0
%
132
0.0
%
133
0.0
%
135
0.0
%
136
0.0
%
138
0.0
%
224
0.0
%
7,781
0.5
%
Commercial owner-occupied real estate
loans
360,102
19.4
%
363,017
20.0
%
360,859
20.4
%
363,495
20.6
%
366,131
20.5
%
362,346
21.1
%
378,457
22.4
%
339,933
20.9
%
Total business loans
405,306
21.8
%
400,942
22.1
%
401,148
22.7
%
404,834
22.9
%
411,055
23.0
%
407,451
23.7
%
426,335
25.2
%
400,283
24.6
%
Investor real estate loans
689,556
37.1
%
683,686
37.6
%
654,623
37.0
%
660,740
37.4
%
662,769
37.1
%
622,415
36.1
%
598,501
35.5
%
553,093
34.0
%
Construction & development loans
180,922
9.8
%
179,570
9.9
%
179,656
10.2
%
179,606
10.2
%
195,027
11.0
%
199,324
11.6
%
189,644
11.2
%
219,160
13.4
%
Multi-family loans
96,458
5.2
%
86,366
4.8
%
86,061
4.9
%
88,670
5.0
%
89,227
5.0
%
106,460
6.2
%
106,236
6.3
%
99,100
6.1
%
Total commercial real estate loans
966,936
52.1
%
949,622
52.3
%
920,340
52.1
%
929,016
52.6
%
947,023
53.1
%
928,199
53.9
%
894,381
53.0
%
871,353
53.5
%
Residential mortgage loans
482,182
26.1
%
464,509
25.7
%
443,305
25.2
%
433,076
24.5
%
426,841
23.9
%
385,696
22.4
%
368,370
21.8
%
356,331
21.9
%
Consumer loans
560
0.0
%
467
0.0
%
646
0.0
%
324
0.0
%
529
0.0
%
585
0.0
%
651
0.0
%
513
0.0
%
Total loans
$
1,854,984
100.0
%
$
1,815,540
100.0
%
$
1,765,439
100.0
%
$
1,767,250
100.0
%
$
1,785,448
100.0
%
$
1,721,931
100.0
%
$
1,689,737
100.0
%
$
1,628,480
100.0
%
Less: Allowance for loan credit losses
(19,543
)
(20,036
)
(20,629
)
(21,619
)
(20,208
)
(20,032
)
(20,031
)
(20,031
)
Net deferred loan costs (fees)
4,983
4,592
4,362
4,022
4,060
3,183
2,915
2,780
Net loans
$
1,840,424
$
1,800,096
$
1,749,172
$
1,749,653
$
1,769,300
$
1,705,082
$
1,672,621
$
1,611,229
2023
2022
December 31
September 30
June 30
March 31
December 31
September 30
June 30
March 31
Deposits
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
$ Amount
% of Total
Non-interest bearing demand deposits
$
411,374
21.6
%
$
437,880
22.1
%
$
433,931
21.2
%
$
447,450
21.4
%
$
476,697
23.1
%
$
535,186
25.9
%
$
512,284
25.1
%
$
495,811
25.0
%
Interest-bearing demand deposits:
NOW accounts(1)
297,321
15.6
%
345,522
17.4
%
311,225
15.2
%
284,872
13.7
%
253,148
12.3
%
293,558
14.2
%
338,789
16.6
%
345,087
17.4
%
Money market accounts(1)
310,650
16.3
%
330,297
16.7
%
341,413
16.7
%
392,962
18.8
%
438,797
21.2
%
412,035
20.0
%
399,877
19.6
%
414,987
20.9
%
Savings accounts
52,061
2.8
%
57,408
3.0
%
68,013
3.4
%
81,150
3.9
%
95,241
4.6
%
102,909
5.0
%
112,276
5.4
%
114,427
5.8
%
Certificates of deposit
$250,000 or more
357,768
18.8
%
364,805
18.4
%
376,899
18.4
%
338,824
16.2
%
314,738
15.2
%
280,027
13.6
%
255,411
12.5
%
241,230
12.1
%
Less than $250,000
101,567
5.3
%
103,600
5.2
%
105,956
5.2
%
94,429
4.5
%
89,247
4.3
%
88,421
4.3
%
87,505
4.3
%
91,050
4.6
%
QwickRate® certificates of deposit
9,686
0.5
%
11,526
0.6
%
12,772
0.6
%
16,952
0.8
%
22,163
1.1
%
20,154
1.0
%
20,154
1.0
%
23,136
1.2
%
IntraFi® certificates of deposit
45,748
2.4
%
41,659
2.1
%
49,729
2.4
%
53,178
2.5
%
25,757
1.2
%
46,305
2.2
%
32,686
1.6
%
39,628
2.0
%
Brokered deposits
320,425
16.8
%
288,926
14.6
%
346,371
16.9
%
378,825
18.2
%
351,952
17.0
%
284,746
13.8
%
284,759
13.9
%
217,743
11.0
%
Total deposits
$
1,906,600
100.0
%
$
1,981,623
100.0
%
$
2,046,309
100.0
%
$
2,088,642
100.0
%
$
2,067,740
100.0
%
$
2,063,341
100.0
%
$
2,043,741
100.0
%
$
1,983,099
100.0
%
Borrowings
Federal funds purchased
$
10,000
11.3
%
$
- -
0.0
%
$
- -
0.0
%
$
- -
0.0
%
$
25,500
50.9
%
$
- -
0.0
%
$
- -
0.0
%
$
- -
0.0
%
Federal Home Loan Bank advances
- -
0.0
%
- -
0.0
%
- -
0.0
%
- -
0.0
%
- -
0.0
%
- -
0.0
%
- -
0.0
%
18,000
42.0
%
Federal Reserve Bank borrowings
54,000
60.9
%
54,000
68.6
%
54,000
68.6
%
- -
0.0
- -
0.0
%
- -
0.0
%
- -
0.0
%
- -
0.0
%
Subordinated debt
24,708
27.9
%
24,687
31.4
%
24,666
31.4
%
24,645
100.0
%
24,624
49.1
%
24,603
100.0
%
49,560
100.0
%
24,845
58.0
%
Total borrowings
$
88,708
100.0
%
$
78,687
100.0
%
$
78,666
100.0
%
$
24,645
100.0
%
$
50,124
100.0
%
$
24,603
100.0
%
$
49,560
100.0
%
$
42,845
100.0
%
Total deposits and borrowings
$
1,995,308
$
2,060,310
$
2,124,975
$
2,113,287
$
2,117,864
$
2,087,944
$
2,093,301
$
2,025,944
Core customer funding sources (2)
$
1,576,489
80.0
%
$
1,681,171
82.6
%
$
1,687,166
80.3
%
$
1,692,865
81.1
%
$
1,693,625
80.9
%
$
1,758,441
85.2
%
$
1,738,828
85.1
%
$
1,742,220
87.1
%
Wholesale funding sources (3)
394,111
20.0
%
354,452
17.4
%
413,143
19.7
%
395,777
18.9
%
399,615
19.1
%
304,900
14.8
%
304,913
14.9
%
258,879
12.9
%
Total funding sources
$
1,970,600
100.0
%
$
2,035,623
100.0
%
$
2,100,309
100.0
%
$
2,088,642
100.0
%
$
2,093,240
100.0
%
$
2,063,341
100.0
%
$
2,043,741
100.0
%
$
2,001,099
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)
Twelve Months Ended December
31, 2023
Twelve Months Ended December
31, 2022
Interest Income /
Average
Interest Income /
Average
Average Balance
Expense
Rate
Average Balance
Expense
Rate
Assets:
Securities:
Taxable
$
368,922
$
7,506
2.03
%
$
440,899
$
8,183
1.86
%
Tax-exempt(1)
2,351
68
2.89
%
5,001
152
3.04
%
Total securities
$
371,273
$
7,574
2.04
%
$
445,900
$
8,335
1.87
%
Loans, net of unearned income(2):
Taxable
1,764,315
85,515
4.85
%
1,652,940
73,497
4.45
%
Tax-exempt(1)
28,190
1,164
4.13
%
24,211
993
4.10
%
Total loans, net of unearned income
$
1,792,505
$
86,679
4.84
%
$
1,677,151
$
74,490
4.44
%
Interest-bearing deposits in other
banks
$
126,623
$
6,776
5.35
%
$
116,092
$
1,482
1.28
%
Total interest-earning assets
$
2,290,401
$
101,029
4.41
%
$
2,239,143
$
84,307
3.77
%
Total non-interest earning assets
32,430
36,624
Total assets
$
2,322,831
$
2,275,767
Liabilities & Shareholders’
Equity:
Interest-bearing deposits
NOW accounts
$
299,468
$
6,804
2.27
%
$
311,950
$
1,359
0.44
%
Money market accounts
362,243
10,150
2.80
%
395,369
3,340
0.84
%
Savings accounts
69,742
831
1.19
%
108,178
504
0.47
%
Time deposits
842,121
29,383
3.49
%
682,674
6,575
0.96
%
Total interest-bearing deposits
$
1,573,574
$
47,168
3.00
%
$
1,498,171
$
11,778
0.79
%
Federal funds purchased
302
15
4.97
%
386
15
3.89
%
Subordinated debt
24,664
1,396
5.66
%
26,754
1,810
6.77
%
Federal Reserve Bank borrowings
35,663
1,707
4.79
%
6,175
42
0.68
%
Total interest-bearing liabilities
$
1,634,203
$
50,286
3.08
%
$
1,531,486
$
13,645
0.89
%
Demand deposits
447,804
518,284
Other liabilities
18,791
16,518
Total liabilities
$
2,100,798
$
2,066,288
Shareholders’ equity
$
222,033
$
209,479
Total liabilities and shareholders’
equity
$
2,322,831
$
2,275,767
Tax-equivalent net interest income and
spread
$
50,743
1.33
%
$
70,662
2.88
%
Less: tax-equivalent adjustment
259
241
Net interest income
$
50,484
$
70,421
Tax-equivalent interest income/earnings
assets
4.41
%
3.77
%
Interest expense/earning assets
2.20
%
0.61
%
Net interest margin(3)
2.22
%
3.16
%
____________________
(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 $259 thousand and $241
thousand for the twelve months ended December 31, 2023 and December
31, 2022, respectively.
(2)
The Company did not have any
loans on non-accrual as of December 31, 2023 or December 31,
2022.
(3)
The net interest margin has been
calculated on a tax-equivalent basis.
John Marshall Bancorp,
Inc.
Average Balance Sheets,
Interest and Rates (unaudited)
(Dollar amounts in
thousands)
Three Months Ended December
31, 2023
Three Months Ended December
31, 2022
Interest Income /
Average
Interest Income /
Average
Average Balance
Expense
Rate
Average Balance
Expense
Rate
Assets:
Securities:
Taxable
$
271,884
$
1,388
2.03
%
$
463,961
$
2,401
2.05
%
Tax-exempt(1)
1,380
11
3.16
%
4,995
38
3.02
%
Total securities
$
273,264
$
1,399
2.03
%
$
468,956
$
2,439
2.06
%
Loans, net of unearned income(2):
Taxable
1,810,046
22,852
5.01
%
1,730,921
20,305
4.65
%
Tax-exempt(1)
27,809
289
4.12
%
28,826
299
4.12
%
Total loans, net of unearned income
$
1,837,855
$
23,141
5.00
%
$
1,759,747
$
20,604
4.65
%
Interest-bearing deposits in other
banks
$
149,237
$
2,121
5.64
%
$
60,358
$
585
3.85
%
Total interest-earning assets
$
2,260,356
$
26,661
4.68
%
$
2,289,061
$
23,628
4.10
%
Total non-interest earning assets
19,704
41,246
Total assets
$
2,280,060
$
2,330,307
Liabilities & Shareholders’
Equity:
Interest-bearing deposits
NOW accounts
$
323,950
$
2,320
2.84
%
$
271,306
$
530
0.78
%
Money market accounts
327,198
2,590
3.14
%
412,682
1,824
1.75
%
Savings accounts
53,331
157
1.17
%
103,542
220
0.84
%
Time deposits
803,679
8,510
4.20
%
753,228
3,114
1.64
%
Total interest-bearing deposits
$
1,508,158
$
13,577
3.57
%
$
1,540,758
$
5,688
1.46
%
Federal funds purchased
326
5
6.08
%
1,533
15
3.88
%
Subordinated debt, net
24,695
349
5.61
%
24,611
349
5.63
%
Federal Reserve Bank borrowings
54,000
640
4.70
%
—
—
0.00
%
Total interest-bearing liabilities
$
1,587,179
$
14,571
3.64
%
$
1,566,902
$
6,052
1.53
%
Demand deposits
447,881
538,403
Other liabilities
19,282
17,096
Total liabilities
$
2,054,342
$
2,122,401
Shareholders’ equity
$
225,718
$
207,906
Total liabilities and shareholders’
equity
$
2,280,060
$
2,330,307
Tax-equivalent net interest income and
spread
$
12,090
1.04
%
$
17,576
2.57
%
Less: tax-equivalent adjustment
63
71
Net interest income
$
12,027
$
17,505
Tax-equivalent interest income/earnings
assets
4.68
%
4.10
%
Interest expense/earning assets
2.56
%
1.05
%
Net interest margin(3)
2.12
%
3.05
%
____________________
(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 $63 thousand and $71 thousand
for the three months ended December 31, 2023 and December 31, 2022,
respectively.
(2)
The Company did not have any
loans on non-accrual as of December 31, 2023 or December 31,
2022.
(3)
The net interest margin has been
calculated on a tax-equivalent basis.
John Marshall Bancorp,
Inc.
Reconciliation of Certain
Non-GAAP Financial Measures (unaudited)
(Dollar amounts in
thousands)
As of
December 31, 2023
December 31, 2022
Regulatory Ratios (Bank)
Total risk-based capital (GAAP)
$
282,082
$
283,471
Less: Unrealized losses on
available-for-sale securities, net of tax benefit (1)
12,401
28,942
Less: Unrealized losses on
held-to-maturity securities, net of tax benefit (1)
12,469
14,421
Adjusted total risk-based capital,
excluding unrealized losses on available-for-sale and
held-to-maturity securities, net of tax benefit (Non-GAAP)
$
257,212
$
240,108
Tier 1 capital (GAAP)
$
263,637
$
262,960
Less: Unrealized losses on
available-for-sale securities, net of tax benefit (1)
12,401
28,942
Less: Unrealized losses on
held-to-maturity securities, net of tax benefit (1)
12,469
14,421
Adjusted tier 1 capital, excluding
unrealized losses on available-for-sale and held-to-maturity
securities, net of tax benefit (Non-GAAP)
$
238,767
$
219,597
Risk weighted assets (GAAP)
$
1,794,769
$
1,819,305
Less: Risk weighted available-for-sale
securities
24,184
60,894
Less: Risk weighted held-to-maturity
securities
17,079
17,762
Adjusted risk weighted assets, excluding
available-for-sale and held-to-maturity securities (Non-GAAP)
$
1,753,506
$
1,740,649
Total average assets for leverage ratio
(GAAP)
$
2,274,911
$
2,327,939
Less: Average available-for-sale
securities
169,789
362,024
Less: Average held-to-maturity
securities
95,994
100,050
Adjusted total average assets for leverage
ratio, excluding available-for-sale and held-to-maturity securities
(Non-GAAP)
$
2,009,128
$
1,865,865
Total risk-based capital ratio (2)
Total risk-based capital ratio (GAAP)
15.7
%
15.6
%
Adjusted total risk-based capital ratio
(Non-GAAP) (3)
14.7
%
13.8
%
Tier 1 capital ratio (4)
Tier 1 risk-based capital ratio (GAAP)
14.7
%
14.4
%
Adjusted tier 1 risk-based capital ratio
(Non-GAAP) (5)
13.5
%
12.6
%
Common equity tier 1 ratio (6)
Common equity tier 1 ratio (GAAP)
14.7
%
14.4
%
Adjusted common equity tier 1 ratio
(Non-GAAP) (7)
13.5
%
12.6
%
Leverage ratio (8)
Leverage ratio (GAAP)
11.6
%
11.3
%
Adjusted leverage ratio (Non-GAAP) (9)
11.9
%
11.8
%
____________________
(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 amounts)
For the Twelve Months
Ended
December 31, 2023
Non-interest loss (GAAP)
$
(14,940
)
Adjustment: Pre-tax loss recognized on
sale of available-for-sale securities
17,114
Core non-interest income (Non-GAAP)
$
2,174
Income before taxes (GAAP)
$
7,981
Adjustment: Pre-tax loss recognized on
sale of available-for-sale securities
17,114
Core income before taxes (Non-GAAP)
$
25,095
Income tax expense (GAAP)
$
2,823
Adjustment: Tax and 10% modified endowment
contract penalty on early surrender of BOLI policies
(1,101
)
Adjustment: Tax benefit of loss recognized
on sale of available-for-sale securities
3,594
Core income tax expense (Non-GAAP)(1)
$
5,316
Net income (GAAP)
$
5,158
Core net income (Non-GAAP)(2)
$
19,779
Earnings per share - basic (GAAP)
$
0.36
Core earnings per share - basic
(Non-GAAP)(3)
$
1.40
Earnings per share - diluted (GAAP)
$
0.36
Core earnings per share - diluted
(Non-GAAP)(3)
$
1.39
Return on average assets (GAAP)
0.22
%
Core return on average assets
(Non-GAAP)(4)
0.85
%
Return on average equity (GAAP)
2.32
%
Core return on average equity
(Non-GAAP)(5)
8.91
%
Non-interest loss as a percentage of
average assets (GAAP)
(0.64
)%
Core non-interest income as a percentage
of average assets (Non-GAAP)(6)
0.09
%
Efficiency ratio (GAAP)
86.7
%
Core efficiency ratio (Non-GAAP)(7)
58.5
%
For the Three Months
Ended
December 31, 2023
September 30, 2023
June 30, 2023
Net income (loss) (GAAP)
$
4,502
$
(10,137
)
$
4,490
Adjustment: Loss recognized on sale of
available-for-sale securities, net of tax
-
13,520
-
Adjustment: Tax and 10% modified endowment
contract penalty on early surrender of BOLI policies
-
1,101
-
Core net income (Non-GAAP)(2)
$
4,502
$
4,484
$
4,490
____________________
(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 the periods
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 the
period presented.
(4)
Core return on average assets is
calculated by dividing core net income by average assets for the
period presented.
(5)
Core return on average equity is
calculated by dividing core net income by average equity for the
period presented.
(6)
Core non-interest income as a
percentage of average assets is calculated by dividing core
non-interest income by average assets for the 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 the period
presented.
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240124721237/en/
Christopher W. Bergstrom (703) 584-0840 Kent D. Carstater (703)
289-5922
John Marshall Bancorp (NASDAQ:JMSB)
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