JMSB Reports 54.3% Increase in Quarterly Diluted EPS and Record Loan Growth

Rhea-AI Summary

John Marshall Bancorp, Inc. (OTCQB: JMSB) reported robust financial results for the year ended December 31, 2021. Total assets increased by 14.0% to $2.15 billion, with gross loans growing 10.4% and total deposits rising 14.7%. The company achieved a 57.1% rise in net income, reaching $7.5 million for Q4, and a 37.4% increase for the year, totaling $25.5 million. Notably, it marks the twelfth consecutive quarter of record earnings. The bank maintained a strong credit quality, with no non-performing loans and a 1.25% return on average assets for the year.

Positive

• Total assets grew by 14.0% to $2.15 billion year-over-year.
• Net income surged 57.1% to $7.5 million for Q4 and increased 37.4% to $25.5 million for the year.
• Gross loans increased by 10.4% year-over-year.
• Non-interest bearing deposits rose by 34.8% year-over-year.
• Strong asset quality maintained with no non-performing loans reported.

Negative

• None.

RESTON, Va.--(BUSINESS WIRE)-- 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, 2021.

Selected Highlights

• Strong Growth – Year-over-year total assets increased 14.0% or $263.8 million to $2.15 billion at December 31, 2021. Excluding Paycheck Protection Program (“PPP”) loans, gross loans net of unearned income grew $150.7 million or 10.4% from December 31, 2020 to December 31, 2021. Total deposits grew $241.4 million or 14.7% from December 31, 2020 to December 31, 2021. Non-interest bearing demand deposits grew $126.3 million or 34.8% from December 31, 2020 to December 31, 2021. During the fourth quarter, the Company experienced record loan growth, net of unearned income and PPP.

• Record Returns – Return on Average Assets (ROAA) was 1.25% and Return on Average Equity (ROAE) was 12.90% for the twelve months ended December 31, 2021. Annualized ROAA was 1.41% and ROAE was 14.52% for the three months ended December 31, 2021. Excluding 2010, when the Company realized a significant, non-recurring income tax benefit from the removal of the valuation allowance on its deferred tax assets in Q2 of that year, these returns represent annual and quarterly records for the Company.

• Twelfth Consecutive Quarter of Record Earnings – The Company reported net income of $7.5 million for the three months ended December 31, 2021, a 57.1% increase over the $4.8 million reported for the three months ended December 31, 2020. The Company reported net income of $25.5 million for the twelve months ended December 31, 2021, a 37.4% increase over the $18.5 million reported for the twelve months ended December 31, 2020. Earnings per diluted share for the three months ended December 31, 2021 were $0.54, a 54.3% increase over the $0.35 reported for the three months ended December 31, 2020. Earnings per diluted share for the twelve months ended December 31, 2021 were $1.83, a 35.6% increase over the $1.35 reported for the twelve months ended December 31, 2020.

• Stable Net Interest Margin – On a linked quarterly basis, net interest margin, excluding PPP loans, increased 5 basis points from 3.19% for the quarter ended September 30, 2021 to 3.24% for the quarter ended December 31, 2021. The increase was due to a decrease in the average cost of interest-bearing deposits, as well as higher non-recurring fee income earned during the fourth quarter as a result of elevated payoff activity. Excluding the effect of this elevated payoff activity, net interest margin, excluding PPP loans, would have been 3.20%, or a 1 basis point increase from that reported for the quarter ended September 30, 2021.

• Increased Operating Leverage – Revenues, defined as the sum of net interest income and noninterest income, were $17.5 million or 8.6% greater in the fourth quarter of 2021 as compared to $16.1 million for the fourth quarter of 2020. This $1.4 million increase more than offset the increase in noninterest expense for the fourth quarter of 2021 of $239 thousand or 3.2% to $7.7 million, when compared to the $7.4 million for the fourth quarter of 2020. This continued improvement in operating leverage enabled the efficiency ratio to decrease from 46.2% for the three months ended December 31, 2020 to 43.9% for the three months ended December 31, 2021. Annualized noninterest expense to average assets declined from 1.59% for the three months ended December 31, 2020 to 1.44% for the three months ended December 31, 2021.

• Asset Quality Remains Pristine – For the ninth consecutive quarter, the Company had no non-performing loans, no loans 30 days or more past due, and no other real estate owned assets at December 31, 2021. During the twelve months ended December 31, 2021, the Company reported net charge-offs totaling $90 thousand compared to $43 thousand of net recoveries for the same period in 2020. Troubled debt restructurings were $549 thousand at December 31, 2021, a decrease of $55 thousand, from $604 thousand at December 31, 2020. The Company had no COVID-19 modifications as of December 31, 2021. The Company believes its allowance for loan losses is appropriate for the inherent risks and uncertainties associated with the portfolio.

Chris Bergstrom, President and Chief Executive Officer, commented, “John Marshall Bancorp, Inc. delivered its best earnings year ever in 2021. We produced record core returns by growing loans and deposits, staying vigilant on credit quality, increasing our non-interest income and exercising discipline with regard to overhead. We increased our momentum throughout 2021. The fourth quarter represented the best quarter of loan growth, ex-PPP, in the Company’s history and resulted in record core quarterly returns. We are well-positioned for 2022 with a strong capital position, excellent asset quality and a liquid balance sheet with ample capacity to convert cash and investments into loans.”

Balance Sheet Review

Assets
Total assets were $2.15 billion at December 31, 2021, $2.10 billion at September 30, 2021 and $1.89 billion at December 31, 2020. Asset growth from December 31, 2020 to December 31, 2021 was $263.8 million or 14.0%. During the fourth quarter of 2021, assets increased $53.8 million or 10.2% annualized.

Loans
Excluding PPP loans, gross loans net of unearned income increased $150.7 million or 10.4% from December 31, 2020 to December 31, 2021. Excluding PPP loans, gross loans net of unearned income increased $70.1 million, 18.2% annualized, during the three months ended December 31, 2021.

Gross loans net of unearned income were $1.67 billion at December 31, 2021, $1.60 billion at September 30, 2021 and $1.56 billion at December 31, 2020. Gross loans net of unearned income increased $103.9 million or 6.7% from December 31, 2020 to December 31, 2021. Gross loans net of unearned income grew $64.1 million or 15.9% annualized, during the three months ended December 31, 2021.

Investment Securities
The Company’s portfolio of investments in fixed income securities was $344.8 million at December 31, 2021, $342.1 million at September 30, 2021 and $151.9 million at December 31, 2020. Bond growth from December 31, 2020 to December 31, 2021 was $192.9 million or 127.0%. The increase in fixed income securities was funded primarily by PPP loan payoffs and deposit growth.

Interest-Bearing Deposits in Banks
Interest-bearing deposits in banks were $102.9 million at December 31, 2021, $110.5 million at September 30, 2021 and $130.2 million at December 31, 2020. The Company expects to continue to redeploy these funds in higher yielding assets as opportunities and liquidity management allow.

Deposits
Total deposits were $1.88 billion at December 31, 2021, $1.84 billion at September 30, 2021 and $1.64 billion at December 31, 2020. Deposit growth from December 31, 2020 to December 31, 2021 was $241.4 million or 14.7%. Deposits grew $44.0 million or 9.5% annualized during the three months ended December 31, 2021.

Non-interest bearing demand deposits were $488.8 million at December 31, 2021, $463.9 million at September 30, 2021 and $362.6 million at December 31, 2020. Non-interest bearing demand deposit growth from December 31, 2020 to December 31, 2021 was $126.3 million or 34.8%. During the three months ended December 31, 2021, non-interest bearing deposits grew $25.0 million or 21.4% annualized. Non-interest bearing demand deposits represented 26.0% of total deposits at December 31, 2021 and 22.1% of total deposits at December 31, 2020.

Core customer funding, which includes non-interest bearing demand deposits, NOW accounts, money market accounts, savings accounts, certificates of deposit, and IntraFi® certificates of deposit, was $1.64 billion at December 31, 2021, $1.59 billion at September 30, 2021 and $1.40 billion at December 31, 2020. Core customer funding sources increased by $235.9 million or 16.8% from December 31, 2020 to December 31, 2021. Non-maturing deposits were 65.0% of total deposits as of December 31, 2021, 64.7% as of September 30, 2021 and 60.3% as of December 31, 2020.

Core certificates of deposits, which includes certificates of deposit and IntraFi® certificates of deposit, were $414.6 million at December 31, 2021, $404.1 at September 30, 2021 and $414.1 million at December 31, 2020. Core certificates of deposits increased $466 thousand or 0.1% from December 31, 2020 to December 31, 2021.

Wholesale Funding Sources
Wholesale funding, consisting of QwickRate® and brokered deposits, fed funds purchased and Federal Home Loan Bank of Atlanta (“FHLB”) advances, grew $1.6 million or 0.6% from $259.3 million at December 31, 2020 to $260.9 million at December 31, 2021. Management continues to selectively utilize wholesale funding in order to realize lower funding costs and achieve certain asset/liability management objectives.

FHLB advances were $18.0 million at both December 31, 2021 and September 30, 2021 and $22.0 million at December 31, 2020. FHLB advances decreased $4.0 million or 18.2% from December 31, 2020 to December 31, 2021. Management continues to retire FHLB advances as they mature to increase contingent funding sources. As of December 31, 2021, the Bank had approximately $316 million remaining in secured borrowing capacity with the FHLB, an increase of $52 million over the $264 million of FHLB secured borrowing capacity as of December 31, 2020.

Subordinated Debt
The Company had subordinated notes with a balance of $24.7 million at December 31, 2021, September 30, 2021 and December 31, 2020. The notes are callable, in whole or part, at the Company’s option commencing July 2022.

Shareholders’ Equity and Capital Levels
Total shareholders’ equity was $208.5 million at December 31, 2021, $202.2 million at September 30, 2021 and $186.1 million at December 31, 2020. Year-over-year shareholders’ equity increased by $22.4 million or 12.0%. Accumulated other comprehensive income declined from $3.8 million at December 31, 2020 to a loss of $0.4 million at December 31, 2021. This change was primarily due to an increase in market yields on the Company’s available-for-sale bond portfolio, as bond prices and yields vary inversely.

Total common shares outstanding increased from 13,606,558, including 74,000 shares relating to unvested stock awards, at December 31, 2020, to 13,745,598, including 75,826 shares relating to unvested stock awards, at December 31, 2021. The year-over-year increase in shares outstanding was the result of exercises of share options and additional grants of unvested stock awards.

The Bank’s capital ratios remain well above regulatory thresholds for well-capitalized banks. As of December 31, 2021, the Bank’s total risk-based capital ratio was 15.3%, compared to 14.6% at December 31, 2020.

Asset Quality

As of December 31, 2021, for the ninth consecutive quarter, the Company had no non-accrual loans, no loans 30 days or more past due and no other real estate owned assets.

Troubled debt restructurings were $549 thousand at December 31, 2021, a decrease of $55 thousand, from $604 thousand at December 31, 2020. All troubled debt restructurings were performing in accordance with their modified terms as of December 31, 2021 and December 31, 2020.

The Company did not have any loans with COVID-19 loan modifications as of December 31, 2021.

Income Statement Review

Net Interest Income
Net interest income was $17.0 million for the three months ended December 31, 2021, an increase of $1.3 million or 8.0% from $15.7 million for the three months ended December 31, 2020. The net interest margin was 3.22% for the three months ended December 31, 2021 as compared to 3.43% for the three months ended December 31, 2020.

Average loans net of unearned income increased $87.9 million or 5.7% compared to the three months ended December 31, 2020, with a 39 basis point decline in yield. Average securities increased $209.1 million or 142.4% compared to the three months ended December 31, 2020, with a 65 basis point decline in yield. Average interest-bearing deposits in other banks decreased $30.4 million or 22.5% compared to the three months ended December 31, 2020, with a 5 basis point increase in yield. The average yield on interest-earning assets decreased 52 basis points from 4.07% for the three months ended December 31, 2020 to 3.55% for the three months ended December 31, 2021, primarily due to the decline in rates in 2021 coupled with a change in asset and funding composition.

The average cost of interest-bearing liabilities declined 44 basis points or 47.6% from 0.92% for the three months ended December 31, 2020 to 0.48% for the three months ended December 31, 2021. The average cost of interest-bearing deposits decreased 44 basis points when comparing the quarter ended December 31, 2020 to the quarter ended December 31, 2021. The average cost of other borrowed funds decreased 13 basis points when comparing the quarter ended December 31, 2020 to the quarter ended December 31, 2021. The declines in funding costs were also primarily due to the decline in rates in 2021 and the repricing of existing certificates of deposit.

Net interest margin, excluding PPP loans, was 3.24% for the three months ended December 31, 2021 and 3.34% for the same period in 2020. The yield on interest-earning assets would have been 3.58% and the yield on loans would have been 4.30% for the three months ended December 31, 2021, if PPP loans were excluded.

Net interest income was $65.9 million for the twelve months ended December 31, 2021, an increase of $9.1 million or 16.0% from $56.8 million for the twelve months ended December 31, 2020. The net interest margin was 3.27% for the twelve months ended December 31, 2021 as compared to 3.32% for the twelve months ended December 31, 2020.

Average loans net of unearned income increased $134.1 million or 9.2% compared to the twelve months ended December 31, 2020, with a 35 basis point decline in yield. Average securities increased $140.7 million or 101.0% compared to the twelve months ended December 31, 2020, with a 77 basis point decline in yield. Average interest-bearing deposits in other banks increased $26.7 million or 24.6% compared to the twelve months ended December 31, 2020, with a 24 basis point decline in yield. The average yield on interest-earning assets decreased 55 basis points from 4.23% for the twelve months ended December 31, 2020 to 3.68% for the twelve months ended December 31, 2021, primarily due to the decline in rates in 2021.

The average cost of interest-bearing liabilities declined 71 basis points or 54.4% from 1.30% for the twelve months ended December 31, 2020 to 0.59% for the twelve months ended December 31, 2021. The average cost of interest-bearing deposits decreased 71 basis points when comparing the twelve months ended December 31, 2020 to same period in 2021. The average cost of other borrowed funds decreased 52 basis points when comparing the twelve months ended December 31, 2020 to the same period in 2021. The declines in funding costs were also primarily due to the decline in rates in 2021 and the repricing of existing certificates of deposit.

Net interest margin, excluding PPP loans, was 3.25% for the twelve months ended December 31, 2021 compared to 3.33% for the twelve months ended December 31, 2020. The yield on interest-earning assets would have been 3.68% and the yield on loans would have been 4.38% for the twelve months ended December 31, 2021, if PPP loans were excluded.

Provision for Loan Losses
The Company recorded a $325 thousand provision for loan losses for the three months ended December 31, 2021, compared to $2.6 million for the same period in 2020. There were no charge-offs during the fourth quarter of 2021 or 2020.

The Company had a $3.1 million provision for loan losses for the twelve months ended December 31, 2021, compared to $6.2 million for the same period in 2020. The Company had $90 thousand in charge-offs during the twelve months ended 2021 and $43 thousand in net loan recoveries during the twelve months ended 2020.

The allowance for loan losses as a percentage of total loans increased from 1.09% at December 31, 2020 to 1.20% at December 31, 2021. The allowance for loan losses increased $3.0 million or 17.7% from December 31, 2020 to December 31, 2021. The allowance for loan losses as a percentage of total loans (excluding PPP loans) increased from 1.17% at December 31, 2020 to 1.26% at December 31, 2021. The Company does not have a reserve on PPP loan balances, as they are 100% guaranteed by the U.S. Small Business Administration.

The Company continues to monitor and evaluate additional information as it becomes available concerning COVID-19 and a number of economic performance metrics, including those related to the overall economy as well as specific industry sectors. The Company believes the allowance for loan losses was adequate to absorb probable losses inherent in the loan portfolio as of December 31, 2021. The continued evolution of COVID-19 and the intensity of its socioeconomic effects, which are inherently uncertain, may positively or negatively impact the level of the allowance and provision in future periods.

Noninterest Income
The Company’s recurring sources of noninterest income consist primarily of bank owned life insurance income, service charges on deposit accounts and insurance commissions. Generally speaking, loan fees are included in interest income on the loan portfolio and not reported as noninterest income.

For the three months ended December 31, 2021, the Company reported total noninterest income of $513 thousand compared to $374 thousand for the same period in 2020 resulting in a 37.2% increase.

For the twelve months ended December 31, 2021, the Company reported total noninterest income of $1.72 million compared to $1.61 million for the twelve months ended December 31, 2020 resulting in a 6.6% increase. Excluding the $10 thousand and $309 thousand gains on securities recorded in 2021 and 2020, respectively, noninterest income increased 31.1% year-over-year.

For both the three and twelve months ended December 31, 2021, the increase in noninterest income was primarily due to an increase in insurance commissions as a result of higher production and related incentives and increases in service charges on deposits primarily associated with account analysis and ATM fees. These increases were partially offset by a decrease in bank owned life insurance income.

Noninterest Expense
For the three months ended December 31, 2021, noninterest expense increased 3.2% to $7.7 million relative to the same period in 2020. Salaries and employee benefits expense was $4.8 million during the three months ended December 31, 2021, up $229 thousand or 5.0% when compared to $4.5 million during the three months ended December 31, 2020. Occupancy expense decreased 2.8% or $14 thousand and furniture and equipment expense decreased 1.6% or $6 thousand when comparing the three months ended December 31, 2021 to the same period in 2020. Other operating expense increased by 1.5% or $30 thousand when comparing the three months ended December 31, 2021 to the same period in 2020.

For the twelve months ended December 31, 2021, noninterest expense increased 10.6% to $32.3 million relative to the same period in 2020. For the twelve months ended December 31, 2021, salaries and employee benefits expense increased 12.4% or $2.2 million compared to the twelve months ended December 31, 2020. Occupancy expense increased 1.8% or $35 thousand and furniture and equipment expense decreased 11.7% or $190 thousand when comparing the twelve months ended December 31, 2021 to the same period in 2020. Other operating expense increased by 13.6% or $1.0 million, during the twelve months ended December 31, 2021, compared to the same period in 2020.

For both the three and twelve months ended December 31, 2021, the increase in salaries and employee benefits was primarily related to merit based compensation adjustments and incentive compensation tied to performance. Incentive compensation expense can fluctuate from quarter to quarter, based upon the Company’s financial performance and conditions measured against, among other evaluation criteria, our strategic plan and budget.

The decrease in furniture and equipment expense for the twelve months ended December 31, 2021 when compared to the same period in 2020 was primarily due to the lower equipment maintenance expense and renegotiation of certain equipment contracts.

The increase in other operating expense for the twelve months ended December 31, 2021 when compared to the same period in 2020 was primarily due to increases in legal expenses (including contemplated registration of the Company’s shares with the Securities and Exchange Commission), consulting expenses, marketing expenses, state bank franchise taxes, and expense associated with higher Federal Deposit Insurance Corporation deposit insurance that correlates directly to the Bank’s increase of insured deposit balances.

For the three months ended December 31, 2021, annualized noninterest expense to average assets was 1.44% compared to 1.59% for the three months ended December 31, 2020. For the twelve months ended December 31, 2021, annualized noninterest expense to average assets was 1.58% compared to 1.67% for the twelve months ended December 31, 2020. The Company believes its ratio of noninterest expense to average assets compares favorably to peers.

About John Marshall Bancorp, Inc.

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. John Marshall Bank (“JMB” or the “Bank”) is a $2.15 billion bank headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. with one loan production office in Arlington, Virginia. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington D.C. Metro area. JMB offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated Relationship Managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including Charter and Private Schools, Government Contractors, Health Services, Nonprofits and Associations, Professional Services, Property Management Companies, and Title Companies. Learn more at www.johnmarshallbank.com.

In addition to historical information, this press release contains 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 COVID-19), 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						At or For the Twelve Months Ended
	December 31,						December 31,
	2021			2020			2021			2020
Selected Balance Sheet Data
Cash and cash equivalents	$	105,799		$	138,457		$	105,799		$	138,457
Total investment securities		351,629			158,543			351,629			158,543
Loans, net of unearned income		1,666,469			1,562,524			1,666,469			1,562,524
Allowance for loan losses		20,032			17,017			20,032			17,017
Total assets		2,149,309			1,885,496			2,149,309			1,885,496
Non-interest bearing demand deposits		488,838			362,582			488,838			362,582
Interest bearing deposits		1,392,715			1,277,538			1,392,715			1,277,538
Total deposits		1,881,553			1,640,120			1,881,553			1,640,120
Shareholders' equity		208,470			186,081			208,470			186,081
Summary Results of Operations
Interest income	$	18,703		$	18,666		$	74,119		$	72,446
Interest expense		1,734			2,947			8,211			15,607
Net interest income		16,969			15,719			65,908			56,839
Provision for loan losses		325			2,575			3,105			6,217
Net interest income after provision for loan losses		16,644			13,144			62,803			50,622
Noninterest income		513			374			1,719			1,613
Noninterest expense		7,679			7,440			32,262			29,163
Income before income taxes		9,478			6,078			32,260			23,072
Net income		7,547			4,804			25,461			18,526
Per Share Data and Shares Outstanding
Earnings per share - basic	$	0.55		$	0.35		$	1.87		$	1.37
Earnings per share - diluted	$	0.54		$	0.35		$	1.83		$	1.35
Tangible book value per share	$	15.17		$	13.68		$	15.17		$	13.68
Weighted average common shares (basic)		13,581,586			13,528,409			13,614,760			13,460,940
Weighted average common shares (diluted)		13,879,595			13,707,301			13,914,724			13,658,618
Common shares outstanding at end of period		13,745,598			13,606,558			13,745,598			13,606,558
Performance Ratios
Return on average assets (annualized)		1.41%			1.03%			1.25%			1.06%
Return on average equity (annualized)		14.52%			10.34%			12.90%			10.49%
Net interest margin		3.22%			3.43%			3.27%			3.32%
Noninterest income as a percentage of average assets (annualized)		0.10%			0.08%			0.08%			0.09%
Noninterest expense to average assets (annualized)		1.44%			1.59%			1.58%			1.67%
Efficiency ratio		43.9%			46.2%			47.7%			49.9%
Asset Quality
Non-performing assets to total assets		0.00%			0.00%			0.00%			0.00%
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 (1)		1.20%			1.09%			1.20%			1.09%
Net charge-offs (recoveries) to average loans (annualized)		0.00%			0.00%			0.01%			0.00%
Loans 30-89 days past due and accruing interest	$	- -		$	- -		$	- -		$	- -
Non-accrual loans	$	- -		$	- -		$	- -		$	- -
Other real estate owned	$	- -		$	- -		$	- -		$	- -
Non-performing assets (2)	$	- -		$	- -		$	- -		$	- -
Troubled debt restructurings (total)	$	549		$	604		$	549		$	604
Performing in accordance with modified terms	$	549		$	604		$	549		$	604
Not performing in accordance with modified terms	$	- -		$	- -		$	- -		$	- -
Capital Ratios
Tangible equity / tangible assets		9.7%			9.9%			9.7%			9.9%
Total risk-based capital ratio		15.3%			14.6%			15.3%			14.6%
Tier 1 risk-based capital ratio		14.0%			13.5%			14.0%			13.5%
Leverage ratio		11.0%			11.0%			11.0%			11.0%
Common equity tier 1 ratio		14.0%			13.5%			14.0%			13.5%
Other Information
Number of full time equivalent employees		138			136			138			136
# Full service branch offices		8			8			8			8
# Loan production or limited service branch offices		1			1			1			1

(1) The allowance for loan losses to total loans, excluding PPP loans of $69.6 million, was 1.26% at December 31 2021. The allowance for loan losses to total loans, excluding PPP loans of $114.4 million, was 1.17% at December 31, 2020. PPP loans received no allocations in the allowance estimate due to the underlying guarantees.

(2) Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest, and other real estate owned. 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
		December 31,				September 30,				December 31,				Last Three		Year Over
		2021				2021				2020				Months		Year
Assets		(Unaudited)				(Unaudited)				(Unaudited)
Cash and due from banks		$	2,920			$	10,624			$	8,228			-72.5%		-64.5%
Interest-bearing deposits in banks			102,879				110,450				130,229			-6.9%		-21.0%
Securities available-for-sale, at fair value			239,300				238,628				151,900			0.3%		57.5%
Securities held-to-maturity, fair value of $103,258 at 12/31/2021			105,509				103,486				- -			2.0%		N/M
Restricted securities, at cost			4,951				4,948				5,676			0.1%		-12.8%
Equity securities, at fair value			1,869				1,680				967			11.3%		93.3%
Loans, net of unearned income			1,666,469				1,602,377				1,562,524			4.0%		6.7%
Allowance for loan losses			(20,032	)			(19,706	)			(17,017	)		1.7%		17.7%
Net loans			1,646,437				1,582,671				1,545,507			4.0%		6.5%
Bank premises and equipment, net			1,620				1,754				2,422			-7.6%		-33.1%
Accrued interest receivable			4,943				4,661				5,308			6.1%		-6.9%
Bank owned life insurance			20,998				20,896				20,587			0.5%		2.0%
Right of use assets			4,913				5,261				5,944			-6.6%		-17.3%
Other assets			12,970				10,445				8,728			24.2%		48.6%
Total assets		$	2,149,309			$	2,095,504			$	1,885,496			2.6%		14.0%
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing demand deposits		$	488,838			$	463,868			$	362,582			5.4%		34.8%
Interest bearing demand deposits			633,901				630,912				563,956			0.5%		12.4%
Savings deposits			101,376				94,840				62,138			6.9%		63.1%
Time deposits			657,438				647,928				651,444			1.5%		0.9%
Total deposits			1,881,553				1,837,548				1,640,120			2.4%		14.7%
Federal Home Loan Bank advances			18,000				18,000				22,000			0.0%		-18.2%
Subordinated debt			24,728				24,716				24,679			0.0%		0.2%
Accrued interest payable			843				611				877			38.0%		-3.9%
Lease liabilities			5,182				5,534				6,208			-6.4%		-16.5%
Other liabilities			10,533				6,873				5,531			53.3%		90.4%
Total liabilities			1,940,839				1,893,282				1,699,415			2.5%		14.2%
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
30,000,000 shares; issued and outstanding, 13,745,598
at 12/31/2021 including 75,826 unvested shares, 13,644,985
shares at 9/30/2021 including 60,575 unvested shares
and 13,606,558 at 12/31/2020, including 74,000 unvested shares			137				136				135			0.7%		1.5%
Additional paid-in capital			91,107				90,607				89,995			0.6%		1.2%
Retained earnings			117,626				110,079				92,165			6.9%		27.6%
Accumulated other comprehensive income (loss)			(400	)			1,400				3,786			-128.6%		-110.6%
Total shareholders' equity			208,470				202,222				186,081			3.1%		12.0%
Total liabilities and shareholders' equity		$	2,149,309			$	2,095,504			$	1,885,496			2.6%		14.0%

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,
		2021			2020			% Change		2021			2020			% Change
		(Unaudited)			(Unaudited)					(Unaudited)			(Unaudited)
Interest and Dividend Income
Interest and fees on loans		$	17,340		$	17,845		-2.8%		$	69,415		$	68,714		1.0%
Interest on investment securities, taxable			1,225			683		79.4%			4,146			2,896		43.2%
Interest on investment securities, tax-exempt			30			33		-9.1%			120			117		2.6%
Dividends			67			68		-1.5%			263			315		-16.5%
Interest on deposits in banks			41			37		10.8%			175			404		-56.7%
Total interest and dividend income			18,703			18,666		0.2%			74,119			72,446		2.3%
Interest Expense
Deposits			1,331			2,533		-47.5%			6,599			13,742		-52.0%
Federal Home Loan Bank advances			31			42		-26.2%			125			377		-66.8%
Subordinated debt			372			372		0.0%			1,487			1,487		0.0%
Other short-term borrowings			- -			- -		N/M			- -			1		-100.0%
Total interest expense			1,734			2,947		-41.2%			8,211			15,607		-47.4%
Net interest income			16,969			15,719		8.0%			65,908			56,839		16.0%
Provision for loan losses			325			2,575		-87.4%			3,105			6,217		-50.1%
Net interest income after provision for loan losses			16,644			13,144		26.6%			62,803			50,622		24.1%
Noninterest Income
Service charges on deposit accounts			152			122		24.6%			544			465		17.0%
Bank owned life insurance			102			117		-12.8%			411			469		-12.4%
Other service charges and fees			60			52		15.4%			195			172		13.4%
Gain on sale of securities			- -			- -		N/M			10			309		-96.8%
Insurance commissions			79			9		777.8%			284			55		416.4%
Other operating income			120			74		62.2%			275			143		92.3%
Total noninterest income			513			374		37.2%			1,719			1,613		6.6%
Noninterest Expenses
Salaries and employee benefits			4,765			4,536		5.0%			20,411			18,167		12.4%
Occupancy expense of premises			480			494		-2.8%			1,985			1,950		1.8%
Furniture and equipment expenses			363			369		-1.6%			1,436			1,626		-11.7%
Other operating expenses			2,071			2,041		1.5%			8,430			7,420		13.6%
Total noninterest expenses			7,679			7,440		3.2%			32,262			29,163		10.6%
Income before income taxes			9,478			6,078		55.9%			32,260			23,072		39.8%
Income tax expense			1,931			1,274		51.6%			6,799			4,546		49.6%
Net income		$	7,547		$	4,804		57.1%		$	25,461		$	18,526		37.4%
Earnings Per Share
Basic		$	0.55		$	0.35		57.1%		$	1.87		$	1.37		36.5%
Diluted		$	0.54		$	0.35		54.3%		$	1.83		$	1.35		35.6%

John Marshall Bancorp, Inc.
Loan, Deposit and Borrowing Detail (Unaudited)
(Dollar amounts in thousands)
		2021																								2020
Loans		December 31						September 30						June 30						March 31						December 31						September 30						June 30						March 31
		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total
Commercial business loans		$	53,378			3.2%		$	53,166			3.3%		$	55,375			3.5%		$	60,637			3.8%		$	67,549			4.4%		$	77,709			5.1%		$	77,987			5.1%		$	81,553			6.1%
Commercial PPP loans			69,567			4.2%			75,496			4.7%			82,190			5.2%			117,796			7.3%			114,411			7.3%			148,156			9.6%			148,156			9.7%			- -			0.0%
Commercial owner-occupied real estate loans			345,272			20.7%			326,585			20.4%			320,519			20.4%			307,918			19.2%			290,802			18.6%			260,575			17.0%			267,032			17.6%			255,010			19.1%
Total business loans			468,217			28.1%			455,247			28.4%			458,084			29.2%			486,351			30.3%			472,762			30.3%			486,440			31.7%			493,175			32.4%			336,563			25.2%
Investor real estate loans			523,038			31.4%			519,384			32.4%			505,605			32.3%			502,940			31.3%			497,087			31.8%			498,352			32.5%			480,220			31.6%			470,163			35.2%
Construction & development loans			231,090			13.9%			228,993			14.3%			219,175			14.0%			250,208			15.6%			243,741			15.6%			237,195			15.4%			236,927			15.6%			243,023			18.2%
Multi-family loans			100,132			6.0%			81,226			5.1%			92,203			5.9%			84,689			5.3%			69,367			4.4%			49,277			3.2%			55,797			3.7%			58,362			4.3%
Total commercial real estate loans			854,260			51.3%			829,603			51.8%			816,983			52.1%			837,837			52.2%			810,195			51.8%			784,824			51.1%			772,944			50.9%			771,548			57.7%
Residential mortgage loans			342,491			20.6%			316,549			19.8%			291,615			18.6%			281,964			17.5%			278,763			17.8%			262,049			17.1%			252,494			16.6%			227,172			17.0%
Consumer loans			586			0.0%			631			0.0%			916			0.1%			793			0.0%			1,000			0.1%			1,208			0.1%			1,448			0.1%			1,099			0.1%
Total loans		$	1,665,554			100.0%		$	1,602,030			100.0%		$	1,567,598			100.0%		$	1,606,945			100.0%		$	1,562,720			100.0%		$	1,534,521			100.0%		$	1,520,061			100.0%		$	1,336,382			100.0%
Less: Allowance for loan losses			(20,032	)					(19,706	)					(19,381	)					(19,381	)					(17,017	)					(14,441	)					(12,725	)					(11,176	)
Net deferred loan costs (fees)			915						347						(486	)					(1,162	)					(196	)					(1,808	)					(2,430	)					439
Net loans		$	1,646,437					$	1,582,671					$	1,547,731					$	1,586,402					$	1,545,507					$	1,518,272					$	1,504,906					$	1,325,645
		2021																								2020
		December 31						September 30						June 30						March 31						December 31						September 30						June 30						March 31
Deposits		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total		$ Amount				% of Total
Noninterest-bearing demand deposits		$	488,838			26.0%		$	463,868			25.2%		$	478,705			26.4%		$	419,796			23.8%		$	362,582			22.1%		$	385,885			23.8%		$	398,670			25.5%		$	274,878			19.9%
Interest-bearing demand deposits:
NOW accounts(1)			267,594			14.2%			294,261			16.0%			254,060			14.0%			245,274			13.9%			233,993			14.3%			227,816			14.1%			207,558			13.3%			179,197			13.0%
Money market accounts(1)			366,306			19.4%			336,651			18.3%			333,818			18.4%			344,807			19.6%			329,960			20.1%			321,760			19.8%			303,378			19.4%			289,131			21.0%
Savings accounts			101,376			5.4%			94,840			5.2%			79,119			4.4%			72,102			4.1%			62,138			3.8%			60,418			3.7%			49,896			3.2%			32,745			2.4%
Certificates of deposit
$250,000 or more			250,204			13.3%			232,722			12.7%			243,662			13.4%			265,772			15.1%			258,744			15.8%			281,302			17.4%			250,779			16.1%			249,802			18.1%
Less than $250,000			103,084			5.5%			104,463			5.7%			112,991			6.2%			119,828			6.8%			115,634			7.0%			117,171			7.2%			121,600			7.8%			128,176			9.3%
QwickRate® certificates of deposit			25,122			1.3%			28,998			1.6%			31,481			1.7%			38,565			2.2%			29,765			1.8%			29,781			1.8%			31,764			2.0%			20,011			1.4%
IntraFi® certificates of deposit			61,281			3.3%			66,926			3.6%			60,761			3.3%			38,284			2.2%			39,725			2.4%			36,909			2.3%			37,320			2.4%			57,398			4.2%
Brokered deposits			217,748			11.6%			214,819			11.7%			220,435			12.1%			216,962			12.3%			207,579			12.7%			161,104			9.9%			160,626			10.3%			148,104			10.7%
Total deposits		$	1,881,553			100.0%		$	1,837,548			100.0%		$	1,815,032			100.0%		$	1,761,390			100.0%		$	1,640,120			100.0%		$	1,622,146			100.0%		$	1,561,591			100.0%		$	1,379,442			100.0%
Borrowings
Federal Home Loan Bank advances			18,000			42.1%			18,000			42.1%		$	18,000			42.2%		$	22,000			47.1%		$	22,000			47.1%		$	22,000			47.1%		$	26,000			51.3%		$	37,000			60.0%
Subordinated debt			24,728			57.9%			24,716			57.9%			24,704			57.8%			24,692			52.9%			24,679			52.9%			24,667			52.9%			24,655			48.7%			24,642			40.0%
Total borrowings		$	42,728			100.0%		$	42,716			100.0%		$	42,704			100.0%		$	46,692			100.0%		$	46,679			100.0%		$	46,667			100.0%		$	50,655			100.0%		$	61,642			100.0%
Total deposits and borrowings		$	1,924,281					$	1,880,264					$	1,857,736					$	1,808,082					$	1,686,799					$	1,668,813					$	1,612,246					$	1,441,084
Core customer funding sources (2)		$	1,638,683			86.3%		$	1,593,731			85.9%		$	1,563,116			85.3%		$	1,505,863			84.4%		$	1,402,776			84.4%		$	1,431,261			87.1%		$	1,369,201			86.2%		$	1,211,327			85.5%
Wholesale funding sources (3)			260,870			13.7%			261,817			14.1%			269,916			14.7%			277,527			15.6%			259,344			15.6%			212,885			12.9%			218,390			13.8%			205,115			14.5%
Total funding sources		$	1,899,553			100.0%		$	1,855,548			100.0%		$	1,833,032			100.0%		$	1,783,390			100.0%		$	1,662,120			100.0%		$	1,644,146			100.0%		$	1,587,591			100.0%		$	1,416,442			100.0%

(1) Includes IntraFi® accounts.

(2) Includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits, which are maintained by customers.

(3) Consists of QwickRate® certificates of deposit, brokered deposits, federal funds purchased and Federal Home Loan Bank advances.

John Marshall Bancorp, Inc.
Average Balance Sheets, Interest and Rates (unaudited)
(Dollar amounts in thousands)
	Three Months Ended December 31, 2021								Three Months Ended December 31, 2020
				Interest			Average					Interest			Average
	Average			Income-			Yields		Average			Income-			Yields
	Balance			Expense			/Rates		Balance			Expense			/Rates
Assets
Securities	$	356,007		$	1,322		1.47%		$	146,863		$	784		2.12%
Loans, net of unearned income		1,629,124			17,340		4.22%			1,541,184			17,845		4.61%
Interest-bearing deposits in other banks		104,921			41		0.16%			135,300			37		0.11%
Total interest-earning assets	$	2,090,052		$	18,703		3.55%		$	1,823,347		$	18,666		4.07%
Other assets		31,928								34,785
Total assets	$	2,121,980							$	1,858,132
Liabilities & Shareholders' equity
Interest-bearing deposits
NOW accounts	$	281,690		$	204		0.29%		$	231,479		$	219		0.38%
Money market accounts		351,723			329		0.37%			336,131			359		0.42%
Savings accounts		101,199			89		0.35%			62,488			65		0.41%
Time deposits		642,346			709		0.44%			593,010			1,890		1.27%
Total interest-bearing deposits	$	1,376,958		$	1,331		0.38%		$	1,223,108		$	2,533		0.82%
Federal funds purchased	$	- -		$	- -		0.00%		$	- -		$	- -		N/M
Subordinated debt		24,720			372		5.97%			24,671			372		6.00%
Other borrowed funds		18,001			31		0.68%			20,533			42		0.81%
Total interest-bearing liabilities	$	1,419,679		$	1,734		0.48%		$	1,268,312		$	2,947		0.92%
Demand deposits		480,824								392,436
Other liabilities		15,240								12,528
Total liabilities	$	1,915,743							$	1,673,276
Shareholders' equity		206,237								184,856
Total liabilities and shareholders' equity	$	2,121,980							$	1,858,132
Interest rate spread							3.07%								3.15%
Net interest income and margin				$	16,969		3.22%					$	15,719		3.43%
	Twelve Months Ended December 31, 2021								Twelve Months Ended December 31, 2020
				Interest			Average					Interest			Average
	Average			Income-			Yields		Average			Income-			Yields
	Balance			Expense			/Rates		Balance			Expense			/Rates
Assets
Securities	$	280,078		$	4,529		1.62%		$	139,352		$	3,328		2.39%
Loans, net of unearned income		1,597,049			69,415		4.35%			1,462,963			68,714		4.70%
Interest-bearing deposits in other banks		135,360			175		0.13%			108,654			404		0.37%
Total interest-earning assets	$	2,012,487		$	74,119		3.68%		$	1,710,969		$	72,446		4.23%
Other assets		31,132								36,878
Total assets	$	2,043,619							$	1,747,847
Liabilities & Shareholders' equity
Interest-bearing deposits
NOW accounts	$	262,319		$	798		0.30%		$	196,776		$	1,086		0.55%
Money market accounts		337,993			1,256		0.37%			310,789			2,202		0.71%
Savings accounts		83,032			300		0.36%			47,263			330		0.70%
Time deposits		657,986			4,245		0.65%			588,239			10,124		1.72%
Total interest-bearing deposits	$	1,341,330		$	6,599		0.49%		$	1,143,068		$	13,742		1.20%
Federal funds purchased	$	- -		$	- -		0.00%		$	184		$	1		0.54%
Subordinated debt		24,702			1,487		6.02%			24,653			1,487		6.03%
Other borrowed funds		18,375			125		0.68%			31,481			377		1.20%
Total interest-bearing liabilities	$	1,384,407		$	8,211		0.59%		$	1,199,386		$	15,607		1.30%
Demand deposits		448,723								359,598
Other liabilities		13,146								12,323
Total liabilities	$	1,846,276							$	1,571,307
Shareholders' equity		197,343								176,540
Total liabilities and shareholders' equity	$	2,043,619							$	1,747,847
Interest rate spread							3.09%								2.93%
Net interest income and margin				$	65,908		3.27%					$	56,839		3.32%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220119005305/en/

Christopher W. Bergstrom, President & CEO of John Marshall Bancorp, Inc.

(703) 584-0840

Source: John Marshall Bancorp, Inc.

FAQ

What were the financial results for John Marshall Bancorp (JMSB) for 2021?

John Marshall Bancorp reported a net income of $25.5 million for 2021, a 37.4% increase from 2020.

How much did total assets increase for JMSB in 2021?

Total assets increased by 14.0% to $2.15 billion for the year ended December 31, 2021.

What is the growth percentage of gross loans for JMSB for 2021?

Gross loans grew by 10.4% from December 31, 2020 to December 31, 2021.

What was the return on average assets for JMSB in 2021?

The return on average assets (ROAA) was 1.25% for the twelve months ended December 31, 2021.

What notable achievement did JMSB reach regarding earnings?

JMSB reported its twelfth consecutive quarter of record earnings as of December 31, 2021.