John Marshall Bancorp, Inc. Reports Quarterly Earnings of $4.5 Million

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 months ended March 31, 2020.

Chris Bergstrom, President and Chief Executive Officer, commented “John Marshall Bank is defined by our customers, employees and communities that we support. Directly or indirectly, COVID-19’s impact on each has been heart wrenching. I am incredibly proud of how the 137 associates of John Marshall Bank are rising to the pandemic’s challenge. We are leveraging our digital platform to provide critical banking services while doing all that we can to keep one another safe. John Marshall Bank entered this crisis from a position of strength; we have a well-capitalized, liquid balance sheet and exceptional asset quality. I believe we are well-situated to deliver sound financial solutions and help our constituents prevail.”

“As an example of how we are helping our customers and communities, the Company has been very active in the Paycheck Protection Program (“PPP”), as created by the United States Treasury and administered by the Small Business Association. The PPP features a loan forgiveness provision that motivates small and mid-sized businesses to retain their employees and mitigate unemployment rates resulting from the Coronavirus outbreak. Since the program’s inception on April 3, 2020, John Marshall Bank processed 610 applications, which resulted in approximately $140 million PPP loans to Virginia, Maryland and District of Columbia businesses. Approximately 80% of the loans are less than or equal to $350,000. Through these efforts we have supported hundreds of local businesses employing over 15,000 people, in aggregate.”

Balance Sheet Preparedness

John Marshall Bancorp, Inc. maintains a conservative balance sheet that management believes makes the Company well-prepared for an adverse economic environment.

  • Well-Capitalized
    • While the Company is exempt from the regulatory capital rules at the holding company level, both the Company and the Bank materially exceed the regulatory thresholds defining well-capitalized.
    • The Company has not conducted any share repurchases and does not anticipate doing so for the foreseeable future.
    • The Company’s internal capital generation rate has improved as the Company’s return on average equity approaches our asset growth rate.
  • Liquidity
    • Cash and unencumbered securities equaled $210 million, or 13.0% of total assets as of March 31, 2020.
    • Exclusive of the PPP Lending Facility, the Company had $270 million of secured borrowing capacity available at March 31, 2020.
    • The Company had significant unsecured (correspondent borrowing lines and brokered deposits) funding capacity available as of March 31, 2020.
    • The Company is considering pledging all of its PPP loans to the Federal Reserve and utilizing the PPP Lending Facility.
  • Outstanding Credit Quality
    • No non-performing assets and no loans 30 days or more past due as of March 31, 2020.
    • Cumulative net charge-offs during the Company’s 14 year history are approximately $7.4 million, or about $500,000 per year; there were no charge-offs during the first quarter of 2020.
    • The Company has identified certain industries whose products/services may be difficult to fulfill in the current economic environment (hotels, restaurants and services that may prove difficult to perform under social distancing, like dental and non-essential medical services). These loans comprise $85.6 million, or 6.4% of the loan portfolio as of March 31, 2020.

Financial Results

  • The Company reported net income of $4.50 million for the three months ended March 31, 2020, a 24.7% increase over the $3.61 million reported for the three months ended March 31, 2019. Net income was $4.47 million for the three months ended December 31, 2019. Diluted earnings per share was $0.33 for the three months ended March 31, 2020, a 22.2% increase over $0.27 per diluted share for the three months ended March 31, 2019. Diluted earnings per share was $0.33 for the three months ended December 31, 2019.
  • Quarterly return on average assets (“ROAA”) was 1.14% for the three months ended March 31, 2020, up from 1.04% for the three months ended March 31, 2019, or a 9.6% increase from a year ago, and equal to the 1.14% for the three months ended December 31, 2019. Quarterly return on average equity (“ROAE”) was 10.87% for the three months ended March 31, 2020, relative to 10.09% for the three months ended March 31, 2019 and 11.05% for the three months ended December 31, 2019. The ROAE decrease from the fourth quarter of 2019 was a function of a higher provision for loan losses and the Company’s larger equity base (from net income as well as unrealized gains on available-for-sale securities reflected in accumulated other comprehensive income), all in the first quarter of 2020.
  • Core customer deposits grew $45.7 million, or 15.8% annualized, since December 31, 2019 and represented 84.1% of all funding sources at March 31, 2020. Wholesale funding decreased $12.0 million, or 22.2% annualized, since December 31, 2019. Wholesale funding represented 14.2% of total funding sources at March 31, 2020.
  • The Company continues to increase operating leverage by growing revenues (Net interest income + Noninterest income) faster than overhead. Revenues for the three months ended March 31, 2020 were $13.1 million, or 10.0% greater than the $11.9 million for the three months ended March 31, 2019. Noninterest expense for the first quarter of 2020 was $7.1 million, or 1.5% greater than the $7.0 million for the first quarter of 2019. The efficiency ratio for the first quarter of 2020 was 54.6% versus 59.2% for the first quarter of 2019 and 54.4% for the fourth quarter of 2019. Annualized noninterest expense relative to average assets was 1.81%, 1.80% and 2.03% for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

Balance Sheet Review

Assets

Total assets were $1.62 billion at March 31, 2020, $1.58 billion at December 31, 2019 and $1.43 billion at March 31, 2019. During the first quarter of 2020 assets increased $41.2 million, or 2.6%. Year-over-year asset growth, from March 31, 2019 to March 31, 2020, was $197.6 million, or 13.9%.

Loans

Gross loans net of unearned income were $1.34 billion at March 31, 2020, $1.33 billion at December 31, 2019 and $1.18 billion at March 31, 2019. During the first quarter of 2020 gross loans net of unearned income grew $11.3 million, or 0.9%. Year-over-year gross loans net of unearned income increased $159.5 million, or 13.5% from March 31, 2019 to March 31, 2020. Despite strong loan originations during the first quarter of 2020, an unprecedented level of loan payoffs and paydowns totaling $120.2 million offset most of the production growth during the first quarter of 2020.

Investment Securities

The Company’s portfolio of investments in debt securities was $139.4 million at March 31, 2020, $122.7 million at December 31, 2019 and $104.2 million at March 31, 2019. During the first quarter of 2020 fixed income investments increased $16.7 million, or 13.6%. Year-over-year bond growth from March 31, 2019 to March 31, 2020 was $35.2 million, or 33.8%.

Interest-Bearing Deposits in Banks

Interest-bearing deposits in banks were $101.7 million at March 31, 2020, $87.0 million at December 31, 2019 and $96.4 million at March 31, 2019. The higher cash balances at March 31, 2020 were the result of the recent deposit growth. These funds will continue to be deployed into higher earning assets.

Deposits

Total deposits were $1.38 billion at March 31, 2020, $1.31 billion at December 31, 2019 and $1.18 billion at March 31, 2019. During the first quarter of 2020 deposits grew $70.7 million, or 5.4%. Year-over-year deposit growth, from March 31, 2019 to March 31, 2020, was $200.9 million, or 17.0%.

Core customer funding was $1.21 billion at March 31, 2020, $1.17 billion at December 31, 2019 and $1.10 billion at March 31, 2019. During the first quarter of 2020 core customer funding increased $45.8 million, or 3.9%. Year-over-year core customer funding sources increased by $115.8 million, or 10.6%, from March 31, 2019 to March 31, 2020. Core customer funding was 84.1% of all funding sources as of March 31, 2020, as compared to 82.8% at December 31, 2019 and 86.6% as of March 31, 2019.

Insured Cash Sweep (“ICS”) deposits were $211.5 million at March 31, 2020, $187.4 million at December 31, 2019 and $154.6 million at March 31, 2019. During the first quarter of 2020 ICS deposits grew $24.1 million, or 12.8%. Year-over-year, ICS deposits increased $56.9 million, or 36.8% from March 31, 2019 to March 31, 2020. Certificate of Deposit Account Registry Service (“CDARS”) were $57.4 million at March 31, 2020, $50.9 million at December 31, 2019 and $91.0 million at March 31, 2019.

Certificates of deposits were $378.0 million at March 31, 2020, $383.5 million at December 31, 2019 and $329.5 million at March 31, 2019. QwickRate certificates of deposit were $20.0 million at March 31, 2020, $18.0 million at December 31, 2019 and $19.6 million at March 31, 2019. Brokered deposits were $148.1 million at March 31, 2020, $125.1 million at December 31, 2019 and $63.4 million at March 31, 2019. Brokered deposits increased $84.7 million from March 31, 2019 to March 31, 2020. The increase in brokered funds was related to the pay down of Federal Home Loan Bank of Atlanta (“FHLB”) advances.

Borrowings

Total borrowings, consisting of FHLB advances and Federal funds purchased, were $37.0 million at March 31, 2020, $74.0 million at December 31, 2019 and $61.5 million at March 31, 2019. During the first quarter of 2020 borrowings declined $37.0 million, or 50.0%. Total borrowings decreased $24.5 million, or 39.8%, from March 31, 2019 to March 31, 2020. In order to manage cost of funds and preserve borrowing capacity, FHLB advances were paid down and replaced with brokered deposits.

Wholesale funding, which includes QwickRate certificates, brokered deposits, Federal funds purchased and FHLB borrowings, was $205.1 million at March 31, 2020, $217.1 million at December 31, 2019 and $144.6 million at March 31, 2019. Wholesale funding decreased $12.0 million during the first three months of 2020. Year-over-year, wholesale funding increased $60.6 million from March 31, 2019 to March 31, 2020.

The Company had subordinated notes with balances of $24.6 million at March 31, 2020, December 31, 2019 and March 31, 2019. The notes qualify as Tier 2 capital for the Company for regulatory purposes.

Shareholders’ Equity and Capital Levels

Total shareholders’ equity was $170.8 million at March 31, 2020, $162.0 million at December 31, 2019 and $147.2 million at March 31, 2019. Year-over-year shareholders’ equity increased by $23.5 million, or 16.0%. Total common shares outstanding increased from 13,034,794, including 59,604 unvested shares, at March 31, 2019, to 13,445,479, including 55,908 unvested shares, at March 31, 2020. The year-over-year increase in shares outstanding was primarily from the exercise of stock options.

The Company’s capital ratios remain well above regulatory thresholds for well capitalized banks. As of March 31, 2020, the Company’s total risk-based capital ratio was 14.1%, compared to 14.0% at March 31, 2019.

Income Statement Review

Net Interest Income

Net interest income, the Company’s primary source of revenue, was $12.8 million for the three months ended March 31, 2020, up 10.8% from $11.6 million for the three months ended March 31, 2019. The net interest margin was 3.33% for the three months ended March 31, 2020 as compared to 3.43% for the three months ended March 31, 2019. Average net loans increased $155.4 million compared to the three months ended March 31, 2019, with a 19 basis point decrease in yield. Average securities increased $29.6 million, or 27.6%, compared to the three months ended March 31, 2019, with a 9 basis point decline in yield. Average interest-bearing deposits in other banks declined $3.0 million compared to the three months ended March 31, 2019, with a 115 basis point decrease in yield. The average cost of interest-bearing liabilities declined 13 basis points when comparing the three months ended March 31, 2019 to the three months ended March 31, 2020. During the first quarter of 2020, the Federal Reserve made a 50 basis point rate cut on March 3, 2020 and an additional 100 basis point rate cut on March 15, 2020 which adversely impacted the earning asset yield.

On a linked quarterly basis, net interest margin increased 2 basis points to 3.33% for the three months ended March 31, 2020, with the yield on earning assets declining from 4.68% for the three months ended December 31, 2019, to 4.62% for the three months ended March 31, 2020. The average cost of interest-bearing liabilities declined 11 basis points from 1.88% for the three months ended December 31, 2019, compared to 1.77% for the three months ended March 31, 2020.

Provision for Loan Losses

The Company had a $419 thousand provision for loan losses for the three months ended March 31, 2020, compared to a provision of $221 thousand for the same period in 2019. The Company had no loan charge-offs during the first quarter of 2020, compared to net loan charge-offs of $169 thousand in the first quarter of 2019. The increase in the Company’s provision for loan losses during the first quarter of 2020 as compared to the corresponding period in the prior year was primarily related to our consideration of COVID-19 and its impact on the qualitative factors included in the allowance estimate. The provision increased the allowance for loan losses as a percentage of total loans from 0.81% at December 31, 2019 to 0.84% at March 31, 2020. Management will continue to evaluate the adequacy of its allowance for loan losses as more economic data becomes available and as changes within the Company's portfolio are known. The effects of the pandemic may require the Company to fund additional increases in the allowance for loan losses in future periods.

The Company continues to calculate its allowance for loan losses and determine the related provisions using an incurred loss model. Based on the November 2019 amendment of the current expected credit losses (“CECL”) standard, the Company does not anticipate implementing CECL until January 2023.

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 March 31, 2020, the Company reported total noninterest income of $244 thousand, compared to $307 thousand during the three months ended March 31, 2019. The decrease in noninterest income was primarily attributed to the mark-to-market adjustments of $(96) thousand made to equity securities during the first quarter of 2020. Noninterest income for the three months ended March 31, 2020 included a $12 thousand net gain on sale of securities. Other operating income for the three months ended March 31, 2020, included a $28 thousand increase in insurance commissions as compared to the three months ended March 31, 2019.

Noninterest Expense

For the three months ended March 31, 2020, noninterest expense increased 1.5%, to $7.1 million, compared to $7.0 million for the same period in 2019. Salaries and employee benefit expense was $4.5 million during the three months ended March 31, 2020, down $124 thousand, or 2.7%, when compared to $4.6 million during the three months ended March 31, 2019. Occupancy expense decreased 9.8%, or $53 thousand and furniture and equipment increased $34 thousand, or 10.1% when comparing the three months ended March 31, 2020 to the same period in 2019. Occupancy expense declined in the first quarter of 2020 due to the renegotiation of leases at the end of the fourth quarter in 2019. Other operating expense increased by $250 thousand, or 16.1%, when comparing the three months ended March 31, 2020 to the same period in 2019. The majority of the increase in other operating expenses is related to higher FDIC insurance expense and franchise taxes.

Asset Quality

The Company had no non-accrual loans, no loans 30 days or more past due and no other real estate owned for the second consecutive quarter as of March 31, 2020. As of March 31, 2019, non-accrual loans totaled $1.4 million. Non-performing assets were 0.00% of total assets at March 31, 2020 compared to 0.10% of total assets at March 31, 2019. The Company had no other real estate owned as of March 31, 2020 and 2019.

Troubled debt restructurings (“TDR”) were $647 thousand at March 31, 2020, a 72.4% decline from $2.3 million at March 31, 2019. All troubled debt restructurings were performing in accordance with their modified terms as of March 31, 2020. There were $935 thousand of the troubled debt restructurings that were performing in accordance with their modified terms as of March 31, 2019. There were no new TDRs during the first quarter of 2020.

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 D.C. 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.

In addition to historical information, this press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which 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. The Company’s 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 its subsidiary include, but are not limited to the following: changes in interest rates, general economic conditions, public health crises (such as the governmental, social and economic effects of the novel coronavirus), levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, 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, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines and other conditions which by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty. 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
March 31,

 

2020

 

 

2019

 

Selected Balance Sheet Data
Cash and cash equivalents

$

8,762

 

$

5,709

 

Total investment securities

 

146,371

 

 

111,447

 

Loans net of unearned income

 

1,336,821

 

 

1,177,319

 

Allowance for loan losses

 

11,176

 

 

9,783

 

Total assets

 

1,623,045

 

 

1,425,477

 

Non-interest bearing demand deposits

 

274,878

 

 

228,826

 

Interest bearing deposits

 

1,104,564

 

949,708

 

Total deposits

 

1,379,442

 

 

1,178,534

 

Shareholders' equity

 

170,771

 

 

147,226

 

 
Summary Results of Operations
Interest income

$

17,818

 

$

16,377

 

Interest expense

 

4,991

 

 

4,798

 

Net interest income

 

12,827

 

 

11,579

 

Provision for loan losses

 

419

 

 

221

 

Net interest income after provision for loan losses

 

12,408

 

 

11,358

 

Noninterest income

 

244

 

 

307

 

Noninterest expense

 

7,140

 

 

7,033

 

Income before income taxes

 

5,512

 

 

4,632

 

Net income

 

4,501

 

 

3,610

 

 
Per share Data and Shares Outstanding
Earnings per share - basic

$

0.34

 

$

0.28

 

Earnings per share - diluted

$

0.33

 

$

0.27

 

Tangible book value per share

$

12.70

 

$

11.29

 

Weighted average common shares (basic)

 

13,282,179

 

 

12,910,845

 

Weighted average common shares (diluted)

 

13,688,921

 

 

13,532,074

 

Common shares outstanding at end of period

 

13,445,479

 

 

13,034,794

 

 
Performance Ratios
Return on average assets (annualized)

 

1.14

%

 

1.04

%

Return on average equity (annualized)

 

10.87

%

 

10.09

%

Net interest margin

 

3.33

%

 

3.43

%

Noninterest income as a percentage of average assets (annualized)

 

0.06

%

 

0.09

%

Noninterest expense to average assets (annualized)

 

1.81

%

 

2.03

%

Efficiency ratio

 

54.6

%

 

59.2

%

 
Asset Quality
Non-performing assets to total assets

 

0.00

%

 

0.10

%

Non-performing loans to total loans

 

0.00

%

 

0.12

%

Allowance for loan losses to non-performing loans

 

N/M

 

7.0x
Allowance for loan losses to total loans

 

0.84

%

 

0.83

%

Net charge-offs to average loans (annualized)

 

0.00

%

 

0.06

%

 
Loans 30-89 days past due and accruing interest

$

- -

 

$

- -

 

Non-accrual loans

$

- -

 

$

1,406

 

Other real estate owned

$

- -

 

$

- -

 

Non-performing assets (1)

$

- -

 

$

1,406

 

Troubled debt restructurings (total)

$

647

 

$

2,341

 

Performing in accordance with modified terms

$

647

 

$

935

 

Not performing in accordance with modified terms

$

- -

 

$

1,406

 

 
Capital Ratios
Tangible equity / tangible assets

 

10.5

%

 

10.3

%

Total risk-based capital ratio

 

14.1

%

 

14.0

%

Tier 1 risk-based capital ratio

 

11.6

%

 

11.3

%

Leverage ratio

 

10.5

%

 

10.5

%

Common equity tier 1 ratio

 

11.6

%

 

11.3

%

 
Other Information
Number of full time equivalent employees

 

137

 

 

141

 

# Full service branch offices

 

8

 

 

8

 

# Loan production or limited service branch offices

 

1

 

 

1

 

(1) Non-performing assets consist of non-accrual loans, loans 90 day or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings which were accruing interest at the date indicated.

John Marshall Bancorp, Inc.
   
Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data)
   
  % Change
  March 31, December 31, March 31, Last Three Year Over
 

 

2020

 

 

2019

 

 

2019

 

Months Year
Assets   (Unaudited) (Unaudited) (Unaudited)
   
Cash and due from banks  

$

8,762

 

$

7,471

 

$

5,709

 

17.3

%

53.5

%

Federal funds sold  

 

- -

 

 

- -

 

 

78

 

N/M

 

N/M

 

Interest-bearing deposits in banks  

 

101,728

 

 

87,019

 

 

96,376

 

16.9

%

5.6

%

Securities available-for-sale, at fair value  

 

139,413

 

 

122,729

 

 

72,284

 

13.6

%

92.9

%

Securities held-to-maturity, fair value of $31,801  
at 3/31/2019  

 

- -

 

 

- -

 

 

31,896

 

N/M

 

N/M

 

Restricted securities, at cost  

 

6,343

 

 

7,188

 

 

7,147

 

-11.8

%

-11.2

%

Equity securities, at fair value  

 

615

 

 

431

 

 

120

 

42.7

%

412.5

%

Loans net of unearned income  

 

1,336,821

 

 

1,325,532

 

 

1,177,319

 

0.9

%

13.5

%

Allowance for loan losses  

 

(11,176

)

 

(10,756

)

 

(9,783

)

3.9

%

14.2

%

Net loans  

 

1,325,645

 

 

1,314,776

 

 

1,167,536

 

0.8

%

13.5

%

Bank premises and equipment, net  

 

2,260

 

 

2,318

 

 

2,668

 

-2.5

%

-15.3

%

Accrued interest receivable  

 

3,982

 

 

4,010

 

 

4,030

 

-0.7

%

-1.2

%

Bank owned life insurance  

 

20,237

 

 

20,118

 

 

19,743

 

0.6

%

2.5

%

Right of use assets  

 

6,929

 

 

7,254

 

 

9,204

 

-4.5

%

-24.7

%

Other assets  

 

7,131

 

 

8,569

 

 

8,686

 

-16.8

%

-17.9

%

   
Total assets  

$

1,623,045

 

$

1,581,883

 

$

1,425,477

 

2.6

%

13.9

%

   
Liabilities and Shareholders' Equity  
   
Liabilities  
Deposits:  
Non-interest bearing demand deposits  

$

274,878

 

$

273,459

 

$

228,826

 

0.5

%

20.1

%

Interest bearing demand deposits  

 

468,330

 

 

428,529

 

 

430,512

 

9.3

%

8.8

%

Savings deposits  

 

32,745

 

 

29,208

 

 

15,628

 

12.1

%

109.5

%

Time deposits  

 

603,489

 

 

577,508

 

 

503,568

 

4.5

%

19.8

%

Total deposits  

 

1,379,442

 

 

1,308,704

 

 

1,178,534

 

5.4

%

17.0

%

Federal funds purchased  

 

- -

 

 

12,000

 

 

- -

 

N/M

 

N/M

 

Federal Home Loan Bank advances  

 

37,000

 

 

62,000

 

 

61,500

 

-40.3

%

-39.8

%

Subordinated debt  

 

24,642

 

 

24,630

 

 

24,593

 

0.0

%

0.2

%

Accrued interest payable  

 

899

 

 

1,106

 

 

780

 

-18.7

%

15.3

%

Lease liabilities  

 

7,172

 

 

7,474

 

 

9,431

 

-4.0

%

-24.0

%

Other liabilities  

 

3,119

 

 

3,987

 

 

3,413

 

-21.8

%

-8.6

%

Total liabilities  

 

1,452,274

 

 

1,419,901

 

 

1,278,251

 

2.3

%

13.6

%

   
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, 13,445,479  
at 3/31/2020 including 55,908 unvested shares, 13,127,661  
shares at 12/31/2019 including 51,548 unvested shares  
and 13,034,794 at 3/31/2019, including 59,604 unvested shares  

 

134

 

 

131

 

 

130

 

2.3

%

3.1

%

Additional paid-in capital  

 

88,890

 

 

87,435

 

 

86,052

 

1.7

%

3.3

%

Retained earnings  

 

78,141

 

 

73,639

 

 

61,329

 

6.1

%

27.4

%

Accumulated other comprehensive income (loss)  

 

3,606

 

 

777

 

 

(285

)

364.1

%

N/M

 

   
Total shareholders' equity  

 

170,771

 

 

161,982

 

 

147,226

 

5.4

%

16.0

%

   
Total liabilities and shareholders' equity  

$

1,623,045

 

$

1,581,883

 

$

1,425,477

 

2.6

%

13.9

%

John Marshall Bancorp, Inc.
   
Consolidated Statements of Income
(Dollar amounts in thousands, except per share data)
   
  Three Months Ended
  March 31,
 

 

2020

 

 

2019

% Change

  (Unaudited) (Unaudited)
Interest and Dividend Income  
Interest and fees on loans  

$

16,625

 

$

15,078

10.3

%

Interest on investment securities, taxable  

 

772

 

 

529

45.9

%

Interest on investment securities, tax-exempt  

 

26

 

 

72

-63.9

%

Dividends  

 

95

 

 

116

-18.1

%

Interest on federal funds sold  

 

- -

 

 

1

N/M

 

Interest on deposits in banks  

 

300

 

 

581

-48.4

%

Total interest and dividend income  

 

17,818

 

 

16,377

8.8

%

   
Interest Expense  
Deposits  

 

4,458

 

 

4,086

9.1

%

Federal Home Loan Bank advances  

 

160

 

 

338

-52.7

%

Subordinated debt  

 

372

 

 

372

0.0

%

Other short-term borrowings  

 

1

 

 

2

-50.0

%

Total interest expense  

 

4,991

 

 

4,798

4.0

%

   
Net interest income  

 

12,827

 

 

11,579

10.8

%

   
Provision for loan losses  

 

419

 

 

221

89.6

%

   
Net interest income after provision for loan losses  

 

12,408

 

 

11,358

9.2

%

   
Noninterest Income  
Service charges on deposit accounts  

 

134

 

 

136

-1.5

%

Bank owned life insurance  

 

119

 

 

126

-5.6

%

Other service charges and fees  

 

47

 

 

43

9.3

%

Gain on sale of securities  

 

12

 

 

- -

N/M

 

Other operating (loss) income  

 

(68

)

 

2

N/M

 

Total noninterest income  

 

244

 

 

307

-20.5

%

   
Noninterest Expenses  
Salaries and employee benefits  

 

4,486

 

 

4,610

-2.7

%

Occupancy expense of premises  

 

487

 

 

540

-9.8

%

Furniture and equipment expenses  

 

369

 

 

335

10.1

%

Other operating expenses  

 

1,798

 

 

1,548

16.1

%

Total noninterest expenses  

 

7,140

 

 

7,033

1.5

%

   
Income before income taxes  

 

5,512

 

 

4,632

19.0

%

   
Income tax expense  

 

1,011

 

 

1,022

-1.1

%

   
Net income  

$

4,501

 

$

3,610

24.7

%

   
Earnings Per Share  
Basic  

$

0.34

 

$

0.28

21.4

%

Diluted  

$

0.33

 

$

0.27

22.2

%

John Marshall Bancorp, Inc.
   
Loan, Deposit and Borrowing Detail (Unaudited)
(Dollar amounts in thousands)
   
  March 31, 2020 December 31, 2019 March 31, 2019 Percentage Change
Loans   $ Amount % of Total $ Amount % of Total $ Amount % of Total Last 3 Mos Last 12 Mos
Mortgage loans on real estate  
Commercial  

$

783,535

 

58.6

%

$

794,142

 

59.9

%

$

736,620

 

62.5

%

-1.3

%

6.4

%

Construction and land development  

 

243,023

 

18.2

%

 

252,079

 

19.0

%

 

226,499

 

19.2

%

-3.6

%

7.3

%

Residential  

 

227,172

 

17.0

%

 

202,512

 

15.3

%

 

149,437

 

12.7

%

12.2

%

52.0

%

Total mortgage loans on real estate  

$

1,253,730

 

93.8

%

$

1,248,733

 

94.2

%

$

1,112,556

 

94.4

%

0.4

%

12.7

%

Commercial loans  

 

81,553

 

6.1

%

 

76,096

 

5.8

%

 

65,334

 

5.5

%

7.2

%

24.8

%

Consumer loans  

 

1,099

 

0.1

%

 

653

 

0.0

%

 

777

 

0.1

%

68.3

%

41.4

%

Total loans  

$

1,336,382

 

100.0

%

$

1,325,482

 

100.0

%

$

1,178,667

 

100.0

%

0.8

%

13.4

%

Less: Allowance for loan losses  

 

(11,176

)

 

(10,756

)

 

(9,783

)

Net deferred loan costs (fees)  

 

439

 

 

50

 

 

(1,348

)

Net loans  

$

1,325,645

 

$

1,314,776

 

$

1,167,536

 

   
   
  March 31, 2020 December 31, 2019 March 31, 2019 Percentage Change
Deposits   $ Amount % of Total $ Amount % of Total $ Amount % of Total Last 3 Mos Last 12 Mos
Noninterest-bearing demand deposits  

$

274,878

 

19.9

%

$

273,459

 

20.9

%

$

228,826

 

19.4

%

0.5

%

20.1

%

Interest-bearing demand deposits:  
NOW accounts  

 

74,892

 

5.4

%

 

60,835

 

4.7

%

 

70,933

 

6.0

%

23.1

%

5.6

%

Money market accounts  

 

181,944

 

13.2

%

 

180,253

 

13.8

%

 

204,996

 

17.4

%

0.9

%

-11.2

%

Savings accounts  

 

32,745

 

2.4

%

 

29,208

 

2.2

%

 

15,628

 

1.3

%

12.1

%

109.5

%

Certificates of deposit  
$250,000 or more  

 

249,802

 

18.1

%

 

255,220

 

19.5

%

 

215,304

 

18.3

%

-2.1

%

16.0

%

Less than $250,000  

 

128,176

 

9.3

%

 

128,283

 

9.8

%

 

114,233

 

9.7

%

-0.1

%

12.2

%

QwickRate® Certificates of deposit  

 

20,011

 

1.5

%

 

18,030

 

1.4

%

 

19,645

 

1.7

%

11.0

%

1.9

%

ICS®  

 

211,492

 

15.3

%

 

187,439

 

14.3

%

 

154,579

 

13.1

%

12.8

%

36.8

%

CDARS®  

 

57,398

 

4.2

%

 

50,884

 

3.9

%

 

90,977

 

7.7

%

12.8

%

-36.9

%

Brokered deposits  

 

148,104

 

10.7

%

 

125,093

 

9.6

%

 

63,413

 

5.4

%

18.4

%

133.6

%

Total deposits  

$

1,379,442

 

100.0

%

$

1,308,704

 

100.0

%

$

1,178,534

 

100.0

%

5.4

%

17.0

%

   
Borrowings  
Federal funds purchased  

$

- -

 

N/M

 

$

12,000

 

12.1

%

$

- -

 

N/M

 

N/M

 

N/M

 

Federal Home Loan Bank advances  

 

37,000

 

60.0

%

 

62,000

 

62.9

%

 

61,500

 

71.4

%

-40.3

%

-39.8

%

Subordinated debt  

 

24,642

 

40.0

%

 

24,630

 

25.0

%

 

24,593

 

28.6

%

0.0

%

0.2

%

Total borrowings  

$

61,642

 

100.0

%

$

98,630

 

100.0

%

$

86,093

 

100.0

%

-37.5

%

-28.4

%

   
Total deposits and borrowings  

$

1,441,084

 

$

1,407,334

 

$

1,264,627

 

2.4

%

14.0

%

   
Core customer funding sources (1)  

$

1,211,327

 

84.1

%

$

1,165,581

 

82.8

%

$

1,095,476

 

86.6

%

3.9

%

10.6

%

Wholesale funding sources (2)  

 

205,115

 

14.2

%

 

217,123

 

15.4

%

 

144,558

 

11.4

%

-5.5

%

41.9

%

Subordinated debt (3)  

 

24,642

 

1.7

%

 

24,630

 

1.8

%

 

24,593

 

2.0

%

0.0

%

0.2

%

Total funding sources  

$

1,441,084

 

100.0

%

$

1,407,334

 

100.0

%

$

1,264,627

 

100.0

%

2.4

%

14.0

%

(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 March 31, 2020 Three Months Ended March 31, 2019
  Interest Average Interest Average
  Average Income- Yields Average Income- Yields
  Balance Expense /Rates Balance Expense /Rates
Assets  
Securities  

$

136,918

$

893

2.62

%

$

107,332

$

717

2.71

%

Loans, net of unearned income  

 

1,320,447

 

16,625

5.06

%

 

1,165,002

 

15,078

5.25

%

Interest-bearing deposits in other banks  

 

93,474

 

300

1.29

%

 

96,444

 

581

2.44

%

Federal funds sold  

 

- -

 

- -

N/M

 

 

115

 

1

3.53

%

Total interest-earning assets  

$

1,550,839

$

17,818

4.62

%

$

1,368,893

$

16,377

4.85

%

Other assets  

 

38,732

 

33,585

Total assets  

$

1,589,571

$

1,402,478

Liabilities & Shareholders' equity  
Interest-bearing deposits  
NOW accounts  

$

149,077

$

345

0.93

%

$

122,517

$

347

1.15

%

Money market accounts  

 

292,886

 

902

1.24

%

 

278,890

 

1,033

1.50

%

Savings accounts  

 

30,797

 

101

1.32

%

 

9,965

 

16

0.65

%

Time deposits  

 

592,889

 

3,110

2.11

%

 

521,409

 

2,690

2.09

%

Total interest-bearing deposits  

$

1,065,649

$

4,458

1.68

%

$

932,781

$

4,086

1.78

%

   
Federal funds purchased  

$

132

$

1

3.05

%

$

300

$

2

2.70

%

Subordinated debt  

 

24,635

 

372

6.07

%

 

24,585

 

372

6.14

%

Other borrowed funds  

 

44,703

 

160

1.44

%

 

67,133

 

338

2.04

%

Total interest-bearing liabilities  

$

1,135,119

$

4,991

1.77

%

$

1,024,799

$

4,798

1.90

%

Demand deposits and other liabilities  

 

287,850

 

232,580

Total liabilities  

$

1,422,969

$

1,257,379

Shareholders' equity  

 

166,602

 

145,099

Total liabilities and shareholders' equity  

$

1,589,571

$

1,402,478

Interest rate spread  

2.85

%

2.95

%

Net interest income and margin  

$

12,827

3.33

%

$

11,579

3.43

%

 

Contacts

Chris Bergstrom
(703) 584-0840

Contacts

Chris Bergstrom
(703) 584-0840