RESTON, Va.--(BUSINESS WIRE)--John Marshall Bancorp, Inc. (OTCQB: JMSB) (the “Company”) reported net income of $3.1 million for the three months ended June 30, 2018, an increase of $396 thousand, or 14.6%, as compared to net income of $2.7 million for the three months ended June 30, 2017. Net income per diluted share was $0.23 per share during the second quarter of 2018, compared to $0.20 per diluted share during the same period in 2017, as adjusted for the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017. For the three months ended June 30, 2018, the Company produced a 0.99% return on average assets and 9.30% on average equity, compared to 1.00% and 8.74%, for the second quarter of 2017.
The Company reported net income of $6.3 million for the six months ended June 30, 2018, an increase of $1.1 million, or 21.6%, compared to $5.2 million for the six months ended June 30, 2017. Net income per diluted share was $0.47 during the first six months of 2018, compared to $0.38 per diluted share during the same period in 2017, as adjusted for the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017. For the six months ended June 30, 2018, the Company produced a 1.04% return on average assets and 9.68% on average equity, compared to 0.97% and 8.59%, during the same period in 2017.
As of June 30, 2018, the Company’s tangible book value per share was $10.49, up 7.6% compared to $9.75 as of June 30, 2017, as adjusted for the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017. The Company’s effective income tax rate decreased 38.5% for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, due to the federal corporate tax rate reduction that was effective January 1, 2018.
The Company’s capital ratios remain well above regulatory minimums for well capitalized banks. As of June 30, 2018, the Company’s total risk-based capital ratio was 14.9%, compared to 12.3% at June 30, 2017.
Balance Sheet Review
Total assets were $1.23 billion at June 30, 2018, $1.18 billion at December 31, 2017 and $1.12 billion at June 30, 2017. During the first six months of 2018 assets increased $53.1 million, or 4.5%. Year-over-year asset growth, from June 30, 2017 to June 30, 2018, was $109.7 million, or 9.8%. Gross loans were $1.040 billion at June 30, 2018, $1.009 billion at December 31, 2017 and $942.5 million at June 30, 2017. During the first six months of 2018 gross loans increased $31.5 million, or 3.1%. Year-over-year gross loans increased $97.8 million, or 10.4% from June 30, 2017 to June 30, 2018. Loan originations were strong with $28.0 million of net growth in gross loans during the second quarter of 2018.
The Company’s investment portfolio comprised of held-to-maturity and available-for-sale securities was $95.6 million at June 30, 2018, $96.3 million at December 31, 2017 and $83.8 million at June 30, 2017. Year-over-year the investment portfolio growth, from June 30, 2017 to June 30, 2018, was $11.8 million, or 14.1%. The growth in the investment portfolio was due to strong deposit growth discussed below. As of June 30, 2018, the Company held $39.9 million of its investment portfolio as held-to-maturity, and $55.7 million as available-for-sale. The Company also had restricted securities totaling $8.1 million at June 30, 2018, $8.4 million at December 31, 2017 and $8.1 million at June 30, 2017. Interest-bearing deposits in banks were $54.6 million at June 30, 2018, $30.9 million at December 31, 2017 and $49.4 million at June 30, 2017. At June 30, 2018, the estimated fair value of bank owned life insurance was $19.4 million, compared to $19.1 million at December 31, 2017 and $18.8 million at June 30, 2017.
Total deposits were $974.4 million at June 30, 2018, $896.9 million at December 31, 2017 and $878.8 million at June 30, 2017. During the first six months of 2018, deposits increased $77.5 million, or 8.6%. Year-over-year deposit growth, from June 30, 2017 to June 30, 2018, was $95.6 million, or 10.9%. Core customer funding was $906.0 million at June 30, 2018, $829.8 million at December 31, 2017 and $816.1 million at June 30, 2017. Year-over-year core customer funding sources, which include deposits, customer repurchase agreements, ICS and CDARs, increased by $89.9 million, or 11.0%, from June 30, 2017 to June 30, 2018. Over the past year, the Company has implemented several strategic initiatives to grow core deposits and loans, including new locations and additional staff, as discussed in the non-interest expense section.
CDARs were $98.1 million at June 30, 2018, $77.5 million at December 31, 2017 and $83.6 million at June 30, 2017. Year-over-year CDARs increased $14.5 million. Brokered deposits were $43.0 million at June 30, 2018, $42.4 million at December 31, 2017 and $43.0 million at June 30, 2017. The Company had $81.1 million in ICS deposits as of June 30, 2018, $65.3 million at December 31, 2017 and $60.9 million as of June 30, 2017.
QwickRate certificates of deposit were $25.5 million at June 30, 2018, $24.7 million at December 31, 2017 and $22.4 million at June 30, 2017. Year-over-year QwickRate certificates of deposit increased $3.0 million from June 30, 2017 to June 30, 2018. Year-over-year, brokered deposits were unchanged from June 30, 2017 to June 30, 2018. There were no customer repurchase agreements at June 30, 2018 and December 31, 2017 and $2.7 million at June 30, 2017.
Total borrowings, consisting of Federal Home Loan Bank advances, customer repurchase agreements and Federal funds purchased, were $89.5 million at June 30, 2018, $118.5 million at December 31, 2017 and $109.7 million at June 30, 2017. Year-over-year total borrowings decreased $20.2 million, or 18.4% from June 30, 2017 to June 30, 2018. Federal Home Loan Bank advances were $89.5 million at June 30, 2018, $108.5 million at December 31, 2017 and $107.0 million at June 30, 2017. Year-over-year Federal Home Loan Bank advances decreased $17.5 million or 16.4%, from June 30, 2017 to June 30, 2018. The Company decreased borrowings as a result of the significant growth in core customer deposits. The Company had subordinated notes with a balance of $24.6 million at June 30, 2018 and $24.5 million at December 31, 2017. The notes qualify as Tier 2 capital for the Company for regulatory purposes.
Total shareholders’ equity was $135.0 million at June 30, 2018, $128.9 million at December 31, 2017 and $124.8 million at June 30, 2017. Year-over-year shareholders’ equity increased by $10.1 million, or 8.1%. Total common shares outstanding increased from 10,243,141, including 67,020 unvested shares, at June 30, 2017, to 12,871,125, including 86,125 unvested shares, at June 30, 2018. The majority of the increase in shares year-over-year was related to the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017.
Income Statement Review
Net interest income
Net interest income, the Company’s primary source of revenue, was $10.8 million for the three months ended June 30, 2018, up 7.0% from $10.1 million for the three months ended June 30, 2017. The net interest margin was 3.52% for the three months ended June 30, 2018 as compared to 3.82% for the three months ended June 30, 2017. Average net loans increased $80.6 million with a 14 basis point increase in yield and average interest-bearing deposits in other banks increased $77.9 million with a 71 basis point increase in yield when comparing the quarter ended June 30, 2017 to the quarter ended June 30, 2018. While the higher interest-bearing deposit balances impacted the margin during the second quarter of 2018, the Company anticipates that these funds will be deployed into higher earning assets. The average cost of interest bearing liabilities increased 41 basis points when comparing the quarter ended June 30, 2017 to the quarter ended June 30, 2018. The increase in the cost of interest bearing liabilities year-over-year was primarily related to the Company’s issuance of subordinated debt which contributed 13 basis points to the increase as well as the higher costs of time deposits and money market accounts. During the twelve months ended June 30, 2018, the Federal Reserve increased rates by 100 basis points to a target of 2.0%.
For the six months ended June 30, 2018, net interest income was $21.2 million, up 7.7% from $19.7 million for the six months ended June 30, 2017. The net interest margin was 3.56% during the first six months of 2018, compared to 3.78% during the first six months of 2017. Despite the decline in the net interest margin over the past year, net interest income increased by 7.7% during the first six months of 2018, compared to the first six months of 2017, resulting primarily from a $151.0 million, or 14.4%, increase in average earning assets during the first six months of 2018, compared to the first six months of 2017.
Provision for loan losses
The Company had no provision for loan losses for the three months ended June 30, 2018, compared to a provision of $380 thousand for the same period in 2017. The Company reported net loan charge-offs of $85 thousand in the second quarter of 2018, compared to net loan recoveries of $8 thousand in the second quarter of 2017. During the second quarter 2018, the need for additional provisions for loan losses on new loan volume were offset when one non-accrual loan with a specific reserve was paid down.
During the first six months of 2018, the Company recognized a provision for loan losses of $190 thousand, compared to a provision of $645 thousand during the first six months of 2017. The Company reported $86 thousand in net loan charge-offs during the first six months of 2018, compared to $14 thousand in net loan recoveries during the first six months of 2017.
Noninterest income
The Company’s noninterest income consists primarily of bank owned life insurance income and service charges on deposit accounts. Loan fees are included in interest income on the loan portfolio and not reported as noninterest income.
For the three months ended June 30, 2018, the Company reported total noninterest income of $294 thousand, compared to $310 thousand during the three months ended June 30, 2017, a decrease of $16 thousand, or 5.2%.
For the six months ended June 30, 2018, the Company reported total noninterest income of $628 thousand, compared to $658 thousand during the first six months of 2017, a decrease of $30 thousand, or 4.6%.
The year-over-year decrease for both the three and six month periods ended June 30, 2018 was primarily attributable to gains on sales of securities totaling $130 thousand during the first and second quarters of 2017. There was no gain on sale of securities during the first six months of 2018. Service charges on deposit accounts increased $25 thousand, or 27.5%, for the three months ended June 30, 2018 and $42 thousand, or 22.3%, for the six months ended June 30, 2018 as compared to the same periods in the prior year. The increase in other service charges and fees for both the three and six month periods ended June 30, 2018 was related to higher fees earned on the higher CDARs balances.
Noninterest expense
The Company reached $1.2 billion in total assets in a little over 12 years solely through organic growth. One of the key platforms of the Company’s growth strategy is to hire experienced local banking professionals with successful track records and established customer relationships. The Company made several investments in its future growth over the past six months. The Company expects that the increases in noninterest expenses will drive significant growth in assets and profitability.
For the three months ended June 30, 2018, salaries and employee benefits expense increased 30.4% to $4.6 million, compared to $3.5 million for the same period in 2017. All other noninterest expenses increased by 8.3% during the second quarter of 2018, compared to the same period in 2017.
During the first six months of 2018, salaries and employee benefits expense increased by 22.1%, to $8.7 million, compared to $7.2 million during the first six months of 2017. All other operating expenses increased by 5.1%, or $238 thousand, to $4.9 million, during the first six months of 2018, compared to $4.6 million during the first six months of 2017.
The increase in salaries and benefits for both the three and six month periods ended June 30, 2018 was primarily attributable to the addition of 10 staff positions year-over-year including staff for our loan production office in Arlington, Virginia that opened in December 2017, our full service branch in Washington, DC which opened in January 2018, the Tysons Corner, Virginia loan production office converting to a full service branch in the fall of 2018 and a loan production office in Prince William County, Virginia to open in the fall of 2018 as well. In addition to the staff needed at our new locations, we hired key executives, loan and business development officers as well as support staff in our operations office. The new employees are complementary to the overall growth initiatives for the Company. The increase in occupancy and furniture and equipment expenses was mostly related to additional rent and furniture expense related to the new full service branch in Washington, DC and the additional loan production office in Arlington, Virginia.
Asset Quality Review
As of June 30, 2018, non-performing assets were 0.06% of total assets, compared to 0.30% at June 30, 2017. The Company’s allowance for loan losses covered non-performing loans by 23.2 times as of June 30, 2018, compared to 2.6 times as of June 30, 2017. As of June 30, 2018, non-accrual loans totaled $390 thousand, an 88.5% decrease from $3.4 million at June 30, 2017. As of June 30, 2018, there were $726 thousand in loans 30-89 days past due and still accruing interest and $108 thousand as of June 30, 2017. The $726 thousand past due balance was comprised of two loans that matured and were in the process of renewal.
Troubled debt restructurings were $488 thousand at June 30, 2018, a decrease of $13 thousand, or 2.6%, from $501 thousand at June 30, 2017. All troubled debt restructurings were performing in accordance with modified terms as of June 30, 2018. The Company had $379 thousand in other real estate owned as of June 30, 2018 and December 31, 2017 and no other real estate owned as of June 30, 2017.
John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. John Marshall Bank is headquartered in Reston, Virginia and has six full-service banking centers located in Reston, Leesburg, Arlington and Alexandria, Virginia; Rockville, Maryland; Washington, DC., and a seventh branch in Tysons Corner scheduled to open late fall. A loan production office is scheduled to open in Prince William County in the fall of 2018 as well. Virginia. Further information on the Bank can be obtained by visiting its website at www.johnmarshallbank.com.
This press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance.
| John Marshall Bancorp, Inc. | ||||||||||||||||||
| Consolidated Balance Sheets | ||||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||||
| % Change | ||||||||||||||||||
| June 30, | December 31, | June 30, | Last Six | Year Over | ||||||||||||||
| 2018 | 2017 | 2017 | Months | Year | ||||||||||||||
| Assets | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Cash and due from banks | $ | 5,482 | $ | 7,256 | $ | 9,998 | -24.4 | % | -45.2 | % | ||||||||
| Federal funds sold | 76 | 40 | 60 | 90.0 | % | 26.7 | % | |||||||||||
| Interest-bearing deposits in banks | 54,593 | 30,873 | 49,390 | 76.8 | % | 10.5 | % | |||||||||||
| Securities available-for-sale, at fair value | 55,654 | 54,699 | 42,006 | 1.7 | % | 32.5 | % | |||||||||||
|
Securities held-to-maturity, fair value of $39,066 at 6/30/2018, $41,500 at 12/31/2017 and $42,096 at 6/30/2017 |
39,931 | 41,570 | 41,791 | -3.9 | % | -4.5 | % | |||||||||||
| Restricted securities, at cost | 8,115 | 8,447 | 8,071 | -3.9 | % | 0.5 | % | |||||||||||
|
Loans, net of allowance for loan losses of $9,031 at 6/30/2018, $8,927 at 12/31/2017 and $8,861 at 6/30/2017 |
1,029,408 | 997,945 | 931,885 | 3.2 | % | 10.5 | % | |||||||||||
| Bank premises and equipment, net | 2,496 | 2,480 | 2,760 | 0.6 | % | -9.6 | % | |||||||||||
| Accrued interest receivable | 3,282 | 3,263 | 2,818 | 0.6 | % | 16.5 | % | |||||||||||
| Bank owned life insurance | 19,353 | 19,093 | 18,814 | 1.4 | % | 2.9 | % | |||||||||||
| Other real estate owned | 379 | 379 | - - | 0.0 | % | N/M | ||||||||||||
| Other assets | 9,366 | 8,980 | 10,824 | 4.3 | % | -13.5 | % | |||||||||||
| Total assets | $ | 1,228,135 | $ | 1,175,025 | $ | 1,118,417 | 4.5 | % | 9.8 | % | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Liabilities | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Non-interest bearing demand deposits | $ | 206,098 | $ | 174,686 | $ | 167,920 | 18.0 | % | 22.7 | % | ||||||||
| Interest bearing demand deposits | 288,918 | 258,306 | 267,585 | 11.9 | % | 8.0 | % | |||||||||||
| Savings deposits | 6,697 | 6,709 | 7,436 | -0.2 | % | -9.9 | % | |||||||||||
| Time deposits | 472,727 | 457,240 | 435,893 | 3.4 | % | 8.5 | % | |||||||||||
| Total deposits | 974,440 | 896,941 | 878,834 | 8.6 | % | 10.9 | % | |||||||||||
| Federal funds purchased | - - | 10,001 | - - | N/M | N/M | |||||||||||||
| Repurchase agreements | - - | - - | 2,723 | N/M | N/M | |||||||||||||
| Federal Home Loan Bank advances | 89,500 | 108,500 | 107,000 | -17.5 | % | -16.4 | % | |||||||||||
| Subordinated debt | 24,556 | 24,531 | - - | 0.1 | % | N/M | ||||||||||||
| Accrued interest payable | 1,149 | 996 | 255 | 15.4 | % | 350.6 | % | |||||||||||
| Other liabilities | 3,509 | 5,189 | 4,760 | -32.4 | % | -26.3 | % | |||||||||||
| Total liabilities | 1,093,154 | 1,046,158 | 993,572 | 4.5 | % | 10.0 | % | |||||||||||
| Shareholders' Equity | ||||||||||||||||||
|
Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued |
- - | - - | - - | - - | - - | |||||||||||||
|
Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued |
- - | - - | - - | - - | - - | |||||||||||||
|
Common stock, voting, par value $0.01 per share; authorized 20,000,000 shares; issued and outstanding, 12,871,125 at 6/30/2018 including 86,125 unvested shares, 12,824,233 shares at 12/31/2017 including 85,007 unvested shares and 10,243,141 at 6/30/17, including 67,020 unvested shares |
128 | 127 | 102 | 0.8 | % | 25.5 | % | |||||||||||
| Additional paid-in capital | 84,469 | 83,867 | 83,386 | 0.7 | % | 1.3 | % | |||||||||||
| Retained earnings | 51,774 | 45,544 | 41,669 | 13.7 | % | 24.3 | % | |||||||||||
| Accumulated other comprehensive loss | (1,390 | ) | (671 | ) | (312 | ) | -107.2 | % | -345.5 | % | ||||||||
| Total shareholders' equity | 134,981 | 128,867 | 124,845 | 4.7 | % | 8.1 | % | |||||||||||
| Total liabilities and shareholders' equity | $ | 1,228,135 | $ | 1,175,025 | $ | 1,118,417 | 4.5 | % | 9.8 | % | ||||||||
| John Marshall Bancorp, Inc. | ||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Interest and Dividend Income | ||||||||||||||||||
| Interest and fees on loans | $ | 12,733 | $ | 11,398 | 11.7 | % | $ | 25,169 | $ | 22,210 | 13.3 | % | ||||||
| Interest on investment securities, taxable | 418 | 336 | 24.4 | % | 832 | 697 | 19.4 | % | ||||||||||
| Interest on investment securities, tax-exempt | 83 | 53 | 56.6 | % | 168 | 105 | 60.0 | % | ||||||||||
| Dividends | 128 | 105 | 21.9 | % | 242 | 203 | 19.2 | % | ||||||||||
| Interest on deposits in banks | 474 | 74 | 540.5 | % | 706 | 153 | 361.4 | % | ||||||||||
| Total interest and dividend income | 13,836 | 11,966 | 15.6 | % | 27,117 | 23,368 | 16.0 | % | ||||||||||
| Interest Expense | ||||||||||||||||||
| Deposits | 2,343 | 1,563 | 49.9 | % | 4,411 | 3,037 | 45.2 | % | ||||||||||
| Federal Home Loan Bank advances | 363 | 341 | 6.5 | % | 774 | 642 | 20.6 | % | ||||||||||
| Subordinated debt | 371 | - - | N/M | 743 | - - | N/M | ||||||||||||
| Other short-term borrowings | - - | 8 | N/M | 2 | 20 | -90.0 | % | |||||||||||
| Total interest expense | 3,077 | 1,912 | 60.9 | % | 5,930 | 3,699 | 60.3 | % | ||||||||||
| Net interest income | 10,759 | 10,054 | 7.0 | % | 21,187 | 19,669 | 7.7 | % | ||||||||||
| Provision for loan losses | - - | 380 | N/M | 190 | 645 | -70.5 | % | |||||||||||
| Net interest income after provision for loan losses | 10,759 | 9,674 | 11.2 | % | 20,997 | 19,024 | 10.4 | % | ||||||||||
| Noninterest Income | ||||||||||||||||||
| Service charges on deposit accounts | 116 | 91 | 27.5 | % | 230 | 188 | 22.3 | % | ||||||||||
| Bank owned life insurance | 130 | 135 | -3.7 | % | 261 | 275 | -5.1 | % | ||||||||||
| Other service charges and fees | 41 | 30 | 36.7 | % | 122 | 54 | 125.9 | % | ||||||||||
| Gain on sale of securities | - - | 54 | N/M | - - | 130 | N/M | ||||||||||||
| Other real estate owned | 5 | - - | N/M | 11 | - - | N/M | ||||||||||||
| Gain on sale of fixed assets | - - | - - | N/M | - - | 1 | N/M | ||||||||||||
| Other operating income | 2 | - - | N/M | 4 | 10 | -60.0 | % | |||||||||||
| Total noninterest income | 294 | 310 | -5.2 | % | 628 | 658 | -4.6 | % | ||||||||||
| Noninterest Expenses | ||||||||||||||||||
| Salaries and employee benefits | 4,584 | 3,516 | 30.4 | % | 8,732 | 7,152 | 22.1 | % | ||||||||||
| Occupancy expense of premises | 476 | 463 | 2.8 | % | 987 | 898 | 9.9 | % | ||||||||||
| Furniture and equipment expenses | 323 | 286 | 12.9 | % | 625 | 563 | 11.0 | % | ||||||||||
| Other operating expenses | 1,735 | 1,590 | 9.1 | % | 3,259 | 3,172 | 2.7 | % | ||||||||||
| Total noninterest expenses | 7,118 | 5,855 | 21.6 | % | 13,603 | 11,785 | 15.4 | % | ||||||||||
| Income before income taxes | 3,935 | 4,129 | -4.7 | % | 8,022 | 7,897 | 1.6 | % | ||||||||||
| Income tax expense | 835 |
|
1,425 | -41.4 | % | 1,678 |
|
2,682 | -37.4 | % | ||||||||
| Net income | $ | 3,100 | $ | 2,704 | 14.6 | % | $ | 6,344 | $ | 5,215 | 21.6 | % | ||||||
| Earnings Per Share | ||||||||||||||||||
| Basic | $ | 0.24 | $ | 0.21 | 14.3 | % | $ | 0.49 | $ | 0.41 | 19.5 | % | ||||||
| Diluted | $ | 0.23 | $ | 0.20 | 15.0 | % | $ | 0.47 | $ | 0.38 | 23.7 | % | ||||||
| John Marshall Bancorp, Inc. | |||||||||||||||||||||||||||
| Loan, Deposit and Borrowing Detail (Unaudited) | |||||||||||||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||||||||||||
| June 30, 2018 | December 31, 2017 | June 30, 2017 | Percentage Change | ||||||||||||||||||||||||
| Loans | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 6 Mos | Last 12 Mos | |||||||||||||||||||
| Mortgage loans on real estate | |||||||||||||||||||||||||||
| Commercial | $ | 648,004 | 62.3 | % | $ | 577,016 | 57.1 | % | $ | 552,960 | 58.7 | % | 12.3 | % | 17.2 | % | |||||||||||
| Construction and land development | 199,787 | 19.2 | % | 218,538 | 21.7 | % | 190,090 | 20.2 | % | -8.6 | % | 5.1 | % | ||||||||||||||
| Residential | 135,689 | 13.0 | % | 135,791 | 13.5 | % | 118,087 | 12.5 | % | -0.1 | % | 14.9 | % | ||||||||||||||
| Total mortgage loans on real estate | $ | 983,480 | 94.5 | % | $ | 931,345 | 92.3 | % | $ | 861,137 | 91.4 | % | 5.6 | % | 14.2 | % | |||||||||||
| Commercial loans | 55,201 | 5.4 | % | 76,573 | 7.6 | % | 79,960 | 8.5 | % | -27.9 | % | -31.0 | % | ||||||||||||||
| Consumer loans | 1,524 | 0.1 | % | 777 | 0.1 | % | 1,358 | 0.1 | % | 96.1 | % | 12.2 | % | ||||||||||||||
| Total loans | $ | 1,040,205 | 100.0 | % | $ | 1,008,695 | 100.0 | % | $ | 942,455 | 100.0 | % | 3.1 | % | 10.4 | % | |||||||||||
| Less: Allowance for loan losses | (9,031 | ) | (8,927 | ) | (8,861 | ) | |||||||||||||||||||||
| Net deferred loan fees | (1,766 | ) | (1,823 | ) | (1,709 | ) | |||||||||||||||||||||
| Net loans | $ | 1,029,408 | $ | 997,945 | $ | 931,885 | |||||||||||||||||||||
| June 30, 2018 | December 31, 2017 | June 30, 2017 | Percentage Change | ||||||||||||||||||||||||
| Deposits | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 6 Mos | Last 12 Mos | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 206,098 | 21.2 | % | $ | 174,686 | 19.5 | % | $ | 167,920 | 19.1 | % | 18.0 | % | 22.7 | % | |||||||||||
| Interest-bearing demand deposits: | |||||||||||||||||||||||||||
| NOW accounts | 37,205 | 3.8 | % | 33,505 | 3.7 | % | 40,511 | 4.6 | % | 11.0 | % | -8.2 | % | ||||||||||||||
| Money market accounts | 170,643 | 17.5 | % | 159,508 | 17.8 | % | 156,201 | 17.8 | % | 7.0 | % | 9.2 | % | ||||||||||||||
| Savings accounts | 6,697 | 0.7 | % | 6,709 | 0.8 | % | 7,436 | 0.9 | % | -0.2 | % | -9.9 | % | ||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||
| $250,000 or more | 195,830 | 20.1 | % | 199,161 | 22.2 | % | 190,210 | 21.6 | % | -1.7 | % | 3.0 | % | ||||||||||||||
| Less than $250,000 | 110,357 | 11.3 | % | 113,374 | 12.6 | % | 106,683 | 12.1 | % | -2.7 | % | 3.4 | % | ||||||||||||||
| QwickRate® Certificates of deposit | 25,471 | 2.6 | % | 24,735 | 2.8 | % | 22,434 | 2.6 | % | 3.0 | % | 13.5 | % | ||||||||||||||
| ICS® | 81,071 | 8.3 | % | 65,293 | 7.3 | % | 60,852 | 6.9 | % | 24.2 | % | 33.2 | % | ||||||||||||||
| CDARS® | 98,089 | 10.1 | % | 77,531 | 8.6 | % | 83,573 | 9.5 | % | 26.5 | % | 17.4 | % | ||||||||||||||
| Brokered deposits | 42,979 | 4.4 | % | 42,439 | 4.7 | % | 43,014 | 4.9 | % | 1.3 | % | -0.1 | % | ||||||||||||||
| Total deposits | $ | 974,440 | 100.0 | % | $ | 896,941 | 100.0 | % | $ | 878,834 | 100.0 | % | 8.6 | % | 10.9 | % | |||||||||||
| Borrowings | |||||||||||||||||||||||||||
| Federal funds purchased | $ | - - | N/M | $ | 10,001 | 7.0 | % | $ | - - | N/M | N/M | N/M | |||||||||||||||
| Customer repurchase agreements | - - | N/M | - - | N/M | 2,723 | 2.5 | % | N/M | N/M | ||||||||||||||||||
| Federal Home Loan Bank advances | 89,500 | 78.5 | % | 108,500 | 75.9 | % | 107,000 | 97.5 | % | -17.5 | % | -16.4 | % | ||||||||||||||
| Subordinated debt | 24,556 | 21.5 | % | 24,531 | 17.1 | % | - - | N/M | 0.1 | % | N/M | ||||||||||||||||
| Total borrowings | $ | 114,056 | 100.0 | % | $ | 143,032 | 100.0 | % | $ | 109,723 | 100.0 | % | -20.3 | % | 3.9 | % | |||||||||||
| Total deposits and borrowings | $ | 1,088,496 | $ | 1,039,973 | $ | 988,557 | 4.7 | % | 10.1 | % | |||||||||||||||||
| Core customer funding sources (1) | $ | 905,990 | 83.2 | % | $ | 829,767 | 79.8 | % | $ | 816,109 | 82.6 | % | 9.2 | % | 11.0 | % | |||||||||||
| Wholesale funding sources (2) | 157,950 | 14.5 | % | 185,675 | 17.9 | % | 172,448 | 17.4 | % | -14.9 | % | -8.4 | % | ||||||||||||||
| Subordinated debt (3) | 24,556 | 2.3 | % | 24,531 | 2.3 | % | - - | N/M | 0.1 | % | N/M | ||||||||||||||||
| Total funding sources | $ | 1,088,496 | 100.0 | % | $ | 1,039,973 | 100.0 | % | $ | 988,557 | 100.0 | % | 4.7 | % | 10.1 | % | |||||||||||
| (1) | Includes ICS and CDARS(r), which are all reciprocal deposits maintained by customers, and repurchase agreements, which represent sweep accounts tied to customer operating accounts. | |
| (2) | Consists of QwickRate(r) certificates of deposit, brokered deposits and Federal Home Loan Bank advances. | |
| (3) | Subordinated debt obligation qualifies as Tier 2 capital. | |
| John Marshall Bancorp, Inc. | ||||||||||||||||||
| Average Balance Sheets, Interest and Rates (unaudited) | ||||||||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||||
| Three Months Ended June 30, 2018 | Three Months Ended June 30, 2017 | |||||||||||||||||
| Interest | Average | Interest | Average | |||||||||||||||
| Average | Income- | Yields | Average | Income- | Yields | |||||||||||||
| Balance | Expense | /Rates | Balance | Expense | /Rates | |||||||||||||
| Assets | ||||||||||||||||||
| Securities | $ | 103,833 | $ | 629 | 2.43 | % | $ | 93,167 | $ | 494 | 2.13 | % | ||||||
| Loans, net of unearned income | 1,016,173 | 12,733 | 5.03 | % | 935,582 | 11,398 | 4.89 | % | ||||||||||
| Interest-bearing deposits in other banks | 104,798 | 474 | 1.81 | % | 26,937 | 74 | 1.10 | % | ||||||||||
| Federal funds sold | 65 | - - | N/M | 58 | - - | N/M | ||||||||||||
| Total interest-earning assets | $ | 1,224,869 | $ | 13,836 | 4.53 | % | $ | 1,055,743 | $ | 11,966 | 4.55 | % | ||||||
| Other assets | 32,346 | 32,421 | ||||||||||||||||
| Total assets | $ | 1,257,215 | $ | 1,088,164 | ||||||||||||||
| Liabilities & Shareholders' equity | ||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||
| NOW accounts | $ | 70,471 | $ | 81 | 0.46 | % | $ | 50,386 | $ | 41 | 0.33 | % | ||||||
| Money market accounts | 221,677 | 441 | 0.80 | % | 192,987 | 268 | 0.56 | % | ||||||||||
| Savings accounts | 7,096 | 4 | 0.23 | % | 7,385 | 4 | 0.22 | % | ||||||||||
| Time deposits | 478,612 | 1,817 | 1.52 | % | 423,612 | 1,250 | 1.18 | % | ||||||||||
| Total interest-bearing deposits | $ | 777,856 | $ | 2,343 | 1.21 | % | $ | 674,371 | $ | 1,563 | 0.93 | % | ||||||
|
Securities sold under agreement to repurchase and federal funds purchased |
$ | - - | $ | - - | N/M | $ | 5,622 | $ | 8 | 0.57 | % | |||||||
| Subordinated debt | 24,548 | 371 | 6.06 | % | - - | - - | N/M | |||||||||||
| Other borrowed funds | 93,616 | 363 | 1.56 | % | 110,374 | 341 | 1.24 | % | ||||||||||
| Total interest-bearing liabilities | $ | 896,020 | $ | 3,077 | 1.38 | % | $ | 790,367 | $ | 1,912 | 0.97 | % | ||||||
| Demand deposits and other liabilities | 227,553 | 173,734 | ||||||||||||||||
| Total liabilities | $ | 1,123,573 | $ | 964,101 | ||||||||||||||
| Shareholders' equity | 133,642 | 124,063 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,257,215 | $ | 1,088,164 | ||||||||||||||
| Interest rate spread | 3.15 | % | 3.58 | % | ||||||||||||||
| Net interest income and margin | $ | 10,759 | 3.52 | % | $ | 10,054 | 3.82 | % | ||||||||||
| Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | |||||||||||||||||
| Interest | Average | Interest | Average | |||||||||||||||
| Average | Income- | Yields | Average | Income- | Yields | |||||||||||||
| Balance | Expense | /Rates | Balance | Expense | /Rates | |||||||||||||
| Assets | ||||||||||||||||||
| Securities | $ | 104,418 | $ | 1,242 | 2.40 | % | $ | 94,523 | $ | 1,005 | 2.14 | % | ||||||
| Loans, net of unearned income | 1,012,771 | 25,169 | 5.01 | % | 921,842 | 22,210 | 4.86 | % | ||||||||||
| Interest-bearing deposits in other banks | 82,537 | 706 | 1.72 | % | 32,366 | 153 | 0.95 | % | ||||||||||
| Federal funds sold | 63 | - - | N/M | 57 | - - | N/M | ||||||||||||
| Total interest-earning assets | $ | 1,199,789 | $ | 27,117 | 4.56 | % | $ | 1,048,788 | $ | 23,368 | 4.49 | % | ||||||
| Other assets | 31,760 | 32,152 | ||||||||||||||||
| Total assets | $ | 1,231,549 | $ | 1,080,940 | ||||||||||||||
| Liabilities & Shareholders' equity | ||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||
| NOW accounts | $ | 64,346 | $ | 136 | 0.43 | % | $ | 38,813 | $ | 56 | 0.29 | % | ||||||
| Money market accounts | 216,078 | 825 | 0.77 | % | 200,433 | 522 | 0.53 | % | ||||||||||
| Savings accounts | 6,975 | 8 | 0.23 | % | 7,312 | 8 | 0.23 | % | ||||||||||
| Time deposits | 473,980 | 3,442 | 1.46 | % | 423,982 | 2,450 | 1.17 | % | ||||||||||
| Total interest-bearing deposits | $ | 761,379 | $ | 4,411 | 1.17 | % | $ | 670,540 | $ | 3,037 | 0.91 | % | ||||||
|
Securities sold under agreement to repurchase and federal funds purchased |
$ | 166 | $ | 2 | 2.43 | % | $ | 9,229 | $ | 20 | 0.44 | % | ||||||
| Subordinated debt | 24,542 | 743 | 6.11 | % | - - | - - | N/M | |||||||||||
| Other borrowed funds | 103,815 | 774 | 1.50 | % | 106,840 | 642 | 1.21 | % | ||||||||||
| Total interest-bearing liabilities | $ | 889,902 | $ | 5,930 | 1.34 | % | $ | 786,609 | $ | 3,699 | 0.95 | % | ||||||
| Demand deposits and other liabilities | 209,467 | 171,865 | ||||||||||||||||
| Total liabilities | $ | 1,099,369 | $ | 958,474 | ||||||||||||||
| Shareholders' equity | 132,180 | 122,466 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,231,549 | $ | 1,080,940 | ||||||||||||||
| Interest rate spread | 3.22 | % | 3.54 | % | ||||||||||||||
| Net interest income and margin | $ | 21,187 | 3.56 | % | $ | 19,669 | 3.78 | % | ||||||||||
| John Marshall Bancorp, Inc. | ||||||||||||||||
| Financial Highlights (Unaudited) | ||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||
| At or For the Three Months Ended | At or For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Per share Data and Shares Outstanding(1) | ||||||||||||||||
| Earnings per share - basic | $ | 0.24 | $ | 0.21 | $ | 0.49 | $ | 0.41 | ||||||||
| Earnings per share - diluted | $ | 0.23 | $ | 0.20 | $ | 0.47 | $ | 0.38 | ||||||||
| Tangible book value per share | $ | 10.49 | $ | 9.75 | $ | 10.49 | $ | 9.75 | ||||||||
| Weighted average common shares (basic) | 12,777,343 | 12,713,798 | 12,771,488 | 12,700,987 | ||||||||||||
| Weighted average common shares (diluted) | 13,537,089 | 13,421,654 | 13,524,384 | 13,485,320 | ||||||||||||
| Common shares outstanding at end of period | 12,871,125 | 12,803,926 | 12,871,125 | 12,803,926 | ||||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average assets (annualized) | 0.99 | % | 1.00 | % | 1.04 | % | 0.97 | % | ||||||||
| Return on average equity (annualized) | 9.30 | % | 8.74 | % | 9.68 | % | 8.59 | % | ||||||||
| Yield on earning assets (annualized) | 4.53 | % | 4.55 | % | 4.56 | % | 4.49 | % | ||||||||
| Cost of interest bearing liabilities (annualized) | 1.38 | % | 0.97 | % | 1.34 | % | 0.95 | % | ||||||||
| Net interest spread | 3.15 | % | 3.58 | % | 3.22 | % | 3.54 | % | ||||||||
| Net interest margin | 3.52 | % | 3.82 | % | 3.56 | % | 3.78 | % | ||||||||
| Noninterest income as a percentage of average assets (annualized) | 0.09 | % | 0.11 | % | 0.10 | % | 0.12 | % | ||||||||
| Noninterest expense to average assets (annualized) | 2.27 | % | 2.16 | % | 2.23 | % | 2.20 | % | ||||||||
| Efficiency ratio | 64.4 | % | 56.5 | % | 62.4 | % | 58.0 | % | ||||||||
| Asset Quality | ||||||||||||||||
| Loans 30-89 days past due and accruing interest | $ | 726 | $ | 108 | $ | 726 | $ | 108 | ||||||||
| Non-accrual loans | $ | 390 | $ | 3,396 | $ | 390 | $ | 3,396 | ||||||||
| Other real estate owned | $ | 379 | $ | - - | $ | 379 | $ | - - | ||||||||
| Non-performing assets (2) | $ | 769 | $ | 3,396 | $ | 769 | $ | 3,396 | ||||||||
| Non-performing assets to total assets | 0.06 | % | 0.30 | % | 0.06 | % | 0.30 | % | ||||||||
| Allowance for loan losses to total loans | 0.87 | % | 0.94 | % | 0.87 | % | 0.94 | % | ||||||||
| Allowance for loan losses to non-performing loans | 23.2 | 2.6 | 23.2 | 2.6 | ||||||||||||
| Net loan chargeoffs (recoveries) | $ | 85 | $ | (8 | ) | $ | 86 | $ | (14 | ) | ||||||
| Net charge-offs to average loans (annualized) | 0.03 | % | 0.00 | % | 0.02 | % | 0.00 | % | ||||||||
| Troubled debt restructurings (total) | $ | 488 | $ | 501 | $ | 488 | $ | 501 | ||||||||
| Performing in accordance with modified terms | $ | 488 | $ | 501 | $ | 488 | $ | 501 | ||||||||
| Not performing in accordance with modified terms | $ | - - | $ | - - | $ | - - | $ | - - | ||||||||
| Regulatory Capital Ratios | ||||||||||||||||
| Total risk-based capital ratio | 14.9 | % | 12.3 | % | 14.9 | % | 12.3 | % | ||||||||
| Tier 1 risk-based capital ratio | 12.0 | % | 11.5 | % | 12.0 | % | 11.5 | % | ||||||||
| Leverage ratio | 10.8 | % | 11.5 | % | 10.8 | % | 11.5 | % | ||||||||
| Common equity tier 1 ratio | 12.0 | % | 11.5 | % | 12.0 | % | 11.5 | % | ||||||||
| Other Information | ||||||||||||||||
| Effective income tax rate | 21.2 | % | 34.5 | % | 20.9 | % | 34.0 | % | ||||||||
| Tangible equity / tangible assets | 11.0 | % | 11.2 | % | 11.0 | % | 11.2 | % | ||||||||
| Average tangible equity / average tangible assets | 10.6 | % | 11.4 | % | 10.7 | % | 11.3 | % | ||||||||
| Number of full time equivalent employees | 133 | 123 | 133 | 123 | ||||||||||||
| # Full service branch offices | 6 | 5 | 6 | 5 | ||||||||||||
| # Loan production or limited service branch offices | 2 | 2 | 2 | 2 | ||||||||||||
| (1) | Shares and per share amounts for all periods have been adjusted to reflect a 5 for 4 stock split in the form of a 25% stock dividend paid September 5, 2017. | |
| (2) | Non-performing assets consist of non-accrual loans, loans 90 day or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings ("TDRs") which were accruing interest at the date indicated. | |