John Marshall Bancorp, Inc. Reports 32% Diluted EPS Growth for 2019; Diversified Balance Sheet Growth and Improved Operating Leverage Drive Results

 

RESTON, Va.--()--John Marshall Bancorp, Inc. (OTCQB: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported its financial results for the three and twelve months ended December 31, 2019.

Selected Highlights

  • Record Annual Earnings - Net income increased 30.8% to $15.9 million for the twelve months ended December 31, 2019, compared to $12.2 million for the same period in 2018. Earnings per diluted share were $1.17 for the twelve months ended December 31, 2019, a 31.5% increase from $0.89 per diluted share for the twelve months ended December 31, 2018.
  • Quarterly Earnings Improvement Accelerates - Net income improved with each sequential quarter in 2019 and increased 47.5% to $4.5 million for three months ended December 31, 2019, compared to $3.0 million for the three months ended December 31, 2018. Earnings per diluted share were $0.33 for the three months ended December 31, 2019, a 50.0% increase from $0.22 per diluted share for the three months ended December 31, 2018.
  • Performance Ramps Up - 4th Quarter 2019 earnings produced an annualized Return on Average Assets (“ROAA”) of 1.14%, an increase over the 0.89% reported for the three months ended December 31, 2018. The annualized Return on Average Equity (“ROAE”) for the three months ended December 31, 2019 was 11.05%, an increase over the 8.57% reported for the three months ended December 31, 2018.
  • Strong Balance Sheet Growth Continues - Total assets increased 13.4% from $1.39 billion at December 31, 2018 to $1.58 billion at December 31, 2019. Gross loans, net of unearned income, increased 14.1% from $1.16 billion at December 31, 2018 to $1.33 billion at December 31, 2019. Total deposits grew 15.0% from $1.14 billion at December 31, 2018 to $1.31 billion at December 31, 2019.
  • Improved Funding Composition – Noninterest-bearing demand deposits grew 23.0% or $51.2 million from $222.3 million at December 31, 2018 to $273.5 at December 31, 2019. As a percentage of deposits, noninterest-bearing comprised 20.9% at December 31, 2019 and 19.5% at December 31, 2018. Consistent with our strategic plan, non-interest bearing deposits grew at a rate in excess of total deposits.
  • Focused on Expenses – For the twelve months ended December 31, 2019, total noninterest expenses grew 0.6% or $179 thousand from $28.5 million to $28.7 million. By comparison, revenue, defined as the sum of net interest income and noninterest income grew $5.1 million or 11.3% from $44.9 million for the twelve months ended December 31, 2018, to $50.0 million for the twelve months ended December 31, 2019. The Company’s efficiency ratio was 57.4% for the twelve months ended December 31, 2019 and 63.5% for the same period in 2018. The efficiency ratio was 54.4% for the three months ended December 31, 2019 and 64.4% for the same period in 2018.
  • Maintained Superb Asset Quality - There were no non-performing assets as of December 31, 2019. There were no loans 30 or more days past due and accruing interest as of December 31, 2019. Net charge-offs to average loans were 0.01% for the twelve months ended December 31, 2019.
  • Improved Tangible Book Value - Tangible book value per share at December 31, 2019 was $12.34, a 12.1% increase from $11.01 at December 31, 2018.

Christopher Bergstrom, President and Chief Executive Officer, commented, “We have the people, products, services and digital platform, including a revamped, customer-centric website, to continue to drive our growth and profitability. I would like to express my thanks to our customers and associates who made the 2019 results possible. Our intention is to continue to build upon these accomplishments in 2020. Importantly, thank you to our shareholders for your support and confidence. The team at John Marshall Bank strives to continue to earn your trust as we focus on carrying forward our momentum from 2019.”

Balance Sheet Review

Assets

Total assets were $1.58 billion at December 31, 2019, $1.51 billion at September 30, 2019 and $1.39 billion at December 31, 2018. During the fourth quarter of 2019 assets increased $68.7 million or 4.5%. Year-over-year asset growth, from December 31, 2018 to December 31, 2019, was $187.3 million or 13.4%.

Loans

Gross loans were $1.33 billion at December 31, 2019, $1.26 billion at September 30, 2019 and $1.16 billion at December 31, 2018. Gross loans, net of unearned income, increased $69.7 million or 5.5% during the fourth quarter of 2019. Year-over-year gross loans, net of unearned income, increased $164.1 million or 14.1% from December 31, 2018 to December 31, 2019.

Investment Securities

The Company’s portfolio of investments in debt securities was $122.7 million at December 31, 2019, $108.0 million at September 30, 2019 and $97.2 million at December 31, 2018. The Company also had restricted securities totaling $7.2 million at December 31, 2019, $6.5 million at September 30, 2019 and $7.3 million at December 31, 2018. The total investment portfolio growth, from December 31, 2018 to December 31, 2019, was $25.7 million, or 24.6%.

Interest Bearing Deposits in Banks

Interest-bearing deposits in banks were $87.0 million at December 31, 2019, $98.0 million at September 30, 2019 and $93.7 million at December 31, 2018. During the fourth quarter of 2019, interest-bearing deposits in banks declined as funds were deployed into higher yielding assets.

Deposits

Total deposits were $1.31 billion at December 31, 2019, $1.27 billion at September 30, 2019 and $1.14 billion at December 31, 2018. Year-over-year deposit growth, from December 31, 2018 to December 31, 2019, was $170.3 million, or 15.0%. Year-over-year, non-interest bearing deposits grew $51.2 million, or 23.0%, from December 31, 2018 to December 31, 2019. Core customer funding was $1.17 billion at December 31, 2019, $1.14 billion at September 30, 2019 and $1.05 billion at December 31, 2018.

ICS deposits were $187.4 million at December 31, 2019, $175.3 million at September 30, 2019 and $135.1 million at December 31, 2018. Year-over-year, ICS deposits increased $52.3 million from December 31, 2018 to December 31, 2019. CDARS were $50.9 million at December 31, 2019, $65.9 million at September 30, 2019 and $112.2 million at December 31, 2018. Reciprocal deposits can fluctuate with customers’ preferences to receive fixed (CDARS) or floating (ICS) yields.

Certificates of deposits were $383.5 million at December 31, 2019, $369.3 million at September 30, 2019 and $341.4 million at December 31, 2018. Year-over-year, certificates of deposits increased $42.1 million from December 31, 2018 to December 31, 2019. QwickRate certificates of deposit were $18.0 million at December 31, 2019, $17.9 million at September 30, 2019 and $20.6 million at December 31, 2018. Year-over-year QwickRate certificates of deposit decreased $2.6 million from December 31, 2018 to December 31, 2019. Brokered deposits were $125.1 million at December 31, 2019, $112.7 million at September 30, 2019 and $68.2 million at December 31, 2018. Brokered deposits increased $56.9 million from December 31, 2018 to December 31, 2019.

Borrowings

Federal funds purchased were $12.0 million at December 31, 2019 and $15.0 million at December 31, 2018. There were no Federal funds purchased at September 30, 2019. Federal funds purchased decreased $3.0 million, from December 31, 2018 to December 31, 2019. Federal Home Loan Bank advances were $62.0 million at December 31, 2019, $47.0 million at September 30, 2019 and $68.5 million at December 31, 2018. Federal Home Loan Bank advances decreased $6.5 million from December 31, 2018 to December 31, 2019.

The Company had subordinated notes with a balance of $24.6 million at December 31, 2019, September 30, 2019, and December 31, 2018. The notes qualify as Tier 2 capital for the Company for regulatory purposes.

Shareholders’ Equity and Capital Levels

Total shareholders’ equity was $162.0 million at December 31, 2019, $157.3 million at September 30, 2019 and $142.0 million at December 31, 2018. Year-over-year shareholders’ equity increased by $20.0 million, or 14.1%, primarily a result of retained earnings growth of $15.9 million. Total common shares outstanding increased from 12,900,125, including 86,400 unvested shares, at December 31, 2018, to 13,127,661, including 51,548 unvested shares, at December 31, 2019. The year-over-year increase in shares outstanding was primarily from the exercise of stock options and issuance of restricted stock.

The Company’s capital ratios remain well above regulatory minimums for well capitalized banks. As of December 31, 2019, the Company’s total risk-based capital ratio was 13.7%, compared to 13.9% at December 31, 2018.

Income Statement Review

Net Interest Income

Net interest income, the Company’s primary source of revenue, was $12.6 million for the three months ended December 31, 2019, up 8.0% from $11.6 million for the three months ended December 31, 2018. The net interest margin was 3.31% for the three months ended December 31, 2019 as compared to 3.50% for the three months ended December 31, 2018. Average net loans increased $149.6 million, or 13.2%, compared to the three months ended December 31, 2018, with an 11 basis point decrease in yield. Average securities increased $17.3 million, or 16.5%, compared to the three months ended December 31, 2018, with a 13 basis point increase in yield. The average cost of interest-bearing liabilities increased 10 basis points from 1.78% for the three months ended December 31, 2018 to 1.88% for the same period in 2019.

For the twelve months ended December 31, 2019, net interest income was $48.7 million, up 11.4% from $43.7 million for the twelve months ended December 31, 2018. The net interest margin was 3.40% during the twelve months ended December 31, 2019, compared to 3.51% during same period in 2018. Despite the decline in the net interest margin over the past year, net interest income increased, resulting primarily from a $186.8 million, or 15.0%, increase in average earning assets during the twelve months ended December 31, 2019, as compared to the same period in 2018.

On a linked quarterly basis, net interest margin declined 7 basis points to 3.31% for the three months ended December 31, 2019, with the yield on earning assets declining from 4.84% for the three months ended September 30, 2019, to 4.68% for the three months ended December 31, 2019. The continued decline in yields in the quarter was primarily a result of the three 25 basis point rate cuts made by the Federal Reserve in second half of 2019. The average cost of interest-bearing liabilities declined 10 basis points from 1.98% for the three months ended September 30, 2019, compared to 1.88% for the three months ended December 31, 2019. Funding rates typically lag as the rates are not tied to a key index and term funding does not reprice until maturity.

Provision for Loan Losses

The Company had $360 thousand in provision for loan losses for the three months ended December 31, 2019, compared to a provision of $403 thousand for the same period in 2018. The Company had no loan charge-offs during the fourth quarter of 2019 and $180 thousand in net loan charge-offs during the fourth quarter of 2018.

For the twelve months ended December 31, 2019, the Company recognized a provision for loan losses of $1.2 million, compared to a provision of $1.1 million during the same period in 2018. The increase in provision for the twelve months ended December 31, 2019 was due to growth in the loan portfolio. The Company reported $145 thousand in net loan charge-offs in 2019, compared to $265 thousand in net loan charge-offs during 2018.

Noninterest Income

The Company’s noninterest income consists primarily of bank owned life insurance income and service charges on deposit accounts. The majority of loan fees are included in interest income on the loan portfolio and not reported as noninterest income.

For the three months ended December 31, 2019, the Company reported total noninterest income of $315 thousand, an increase of $12 thousand, or 4.0%, compared to $303 thousand during the three months ended December 31, 2018.

For the twelve months ended December 31, 2019, the Company reported total noninterest income of $1.3 million, compared to $1.2 million during the same period in 2018, an increase of $98 thousand, or 7.9%. The year-over-year change for the twelve month period ended December 31, 2019 was attributable in part to an increase in service charges on deposit accounts of $48 thousand, or 9.4% increase when compared to the same period in 2018. The increase in service charges on deposit accounts is mostly related to higher ATM and debit interchange fees collected. Bank owned life insurance fee income declined $24 thousand year-over-year from 2019 to 2018 which is driven by market returns. Fees collected on CDARs balances also declined year-over-year from 2018 to 2019, which is included in other service charge fees. Noninterest income for the twelve month period ended December 31, 2019 included a $14 thousand gain on sale of securities.

Included in other operating income for the twelve months ended December 31, 2019 is $40 thousand related to insurance commissions. The Bank is party to a joint marketing agreement with an insurance company, in which the Bank has an ownership interest. The agreement calls for the Bank to earn commissions on referred business, on both new sales and renewals. The joint marketing agreement commenced during the 4th quarter of 2018, so the insurance commission income to date has been predominately new business. The Bank anticipates that insurance commission income will grow as prior year policies renew and are supplemented with new business.

Noninterest Expense

For the three months ended December 31, 2019, noninterest expense declined 8.9%, to $7.0 million, compared to $7.7 million for the same period in 2018. Salaries and employee benefit expenses was $4.2 million during the three months ended December 31, 2019, down $691 thousand, or 14.1%, when compared to $4.9 million during the three months ended December 31, 2018. Occupancy expense decreased 2.3%, or $12 thousand and furniture and equipment increased $31 thousand, or 8.8% when comparing the three months ended December 31, 2019 to the same period in 2018. Other operating expense decreased by $12 thousand, or 0.6%, when comparing the three months ended December 31, 2019 to the same period in 2018. Other operating expenses for the three month period declined due to an FDIC insurance credit received during fourth quarter of 2019.

For the twelve months ended December 31, 2019, noninterest expense increased 0.6% to $28.7 million, compared to $28.5 million for the same period in 2018. For the twelve months ended December 31, 2019 salaries and employee benefit expenses decreased $315 thousand, or 1.7% when compared to the same period in 2018. Occupancy expense increased $149 thousand, or 7.3% and furniture and equipment increased $113 thousand, or 8.6% when comparing the twelve months ended December 31, 2019 to the same period in 2018. Other operating expenses increased by $232 thousand, or 3.4% during the twelve months ended December 31, 2019, compared to the same period in 2018. The increase in other operating expenses year-over-year was mostly related to higher franchise tax in 2019.

The decline in salaries and employee benefit expenses for both the three and twelve month periods was related to the consolidation of regional executives and elimination of certain redundant positions. The increase in occupancy and furniture and equipment expenses for both the three and twelve month periods was mostly related to additional rent and furniture expenses related to the newest locations in Prince William, Virginia and Tysons, Virginia.

Asset Quality

The Company had no non-accrual loans, no loans 30 days or more past due and no other real estate owned as of December 31, 2019. The Company also had no non-accrual loans and no loans 30 days or more past due as of December 31, 2018. At December 31, 2018, other real estate owned had a balance of $379 thousand. In February 2019, the other real estate owned was sold for $379 thousand. As of December 31, 2018, non-performing assets were 0.03% of total assets.

Troubled debt restructurings were $895 thousand at December 31, 2019, an increase of $42 thousand, from $853 thousand at December 31, 2018. All troubled debt restructurings were performing in accordance with their modified terms as of December 31, 2019 and December 31, 2018.

About John Marshall Bancorp, Inc.

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. John Marshall Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, Rockville, Tysons, and Washington, D.C. and one loan production office in Arlington, Virginia. The Company is dedicated to providing an exceptional customer experience and value to local businesses, business owners and consumers in the Washington DC Metro area. The Bank offers a comprehensive line of sophisticated banking products, services and a digital platform that rival those of the largest banks. Dedicated relationship managers serving as direct point-of-contact along with an experienced staff help achieve customer’s financial goals. Learn more 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.
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,

2019

 

2018

 

2019

 

2018

Selected Balance Sheet Data
Cash and cash equivalents

$

7,471

$

7,853

$

7,471

$

7,853

Total investment securities

 

130,348

 

104,635

 

130,348

 

104,635

Loans net of unearned income

 

1,325,532

 

1,161,455

 

1,325,532

 

1,161,455

Allowance for loan losses

 

10,756

 

9,731

 

10,756

 

9,731

Total assets

 

1,581,883

 

1,394,621

 

1,581,883

 

1,394,621

Non-interest bearing demand deposits

 

273,459

 

222,299

 

273,459

 

222,299

Interest bearing deposits

 

1,035,245

 

916,069

 

1,035,245

 

916,069

Total deposits

 

1,308,704

 

1,138,368

 

1,308,704

 

1,138,368

Shareholders' equity

 

161,982

 

142,018

 

161,982

 

142,018

 
Summary Results of Operations
Interest income

$

17,796

$

16,063

$

68,990

$

57,890

Interest expense

 

5,217

 

4,415

 

20,322

 

14,190

Net interest income

 

12,579

 

11,648

 

48,668

 

43,700

Provision for loan losses

 

360

 

403

#

 

1,170

 

1,069

Net interest income after provision for loan losses

 

12,219

 

11,245

 

47,498

 

42,631

Noninterest income

 

315

 

303

 

1,335

 

1,237

Noninterest expense

 

7,018

 

7,702

 

28,701

 

28,522

Income before income taxes

 

5,516

 

3,846

 

20,132

 

15,346

Net income

 

4,472

 

3,031

 

15,921

 

12,174

 
Per share Data and Shares Outstanding
Earnings per share - basic

$

0.34

$

0.24

$

1.22

$

0.95

Earnings per share - diluted

$

0.33

$

0.22

$

1.17

$

0.89

Tangible book value per share

$

12.34

$

11.01

$

12.34

$

11.01

Weighted average common shares (basic)

 

13,044,751

 

12,803,202

 

12,991,911

 

12,783,717

Weighted average common shares (diluted)

 

13,628,507

 

13,527,479

 

13,574,984

 

13,531,858

Common shares outstanding at end of period

 

13,127,661

 

12,900,125

 

13,127,661

 

12,900,125

 
Performance Ratios
Return on average assets (annualized)

 

1.14%

 

0.89%

 

1.08%

 

0.95%

Return on average equity (annualized)

 

11.05%

 

8.57%

 

10.41%

 

8.98%

Net interest margin

 

3.31%

 

3.50%

 

3.40%

 

3.51%

Noninterest income as a percentage of average assets (annualized)

 

0.08%

 

0.09%

 

0.09%

 

0.10%

Noninterest expense to average assets (annualized)

 

1.80%

 

2.26%

 

1.95%

 

2.23%

Efficiency ratio

 

54.4%

 

64.4%

 

57.4%

 

63.5%

 
Asset Quality
Non-performing assets to total assets

 

0.00%

 

0.03%

 

0.00%

 

0.03%

Non-performing loans to total loans

 

0.00%

 

0.00%

 

0.00%

 

0.00%

Allowance for loan losses to non-performing loans

 

N/M

 

N/M

 

N/M

 

N/M

Allowance for loan losses to total loans

 

0.81%

 

0.84%

 

0.81%

 

0.84%

Net charge-offs to average loans (annualized)

 

0.00%

 

0.06%

 

0.01%

 

0.03%

 
Loans 30-89 days past due and accruing interest

$

- -

$

- -

$

- -

$

- -

Non-accrual loans

$

- -

$

- -

$

- -

$

- -

Other real estate owned

$

- -

$

379

$

- -

$

379

Non-performing assets (1)

$

- -

$

379

$

- -

$

379

Troubled debt restructurings (total)

$

895

$

853

$

895

$

853

Performing in accordance with modified terms

$

895

$

853

$

895

$

853

Not performing in accordance with modified terms

$

- -

$

- -

$

- -

$

- -

 
Capital Ratios
Tangible equity / tangible assets

 

10.2%

 

10.2%

 

10.2%

 

10.2%

Total risk-based capital ratio

 

13.7%

 

13.9%

 

13.7%

 

13.9%

Tier 1 risk-based capital ratio

 

11.2%

 

11.2%

 

11.2%

 

11.2%

Leverage ratio

 

10.4%

 

11.2%

 

10.4%

 

11.2%

Common equity tier 1 ratio

 

11.2%

 

11.2%

 

11.2%

 

11.2%

 
Other Information
Number of full time equivalent employees

 

131

 

140

 

131

 

140

# Full service branch offices

 

8

 

8

 

8

 

8

# Loan production or limited service branch offices

 

1

 

1

 

1

 

1

(1) 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.

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

2019

 

2019

 

2018

 

Months

 

Year

Assets

(Unaudited) (Unaudited) (Unaudited)
 
Cash and due from banks

$

7,471

$

11,305

$

7,853

-33.9%

-4.9%

Federal funds sold

 

- -

 

- -

 

126

N/M

N/M

Interest-bearing deposits in banks

 

87,019

 

98,000

 

93,716

-11.2%

-7.1%

Securities available-for-sale, at fair value

 

122,729

 

107,951

 

61,055

13.7%

101.0%

Securities held-to-maturity, fair value of $35,589 at 12/31/2018

 

- -

 

 

- -

 

 

36,177

 

N/M

 

N/M

Restricted securities, at cost

 

7,188

 

6,544

 

7,283

9.8%

-1.3%

Equity securities, at fair value

 

431

 

384

 

120

12.2%

259.2%

Loans net of unearned income

 

1,325,532

 

1,255,877

 

1,161,455

5.5%

14.1%

Allowance for loan losses

 

(10,756)

 

(10,396)

 

(9,731)

3.5%

10.5%

Net loans

 

1,314,776

 

1,245,481

 

1,151,724

5.6%

14.2%

Bank premises and equipment, net

 

2,318

 

2,391

 

2,852

-3.1%

-18.7%

Accrued interest receivable

 

4,010

 

3,715

 

3,623

7.9%

10.7%

Bank owned life insurance

 

20,118

 

19,993

 

19,617

0.6%

2.6%

Other real estate owned

 

- -

 

- -

 

379

N/M

N/M

Right of use assets

 

7,254

 

8,515

 

- -

-14.8%

N/M

Other assets

 

8,569

 

8,944

 

10,096

-4.2%

-15.1%

 
Total assets

$

1,581,883

$

1,513,223

$

1,394,621

4.5%

13.4%

 
Liabilities and Shareholders' Equity
 

Liabilities

Deposits:
Non-interest bearing demand deposits

$

273,459

$

254,359

$

222,299

7.5%

23.0%

Interest bearing demand deposits

 

428,529

 

424,690

 

367,656

0.9%

16.6%

Savings deposits

 

29,208

 

26,198

 

6,987

11.5%

318.0%

Time deposits

 

577,508

 

565,687

 

541,426

2.1%

6.7%

Total deposits

 

1,308,704

 

1,270,934

 

1,138,368

3.0%

15.0%

Federal funds purchased

 

12,000

 

- -

 

15,001

N/M

-20.0%

Federal Home Loan Bank advances

 

62,000

 

47,000

 

68,500

31.9%

-9.5%

Subordinated debt

 

24,630

 

24,618

 

24,581

0.0%

0.2%

Accrued interest payable

 

1,106

 

1,086

 

1,243

1.8%

-11.0%

Lease liabilities

 

7,474

 

8,782

 

- -

-14.9%

N/M

Other liabilities

 

3,987

 

3,464

 

4,910

15.1%

-18.8%

Total liabilities

 

1,419,901

 

1,355,884

 

1,252,603

4.7%

13.4%

 
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, 13,127,661 at 12/31/2019 including 51,548 unvested shares, 13,076,081 shares at 9/30/2019 including 49,068 unvested shares and 12,900,125 at 12/31/2018, including 86,400 unvested shares

 

131

 

 

130

 

 

128

 

0.8%

 

2.3%

Additional paid-in capital

 

87,435

 

86,766

 

85,127

0.8%

2.7%

Retained earnings

 

73,639

 

69,168

 

57,718

6.5%

27.6%

Accumulated other comprehensive income (loss)

 

777

 

1,275

 

(955)

39.1%

181.4%

 
Total shareholders' equity

 

161,982

 

157,339

 

142,018

3.0%

14.1%

 
Total liabilities and shareholders' equity

$

1,581,883

$

1,513,223

$

1,394,621

4.5%

13.4%

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,

 

 

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

(Unaudited)

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

 

 

Interest and Dividend Income
Interest and fees on loans

$

16,531

$

14,924

10.8%

$

63,920

$

53,716

19.0%

Interest on investment securities, taxable

 

715

 

490

45.9%

 

2,528

 

1,757

43.9%

Interest on investment securities, tax-exempt

 

19

 

79

-75.9%

 

135

 

330

-59.1%

Dividends

 

95

 

109

-12.8%

 

424

 

470

-9.8%

Interest on federal funds sold

 

- -

 

1

N/M

 

1

 

1

0.0%

Interest on deposits in banks

 

436

 

460

-5.2%

 

1,982

 

1,616

22.6%

Total interest and dividend income

 

17,796

 

16,063

10.8%

 

68,990

 

57,890

19.2%

 
Interest Expense
Deposits

 

4,645

 

3,755

23.7%

 

17,817

 

11,307

57.6%

Federal Home Loan Bank advances

 

199

 

287

-30.7%

 

1,015

 

1,393

-27.1%

Subordinated debt

 

372

 

372

0.0%

 

1,487

 

1,487

0.0%

Other short-term borrowings

 

1

 

1

0.0%

 

3

 

3

0.0%

Total interest expense

 

5,217

 

4,415

18.2%

 

20,322

 

14,190

43.2%

 
Net interest income

 

12,579

 

11,648

8.0%

 

48,668

 

43,700

11.4%

 
Provision for loan losses

 

360

 

403

-10.7%

 

1,170

 

1,069

9.4%

 
Net interest income after provision for loan losses

 

12,219

 

11,245

8.7%

 

47,498

 

42,631

11.4%

 
Noninterest Income
Service charges on deposit accounts

 

132

 

139

-5.0%

 

556

 

508

9.4%

Bank owned life insurance

 

125

 

133

-6.0%

 

501

 

525

-4.6%

Other service charges and fees

 

41

 

44

-6.8%

 

180

 

194

-7.2%

Gain on sale of securities

 

- -

 

- -

N/M

 

14

 

- -

N/M

Other operating income (loss)

 

17

 

(13)

-230.8%

 

84

 

10

740.0%

Total noninterest income

 

315

 

303

4.0%

 

1,335

 

1,237

7.9%

 
Noninterest Expenses
Salaries and employee benefits

 

4,223

 

4,914

-14.1%

 

18,012

 

18,327

-1.7%

Occupancy expense of premises

 

517

 

529

-2.3%

 

2,179

 

2,030

7.3%

Furniture and equipment expenses

 

382

 

351

8.8%

 

1,420

 

1,307

8.6%

Other operating expenses

 

1,896

 

1,908

-0.6%

 

7,090

 

6,858

3.4%

Total noninterest expenses

 

7,018

 

7,702

-8.9%

 

28,701

 

28,522

0.6%

 
Income before income taxes

 

5,516

 

3,846

43.4%

 

20,132

 

15,346

31.2%

 
Income tax expense

 

1,044

 

815

28.1%

 

4,211

 

3,172

32.8%

 
Net income

$

4,472

$

3,031

47.5%

$

15,921

$

12,174

30.8%

 
Earnings Per Share
Basic

$

0.34

$

0.24

41.7%

$

1.22

$

0.95

28.4%

Diluted

$

0.33

$

0.22

50.0%

$

1.17

$

0.89

31.5%

John Marshall Bancorp, Inc.
   
Loan, Deposit and Borrowing Detail (Unaudited)
(Dollar amounts in thousands)
   
  December 31, 2019 September 30, 2019 December 31, 2018 Percentage Change

Loans

  $ Amount % of Total $ Amount % of Total $ Amount % of Total Last 3 Mos Last 12 Mos
Mortgage loans on real estate  
Commercial  

$

794,142

59.9%

$

761,004

60.6%

$

747,342

64.2%

4.4%

6.3%

Construction and land development  

 

252,079

19.0%

 

246,561

19.6%

 

204,986

17.6%

2.2%

23.0%

Residential  

 

202,512

15.3%

 

176,661

14.0%

 

143,811

12.4%

14.6%

40.8%

Total mortgage loans on real estate  

$

1,248,733

94.2%

$

1,184,226

94.2%

$

1,096,139

94.2%

5.4%

13.9%

Commercial loans  

 

76,096

5.8%

 

71,416

5.7%

 

65,815

5.7%

6.6%

15.6%

Consumer loans  

 

653

0.0%

 

855

0.1%

 

1,198

0.1%

-23.6%

-45.5%

Total loans  

$

1,325,482

100.0%

$

1,256,497

100.0%

$

1,163,152

100.0%

5.5%

14.0%

Less: Allowance for loan losses  

 

(10,756)

 

(10,396)

 

(9,731)

Net deferred loan costs (fees)  

 

50

 

(620)

 

(1,697)

Net loans  

$

1,314,776

$

1,245,481

$

1,151,724

   
   
  December 31, 2019 September 30, 2019 December 31, 2018 Percentage Change

Deposits

  $ Amount % of Total $ Amount % of Total $ Amount % of Total Last 3 Mos Last 12 Mos
Noninterest-bearing demand deposits  

$

273,459

20.9%

$

254,359

20.0%

$

222,299

19.5%

7.5%

23.0%

Interest-bearing demand deposits:  
NOW accounts  

 

60,835

4.7%

 

66,015

5.2%

 

44,884

3.9%

-7.8%

35.5%

Money market accounts  

 

180,253

13.8%

 

183,324

14.4%

 

186,626

16.4%

-1.7%

-3.4%

Savings accounts  

 

29,208

2.2%

 

26,198

2.0%

 

6,987

0.6%

11.5%

318.0%

Certificates of deposit  
$250,000 or more  

 

255,220

19.5%

 

245,173

19.3%

 

232,491

20.4%

4.1%

9.8%

Less than $250,000  

 

128,283

9.8%

 

124,109

9.8%

 

108,911

9.6%

3.4%

17.8%

QwickRate® Certificates of deposit  

 

18,030

1.4%

 

17,851

1.4%

 

20,642

1.8%

1.0%

-12.7%

ICS®  

 

187,439

14.3%

 

175,349

13.8%

 

135,135

11.9%

6.9%

38.7%

CDARS®  

 

50,884

3.9%

 

65,877

5.2%

 

112,196

9.9%

-22.8%

-54.6%

Brokered deposits  

 

125,093

9.6%

 

112,679

8.9%

 

68,197

6.0%

11.0%

83.4%

Total deposits  

$

1,308,704

100.0%

$

1,270,934

100.0%

$

1,138,368

100.0%

3.0%

15.0%

   

Borrowings

 
Federal funds purchased  

$

12,000

12.1%

$

- -

0.0%

$

15,001

13.9%

N/M

-20.0%

Federal Home Loan Bank advances  

 

62,000

62.9%

 

47,000

65.6%

 

68,500

63.4%

31.9%

-9.5%

Subordinated debt  

 

24,630

25.0%

 

24,618

34.4%

 

24,581

22.7%

0.0%

0.2%

Total borrowings  

$

98,630

100.0%

$

71,618

100.0%

$

108,082

100.0%

37.7%

-8.7%

   
Total deposits and borrowings  

$

1,407,334

$

1,342,552

$

1,246,450

4.8%

12.9%

   
Core customer funding sources (1)  

$

1,165,581

82.8%

$

1,140,404

85.0%

$

1,049,529

84.2%

2.2%

11.1%

Wholesale funding sources (2)  

 

217,123

15.4%

 

177,530

13.2%

 

172,340

13.8%

22.3%

26.0%

Subordinated debt (3)  

 

24,630

1.8%

 

24,618

1.8%

 

24,581

2.0%

0.0%

0.2%

Total funding sources  

$

1,407,334

100.0%

$

1,342,552

100.0%

$

1,246,450

100.0%

4.8%

12.9%

(1) Includes ICS and CDARS(r), which are all reciprocal deposits maintained by customers.
(2) Consists of QwickRate(r) certificates of deposit, brokered deposits, federal funds purchased 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 December 31, 2019 Three Months Ended December 31, 2018
  Interest Average Interest Average
  Average Income- Yields Average Income- Yields
  Balance Expense /Rates Balance Expense /Rates
Assets  
Securities  

$

122,228

$

829

2.69%

$

104,961

$

678

2.56%

Loans, net of unearned income  

 

1,284,437

 

16,531

5.11%

 

1,134,841

 

14,924

5.22%

Interest-bearing deposits in other banks  

 

103,194

 

436

1.68%

 

80,437

 

460

2.27%

Federal funds sold  

 

- -

 

- -

N/M

 

128

 

1

3.10%

Total interest-earning assets  

$

1,509,859

$

17,796

4.68%

$

1,320,367

$

16,063

4.83%

Other assets  

 

40,123

 

33,632

Total assets  

$

1,549,982

$

1,353,999

Liabilities & Shareholders' equity  
Interest-bearing deposits  
NOW accounts  

$

151,188

$

413

1.08%

$

91,449

$

235

1.02%

Money market accounts  

 

285,440

 

970

1.35%

 

268,554

 

973

1.44%

Savings accounts  

 

28,541

 

101

1.40%

 

7,302

 

4

0.22%

Time deposits  

 

563,712

 

3,161

2.22%

 

527,178

 

2,543

1.91%

Total interest-bearing deposits  

$

1,028,881

$

4,645

1.79%

$

894,483

$

3,755

1.67%

   
Federal funds purchased  

$

130

$

1

3.05%

$

163

$

1

2.43%

Subordinated debt  

 

24,622

 

372

5.99%

 

24,573

 

372

6.01%

Other borrowed funds  

 

44,859

 

199

1.76%

 

64,022

 

287

1.78%

Total interest-bearing liabilities  

$

1,098,492

$

5,217

1.88%

$

983,241

$

4,415

1.78%

Demand deposits and other liabilities  

 

290,969

 

230,384

Total liabilities  

$

1,389,461

$

1,213,625

Shareholders' equity  

 

160,521

 

140,374

Total liabilities and shareholders' equity  

$

1,549,982

$

1,353,999

Interest rate spread  

2.80%

3.05%

Net interest income and margin  

$

12,579

3.31%

$

11,648

3.50%

   
   
  Twelve Months Ended December 31, 2019 Twelve Months Ended December 31, 2018
  Interest Average Interest Average
  Average Income- Yields Average Income- Yields
  Balance Expense /Rates Balance Expense /Rates
Assets  
Securities  

$

114,127

$

3,087

2.70%

$

104,214

$

2,557

2.45%

Loans, net of unearned income  

 

1,225,187

 

63,920

5.22%

 

1,056,324

 

53,716

5.09%

Interest-bearing deposits in other banks  

 

91,997

 

1,982

2.15%

 

83,935

 

1,616

1.93%

Federal funds sold  

 

54

 

1

1.84%

 

83

 

1

1.20%

Total interest-earning assets  

$

1,431,365

$

68,990

4.82%

$

1,244,556

$

57,890

4.65%

Other assets  

 

39,202

 

32,479

Total assets  

$

1,470,567

$

1,277,035

Liabilities & Shareholders' equity  
Interest-bearing deposits  
NOW accounts  

$

139,529

$

1,661

1.19%

$

75,301

$

555

0.74%

Money market accounts  

 

279,256

 

4,143

1.48%

 

234,173

 

2,577

1.10%

Savings accounts  

 

21,755

 

295

1.36%

 

6,953

 

16

0.23%

Time deposits  

 

533,633

 

11,718

2.20%

 

495,206

 

8,159

1.65%

Total interest-bearing deposits  

$

974,173

$

17,817

1.83%

$

811,633

$

11,307

1.39%

   
Federal funds purchased  

$

107

$

3

2.80%

$

123

$

3

2.44%

Subordinated debt  

 

24,604

 

1,487

6.04%

 

24,554

 

1,487

6.06%

Other borrowed funds  

 

52,333

 

1,015

1.94%

 

87,503

 

1,393

1.59%

Total interest-bearing liabilities  

$

1,051,217

$

20,322

1.93%

$

923,813

$

14,190

1.54%

Demand deposits and other liabilities  

 

266,447

 

217,712

Total liabilities  

$

1,317,664

$

1,141,525

Shareholders' equity  

 

152,903

 

135,510

Total liabilities and shareholders' equity  

$

1,470,567

$

1,277,035

Interest rate spread  

2.89%

3.11%

Net interest income and margin  

$

48,668

3.40%

$

43,700

3.51%

 

Contacts

Chris Bergstrom
(703) 584-0840

Contacts

Chris Bergstrom
(703) 584-0840