JMSB Reports Record ROAA of 1.30% and ROAE of 13.35% for 3Q2021; Linked Quarter Loan Growth (excluding PPP) of 11.2% Annualized

 

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 nine months ended September 30, 2021.

Selected Highlights

• Strong Growth – Year-over-year total assets increased 12.5% or $233.6 million to $2.10 billion at September 30, 2021. Gross loans net of unearned income and Paycheck Protection Program (“PPP”) loans grew $142.3 million or 10.3% from September 30, 2020 to September 30, 2021. Total deposits grew $215.4 million or 13.3% from September 30, 2020 to September 30, 2021. Non-interest bearing demand deposits grew 20.2% or $78.0 million from September 30, 2020 to September 30, 2021.

• Record Quarterly Returns – Annualized Return on Average Assets (ROAA) was 1.30% and Return on Average Equity (ROAE) was 13.35% for the three months ended September 30, 2021. Excluding the second quarter of 2010, when the Company realized a significant, non-recurring income tax benefit from the removal of the valuation allowance on its deferred tax assets, these returns represent quarterly records for the Company.

• Eleventh Consecutive Quarter of Record Earnings – The Company reported net income of $6.8 million for the three months ended September 30, 2021, a 45.0% increase over the $4.7 million reported for the three months ended September 30, 2020. The Company reported net income of $17.9 million for the nine months ended September 30, 2021, a 30.5% increase over the $13.7 million reported for the nine months ended September 30, 2020. Earnings per diluted share for the three months ended September 30, 2021 were $0.48, a 41.2% increase over the $0.34 reported for the three months ended September 30, 2020. Earnings per diluted share for the nine months ended September 30, 2021 were $1.29, a 29.0% increase over the $1.00 reported for the nine months ended September 30, 2020.

• Consistent Interest Rate Spread – Excluding the impact of PPP loans, the Company’s interest rate spread, defined as yield on earning assets less the cost of funds, has been consistent. Excluding PPP loans, the interest rate spread for the three months ended September 30, 2021 was 3.91% versus 3.99% for the three months ended June 30, 2021, 3.90% for the three months ended December 31, 2020 and 3.90% for the three months ended September 30, 2020. The interest rate spread for the three months ended June 30, 2021 was inflated by extraordinary payoff volume.

• Increased Operating Leverage – Revenues, defined as the sum of net interest income and noninterest income, were $16.5 million or 11.6% greater in the third quarter of 2021 as compared to $14.8 million for the third quarter of 2020. This $1.7 million increase more than offset the increase in noninterest expense for the third quarter of 2021 of $406 thousand or 5.6% to $7.6 million, when compared to the $7.2 million for the third quarter of 2020. This continued improvement in operating leverage enabled the efficiency ratio to decrease from 48.8% for the three months ended September 30, 2020 to 46.2% for the three months ended September 30, 2021. Noninterest expense to average assets declined from 1.60% for the three months ended September 30, 2020 to 1.46% for the three months ended September 30, 2021.

• Asset Quality Remains Pristine – For the eighth 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 quarter-end September 30, 2021. During the first nine months of 2021, the Company reported charge-offs totaling $90 thousand. There were no charge-offs during the same period in 2020. Troubled debt restructurings were $554 thousand at September 30, 2021, a decrease of $65 thousand, from $619 thousand at September 30, 2020. The Company had no COVID-19 modifications as of September 30, 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, “Despite the economic strains caused by the Delta variant, John Marshall continued to grow high-quality loans and core deposits to produce record earnings and returns during the 3^rd quarter. We have leveraged our investments in technology to become more efficient, and are evaluating additional such investments to further accelerate our growth. The Company continues to have a strong capital position, excellent asset quality and a liquid balance sheet. As the number of COVID-19 cases declines, we are seeing increased lending opportunities and believe that we are well-positioned for future growth.”

Balance Sheet Review

Assets

Total assets were $2.10 billion at September 30, 2021, $1.89 billion at December 31, 2020 and $1.86 billion at September 30, 2020. Year-over-year asset growth from September 30, 2020 to September 30, 2021 was $233.6 million or 12.5%. Year-to-date asset growth from December 31, 2020 to September 30, 2021 was $210.1 million or 14.9% annualized. During the third quarter of 2021, assets increased $29.6 million or 5.7% annualized.

Loans

Gross loans were $1.60 billion at September 30, 2021, $1.56 billion at December 31, 2020 and $1.53 billion at September 30, 2020. Gross loans net of unearned income increased $69.7 million or 4.5% from September 30, 2020 to September 30, 2021. Excluding PPP loans, gross loans net of unearned income increased $142.3 million or 10.3% from September 30, 2020 to September 30, 2021. Gross loans net of unearned income grew $39.9 million or 3.4% annualized, during the nine months ended September 30, 2021 and increased $35.3 million or 8.9% annualized during the three months ended September 30, 2021.

Excluding the impact of PPP loans, gross loans net of unearned income grew $78.8 million, 7.3% annualized, during the nine months ended September 30, 2021 and increased $42.0 million or 11.2% annualized during the three months ended September 30, 2021.

Investment Securities

The Company’s portfolio of investments in fixed income securities was $342.1 million at September 30, 2021, $151.9 million at December 31, 2020 and $131.2 million at September 30, 2020. During the quarter ended September 30, 2021, the Company transferred $99.0 million in debt securities from available-for-sale to held-to-maturity and began classifying certain newly purchased debt securities as held-to-maturity, as it has the intent and ability to hold these securities to maturity. Year-over-year bond growth from September 30, 2020 to September 30, 2021 was $210.9 million or 160.7%. The year-over-year and year-to-date increase in fixed income securities was funded by primarily PPP loan payoffs and deposit growth.

Interest-Bearing Deposits in Banks

Interest-bearing deposits in banks were $110.5 million at September 30, 2021, $130.2 million at December 31, 2020 and $154.6 million at September 30, 2020. The Company expects to continue to reinvest these funds in higher yielding assets as opportunities and liquidity management allow.

Deposits

Total deposits were $1.84 billion at September 30, 2021, $1.64 billion at December 31, 2020 and $1.62 billion at September 30, 2020. Year-over-year deposit growth from September 30, 2020 to September 30, 2021 was $215.4 million or 13.3%. Deposits grew $197.4 million or 16.1% annualized during the nine months ended September 30, 2021 and $22.5 million or 4.9% annualized during the three months ended September 30, 2021. The slower third quarter annualized deposit growth resulted from a reduction in retail and wholesale time deposits, as discussed further below.

Non-interest bearing demand deposits were $463.9 million at September 30, 2021, $362.6 million at December 31, 2020 and $385.9 million at September 30, 2020. Year-over-year non-interest bearing demand deposit growth from September 30, 2020 to September 30, 2021 was $78.0 million or 20.2%. During the nine months ended September 30, 2021, non-interest bearing deposits grew $101.3 million or 37.4% annualized, and decreased $14.8 million or -12.3% annualized during the three months ended September 30, 2021. The decrease in non-interest bearing deposits during the three months ended September 30, 2021 was primarily the result of the distribution of proceeds from the sale of a customer’s business. Non-interest bearing demand deposits represented 25.2% of total deposits at September 30, 2021, 22.1% of total deposits at December 31, 2020 and 23.8% at September 30, 2020.

Core customer funding (which includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits maintained by customers) was $1.59 billion at September 30, 2021, $1.40 billion at December 31, 2020 and $1.43 billion at September 30, 2020. Year-over-year core customer funding sources increased by $162.5 million or 11.4% from September 30, 2020 to September 30, 2021. Non-maturing deposits were 64.7% of total deposits as of September 30, 2021, 60.3% as of December 31, 2020 and 61.4% as of September 30, 2020.

IntraFi CD® certificates of deposits (formerly known as Certificate of Deposit Account Registry Service [CDARS]) were $66.9 million at September 30, 2021, $39.7 million at December 31, 2020 and $36.9 million at September 30, 2020. Year-over-year, IntraFi® certificates of deposits increased $30.0 million from September 30, 2020 to September 30, 2021.

In total, time deposits, which includes retail customer, QwickRate, IntraFi and brokered certificates of deposit accounts, decreased $21.4 million or -12.7% annualized from June 30, 2021 to September 30, 2021 and decreased $3.5 million or -0.7% annualized from December 31, 2020 to September 30, 2021. Certificates of deposit with retail customers were $337.2 million at September 30, 2021, $374.4 million at December 31, 2020 and $398.5 million at September 30, 2020. Year-over-year certificates of deposit with retail customers decreased $61.3 million from September 30, 2020 to September 30, 2021. QwickRate® certificates of deposit were $29.0 million at September 30, 2021 and $29.8 million at both December 31, 2020 and September 30, 2020. Year-over-year QwickRate® certificates of deposit decreased $783 thousand from September 30, 2020 to September 30, 2021. Brokered deposits were $214.8 million at September 30, 2021, $207.6 million at December 31, 2020 and $161.1 million at September 30, 2020. Brokered deposits decreased $5.6 million from June 30, 2021 to September 30, 2021. Management continues to selectively utilize wholesale funding in order to realize lower funding costs and achieve certain asset/liability management objectives.

Borrowings

Borrowings, consisting of Federal Home Loan Bank of Atlanta (“FHLB”) advances were $18.0 million at September 30, 2021 and $22.0 million at both December 31, 2020 and September 30, 2020. FHLB advances decreased $4.0 million or 18.2% from September 30, 2020 to September 30, 2021 and from December 31, 2020 to September 30, 2021. Management continues to retire FHLB advances as they mature to increase contingent funding sources. As of September 30, 2021, the Bank had approximately $289 million remaining in secured borrowing capacity with the FHLB, an increase of $34 million over the $255 million of FHLB secured borrowing capacity as of September 30, 2020.

The Company had subordinated notes with a balance of $24.7 million at September 30, 2021, December 31, 2020 and September 30, 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 $202.2 million at September 30, 2021, $186.1 million at December 31, 2020 and $181.4 million at September 30, 2020. Year-over-year shareholders’ equity increased by $20.8 million or 11.5%. Accumulated other comprehensive income declined from $4.1 million at September 30, 2020 to $1.4 million at September 30, 2021. An increase in market yields for investments has reduced the Company’s unrealized gains in its bond portfolio, as bond prices and yields vary inversely.

Total common shares outstanding increased from 13,573,601, including 46,483 shares relating to unvested stock awards, at September 30, 2020, to 13,644,985, including 60,575 shares relating to unvested stock awards, at September 30, 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 minimums for well-capitalized banks. As of September 30, 2021, the Bank’s total risk-based capital ratio was 15.2%, compared to 14.6% at September 30, 2020.

Asset Quality

As of September 30, 2021, for the eighth 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 $554 thousand at September 30, 2021, a decrease of $65 thousand, from $619 thousand at September 30, 2020. All troubled debt restructurings were performing in accordance with their modified terms as of September 30, 2021 and September 30, 2020.

The Company did not have any loans with COVID-19 loan modifications as of September 30, 2021.

Income Statement Review

Net Interest Income

Net interest income was $16.2 million for the three months ended September 30, 2021, an increase of $1.7 million or 12.1% from $14.4 million for the three months ended September 30, 2020. The net interest margin was 3.15% for the three months ended September 30, 2021 as compared to 3.26% for the three months ended September 30, 2020.

Average loans net of unearned income increased $59.6 million or 3.9% compared to the three months ended September 30, 2020, with a 27 basis point decline in yield. Average securities increased $189.8 million or 140.3% compared to the three months ended September 30, 2020, with an 81 basis point decline in yield. Average interest-bearing deposits in other banks increased $29.7 million or 28.8% compared to the three months ended September 30, 2020, with a 2 basis point increase in yield. The average yield on interest-earning assets decreased 54 basis points from 4.05% for the three months ended September 30, 2020 to 3.51% for the three months ended September 30, 2021, primarily due to the decline in rates since the end of the first quarter of 2020.

The average cost of interest-bearing liabilities declined 60 basis points or 52.9% from 1.14% for the three months ended September 30, 2020 to 0.54% for the three months ended September 30, 2021. The average cost of interest-bearing deposits decreased 60 basis points when comparing the quarter ended September 30, 2020 to the quarter ended September 30, 2021. The average cost of other borrowed funds decreased 31 basis points when comparing the quarter ended September 30, 2020 to the quarter ended September 30, 2021. The declines in funding costs were also primarily due to the decline in rates since the end of the first quarter of 2020.

Net interest margin, excluding PPP loans, was 3.19% for the three months ended September 30, 2021 and 3.32% for the same period in 2020. The yield on interest-earning assets would have been 3.57% and the yield on loans would have been 4.31% for the three months ended September 30, 2021, if PPP loans were excluded.

Net interest income was $48.9 million for the nine months ended September 30, 2021, an increase of $7.8 million or 19.0% from $41.1 million for the nine months ended September 30, 2020. The net interest margin was 3.29% for the nine months ended September 30, 2021 as compared to 3.28% for the nine months ended September 30, 2020.

Average loans net of unearned income increased $149.5 million or 10.4% compared to the nine months ended September 30, 2020, with a 34 basis point decline in yield. Average securities increased $117.7 million or 86% compared to the nine months ended September 30, 2020, with an 80 basis point decline in yield. Average interest-bearing deposits in other banks increased $45.9 million or 46.0% compared to the nine months ended September 30, 2020, with a 37 basis point decline in yield. The average yield on interest-earning assets decreased 56 basis points from 4.29% for the nine months ended September 30, 2020 to 3.73% for the nine months ended September 30, 2021, primarily due to the decline in rates since the end of the first quarter of 2020.

The average cost of interest-bearing liabilities declined 81 basis points or 56.2% from 1.44% for the nine months ended September 30, 2020 to 0.63% for the nine months ended September 30, 2021. The average cost of interest-bearing deposits decreased 81 basis points when comparing the nine months ended September 30, 2020 to same period in 2021. The average cost of other borrowed funds decreased 59 basis points when comparing the nine months ended September 30, 2020 to the same period in 2021. The declines in funding costs were also primarily due to the decline in rates since the end of the first quarter of 2020.

Net interest margin, excluding PPP loans, was 3.25% for the nine months ended September 30, 2021 compared to 3.28% for the nine months ended September 30, 2020. The yield on interest-earning assets would have been 3.71% and the yield on loans would have been 4.41% for the nine months ended September 30, 2021, if PPP loans were excluded.

On a linked quarterly basis, net interest margin, excluding PPP loans, decreased 13 basis points from 3.32% for the quarter ended June 30, 2021 to 3.19% for the quarter ended September 30, 2021. The decrease was due to higher fee income reported during the second quarter as a result of the elevated payoff activity within the commercial and construction and development loan portfolios that did not occur at the same volume this quarter. For the three months ended September 30, 2021, the average yield on interest-earning assets, excluding PPP loans, was 3.57% and average yield on loans, excluding PPP loans, was 4.31%, a decrease of 21 and 16 basis points, respectively, when compared to the three months ended June 30, 2021. The average cost of interest-bearing deposits decreased 8 basis points from 0.52% for the three months ended June 30, 2021 to 0.44% for the three months ended September 30, 2021. The average cost of other borrowed funds increased 1 basis point from 0.67% for the three months ended June 30, 2021 to 0.68% for the three months ended September 30, 2021.

Provision for Loan Losses

The Company had a $325 thousand provision for loan losses for the three months ended September 30, 2021, compared to $1.7 million for the same period in 2020. There were no charge-offs during the third quarter of 2021 or 2020.

The Company had a $2.8 million provision for loan losses for the nine months ended September 30, 2021, compared to $3.6 million for the same period in 2020. The Company had $90 thousand in charge-offs during the nine months ended 2021 and $43 thousand in net loan recoveries during the first nine months of 2020.

The allowance for loan losses as a percentage of total loans increased from 0.94% at September 30, 2020 to 1.23% at September 30, 2021. The allowance for loan losses increased $5.3 million or 36.5% from September 30, 2020 to September 30, 2021. The allowance for loan losses as a percentage of total loans (excluding PPP loans) increased from 1.04% at September 30, 2020 to 1.29% at September 30, 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 September 30, 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 September 30, 2021, the Company reported total noninterest income of $325 thousand compared to $357 thousand for the same period in 2020. The decrease in noninterest income was primarily due to a market adjustments on the Company’s equity securities and bank owned life insurance income.

For the nine months ended September 30, 2021, the Company reported total noninterest income of $1.21 million compared to $1.24 million for the nine months ended September 30, 2020. The decrease in noninterest income was primarily due to a decrease in gains on sales of securities. Excluding gains from the sale of securities, the Company experienced an increase of $266 thousand during the nine months ended September 30, 2021 when compared to the same period in 2020. These increases were primarily attributable to increases in insurance commissions as a result of higher production and related incentives, an increase in other income as a result of a loan commitment fee received for a loan that did not close, and increases due to service charges on deposits.

Noninterest Expense

For the three months ended September 30, 2021, noninterest expense increased 5.6% to $7.6 million relative to the same period in 2020. Salaries and employee benefits expense was $5.0 million during the three months ended September 30, 2021, up $274 thousand or 5.8% when compared to $4.7 million during the three months ended September 30, 2020. Other operating expense increased by 5.0% or $86 thousand when comparing the three months ended September 30, 2021 to the same period in 2020.

For the nine months ended September 30, 2021, noninterest expense increased 13.2% to $24.6 million relative to the same period in 2020. For the nine months ended September 30, 2021, salaries and employee benefits expense increased 14.8% or $2.0 million compared to the nine months ended September 30, 2020. Other operating expense increased by 18.2% or $980 thousand, during the nine months ended September 30, 2021, compared to the same period in 2020.

For both the three and nine months ended September 30, 2021, the increase in salaries and employee benefits was primarily related to increases in headcount within the Bank and incentive compensation tied to performance. The headcount increases are investments in the Bank’s future growth. As in the past, management expects these staffing additions will lead to subsequent increases in revenues. Incentive compensation expense accruals can fluctuate significantly from quarter to quarter, based upon the Company’s financial performance and condition measured against, among other evaluation criteria, our strategic plan and budget. The increase in other operating expense for the three and nine months ended September 30, 2021 when compared to the same periods 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 September 30, 2021, annualized noninterest expense to average assets was 1.46% compared to 1.60% for the three months ended September 30, 2020. For the nine months ended September 30, 2021, annualized noninterest expense to average assets was 1.63% compared to 1.70% for the nine months ended September 30, 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) is one of the largest community banks 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 DC 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 Nine Months Ended
	September 30,						September 30,
		2021			2020			2021			2020
Selected Balance Sheet Data
Cash and cash equivalents	$	121,074		$	162,499		$	121,074		$	162,499
Total investment securities		348,742			137,715			348,742			137,715
Loans, net of unearned income		1,602,377			1,532,713			1,602,377			1,532,713
Allowance for loan losses		19,706			14,441			19,706			14,441
Total assets		2,095,504			1,861,904			2,095,504			1,861,904
Non-interest bearing demand deposits		463,868			385,885			463,868			385,885
Interest bearing deposits		1,373,680			1,236,261			1,373,680			1,236,261
Total deposits		1,837,548			1,622,146			1,837,548			1,622,146
Shareholders' equity		202,222			181,427			202,222			181,427
Summary Results of Operations
Interest income	$	18,042		$	17,907		$	55,416		$	53,780
Interest expense		1,876			3,487			6,477			12,660
Net interest income		16,166			14,420			48,939			41,120
Provision for loan losses		325			1,716			2,780			3,642
Net interest income after provision for loan losses		15,841			12,704			46,159			37,478
Noninterest income		325			357			1,206			1,239
Noninterest expense		7,623			7,217			24,583			21,723
Income before income taxes		8,543			5,844			22,782			16,994
Net income		6,761			4,662			17,914			13,722
Per Share Data and Shares Outstanding
Earnings per share - basic	$	0.50		$	0.34		$	1.31		$	1.02
Earnings per share - diluted	$	0.48		$	0.34		$	1.29		$	1.00
Tangible book value per share	$	14.82		$	13.37		$	14.82		$	13.37
Weighted average common shares (basic)		13,580,538			13,526,792			13,570,449			13,438,286
Weighted average common shares (diluted)		13,883,104			13,638,644			13,865,226			13,642,607
Common shares outstanding at end of period		13,644,985			13,573,601			13,644,985			13,573,601
Performance Ratios
Return on average assets (annualized)		1.30%			1.03%			1.19%			1.07%
Return on average equity (annualized)		13.35%			10.30%			12.32%			10.55%
Net interest margin		3.15%			3.26%			3.29%			3.28%
Noninterest income as a percentage of average assets (annualized)		0.06%			0.08%			0.08%			0.10%
Noninterest expense to average assets (annualized)		1.46%			1.60%			1.63%			1.70%
Efficiency ratio		46.2%			48.8%			49.0%			51.3%
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)		1.23%			0.94%			1.23%			0.94%
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)	$	554		$	619		$	554		$	619
Performing in accordance with modified terms	$	554		$	619		$	554		$	619
Not performing in accordance with modified terms	$	- -		$	- -		$	- -		$	- -
Bank Capital Ratios
Tangible equity / tangible assets		10.8%			10.9%			10.8%			10.9%
Total risk-based capital ratio		15.2%			14.6%			15.2%			14.6%
Tier 1 risk-based capital ratio		14.0%			13.6%			14.0%			13.6%
Leverage ratio		10.8%			11.1%			10.8%			11.1%
Common equity tier 1 ratio		14.0%			13.6%			14.0%			13.6%
Other Information
Number of full time equivalent employees		142			134			142			134
# 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 $73.7 million, was 1.29% at September 30, 2021. The allowance for loan losses to total loans, excluding PPP loans of $148.2 million, was 1.04% at September 30, 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
	September 30,			December 31,			September 30,				Last Nine			Year Over
		2021			2020			2020			Months			Year
Assets	(Unaudited)			(Unaudited)			(Unaudited)
Cash and due from banks	$	10,624		$	8,228		$	7,918			29.1%			34.2%
Interest-bearing deposits in banks		110,450			130,229			154,581			-15.2%			-28.5%
Securities available-for-sale, at fair value		238,628			151,900			131,211			57.1%			81.9%
Securities held-to-maturity, fair value of $102,051 at 9/30/2021		103,486			- -			- -			N/M			N/M
Restricted securities, at cost		4,948			5,676			5,673			-12.8%			-12.8%
Equity securities, at fair value		1,680			967			831			73.7%			102.2%
Loans, net of unearned income		1,602,377			1,562,524			1,532,713			2.6%			4.5%
Allowance for loan losses		(19,706)			(17,017)			(14,441)			15.8%			36.5%
Net loans		1,582,671			1,545,507			1,518,272			2.4%			4.2%
Bank premises and equipment, net		1,754			2,422			2,209			-27.6%			-20.6%
Accrued interest receivable		4,661			5,308			5,708			-12.2%			-18.3%
Bank owned life insurance		20,896			20,587			20,470			1.5%			2.1%
Right of use assets		5,261			5,944			6,274			-11.5%			-16.1%
Other assets		10,445			8,728			8,757			19.7%			19.3%
Total assets	$	2,095,504		$	1,885,496		$	1,861,904			11.1%			12.5%
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing demand deposits	$	463,868		$	362,582		$	385,885			27.9%			20.2%
Interest bearing demand deposits		630,912			563,956			549,576			11.9%			14.8%
Savings deposits		94,840			62,138			60,418			52.6%			57.0%
Time deposits		647,928			651,444			626,267			-0.5%			3.5%
Total deposits		1,837,548			1,640,120			1,622,146			12.0%			13.3%
Federal Home Loan Bank advances		18,000			22,000			22,000			-18.2%			-18.2%
Subordinated debt		24,716			24,679			24,667			0.1%			0.2%
Accrued interest payable		611			877			770			-30.3%			-20.6%
Lease liabilities		5,534			6,208			6,532			-10.9%			-15.3%
Other liabilities		6,873			5,531			4,362			24.3%			57.6%
Total liabilities		1,893,282			1,699,415			1,680,477			11.4%			12.7%
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, 13,644,985
at 9/30/2021 including 60,575 unvested shares, 13,606,558
shares at 12/31/2020 including 74,000 unvested shares
and 13,573,601 at 9/30/2020, including 46,483 unvested shares		136			135			135			0.7%			0.7%
Additional paid-in capital		90,607			89,995			89,821			0.7%			0.9%
Retained earnings		110,079			92,165			87,361			19.4%			26.0%
Accumulated other comprehensive income		1,400			3,786			4,110			-63.0%			-65.9%
Total shareholders' equity		202,222			186,081			181,427			8.7%			11.5%
Total liabilities and shareholders' equity	$	2,095,504		$	1,885,496		$	1,861,904			11.1%			12.5%

John Marshall Bancorp, Inc.
Consolidated Statements of Income
(Dollar amounts in thousands, except per share data)
	Three Months Ended								Nine Months Ended
	September 30,								September 30,
		2021			2020		% Change			2021			2020			% Change
	(Unaudited)			(Unaudited)					(Unaudited)			(Unaudited)
Interest and Dividend Income
Interest and fees on loans	$	16,737		$	17,079		-2.0%		$	52,075		$	50,869			2.4%
Interest on investment securities, taxable		1,159			697		66.3%			2,921			2,213			32.0%
Interest on investment securities, tax-exempt		30			32		-6.3%			90			84			7.1%
Dividends		65			65		0.0%			196			247			-20.6%
Interest on deposits in banks		51			34		50.0%			134			367			-63.5%
Total interest and dividend income		18,042			17,907		0.8%			55,416			53,780			3.0%
Interest Expense
Deposits		1,473			3,052		-51.7%			5,268			11,209			-53.0%
Federal Home Loan Bank advances		31			63		-50.8%			94			335			-71.9%
Subordinated debt		372			372		0.0%			1,115			1,115			0.0%
Other short-term borrowings		- -			- -		N/M			- -			1			-100.0%
Total interest expense		1,876			3,487		-46.2%			6,477			12,660			-48.8%
Net interest income		16,166			14,420		12.1%			48,939			41,120			19.0%
Provision for loan losses		325			1,716		-81.1%			2,780			3,642			-23.7%
Net interest income after provision for loan losses		15,841			12,704		24.7%			46,159			37,478			23.2%
Noninterest Income
Service charges on deposit accounts		140			107		30.8%			392			343			14.3%
Bank owned life insurance		102			118		-13.6%			309			352			-12.2%
Other service charges and fees		50			38		31.6%			135			120			12.5%
Gain on sale of securities		- -			- -		N/M			10			309			-96.8%
Insurance commissions		28			12		133.3%			205			46			345.7%
Other operating income		5			82		-93.9%			155			69			124.6%
Total noninterest income		325			357		-9.0%			1,206			1,239			-2.7%
Noninterest Expenses
Salaries and employee benefits		4,977			4,703		5.8%			15,646			13,631			14.8%
Occupancy expense of premises		484			480		0.8%			1,505			1,456			3.4%
Furniture and equipment expenses		373			331		12.7%			1,073			1,257			-14.6%
Other operating expenses		1,789			1,703		5.0%			6,359			5,379			18.2%
Total noninterest expenses		7,623			7,217		5.6%			24,583			21,723			13.2%
Income before income taxes		8,543			5,844		46.2%			22,782			16,994			34.1%
Income tax expense		1,782			1,182		50.8%			4,868			3,272			48.8%
Net income	$	6,761		$	4,662		45.0%		$	17,914		$	13,722			30.5%
Earnings Per Share
Basic	$	0.50		$	0.34		47.1%		$	1.31		$	1.02			28.4%
Diluted	$	0.48		$	0.34		41.2%		$	1.29		$	1.00			29.0%

John Marshall Bancorp, Inc.
Loan, Deposit and Borrowing Detail (Unaudited)
(Dollar amounts in thousands)
	2021												2020
Loans	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
Commercial business loans	$	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		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		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		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		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		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		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		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		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		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	$	1,602,030	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		(19,706)				(19,381)				(19,381)				(17,017)				(14,441)				(12,725)				(11,176)
Net deferred loan costs (fees)		347				(486)				(1,162)				(196)				(1,808)				(2,430)				439
Net loans	$	1,582,671			$	1,547,731			$	1,586,402			$	1,545,507			$	1,518,272			$	1,504,906			$	1,325,645
	2021												2020
	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
Noninterest-bearing demand deposits	$	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)		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)		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		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		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		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		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		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		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	$	1,837,548	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	42.2%		$	22,000	47.1%		$	22,000	47.1%		$	22,000	47.1%		$	26,000	51.3%		$	37,000	60.0%
Subordinated debt		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	$	42,716	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	$	1,880,264			$	1,857,736			$	1,808,082			$	1,686,799			$	1,668,813			$	1,612,246			$	1,441,084
Core customer funding sources (2)	$	1,593,731	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)		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	$	1,855,548	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 September 30, 2021								Three Months Ended September 30, 2020
				Interest			Average					Interest			Average
	Average			Income-			Yields		Average			Income-			Yields
	Balance			Expense			/Rates		Balance			Expense			/Rates
Assets
Securities	$	325,027		$	1,254		1.53%		$	135,242		$	794		2.34%
Loans, net of unearned income		1,580,695			16,737		4.20%			1,521,091			17,079		4.47%
Interest-bearing deposits in other banks		132,662			51		0.15%			102,984			34		0.13%
Total interest-earning assets	$	2,038,384		$	18,042		3.51%		$	1,759,317		$	17,907		4.05%
Other assets		30,759								37,594
Total assets	$	2,069,143							$	1,796,911
Liabilities & Shareholders' equity
Interest-bearing deposits
NOW accounts	$	277,117		$	203		0.29%		$	213,608		$	240		0.45%
Money market accounts		327,144			296		0.36%			313,281			387		0.49%
Savings accounts		87,935			75		0.34%			56,379			74		0.52%
Time deposits		649,963			899		0.55%			584,229			2,351		1.60%
Total interest-bearing deposits	$	1,342,159		$	1,473		0.44%		$	1,167,497		$	3,052		1.04%
Federal funds purchased	$	- -		$	- -		0.00%		$	1		$	- -		0.00%
Subordinated debt		24,708			372		5.97%			24,659			372		6.00%
Other borrowed funds		18,000			31		0.68%			25,337			63		0.99%
Total interest-bearing liabilities	$	1,384,867		$	1,876		0.54%		$	1,217,494		$	3,487		1.14%
Demand deposits		470,476								386,509
Other liabilities		12,810								12,827
Total liabilities	$	1,868,153							$	1,616,830
Shareholders' equity		200,990								180,081
Total liabilities and shareholders' equity	$	2,069,143							$	1,796,911
Interest rate spread							2.97%								2.91%
Net interest income and margin				$	16,166		3.15%					$	14,420		3.26%
	Nine Months Ended September 30, 2021								Nine Months Ended September 30, 2020
				Interest			Average					Interest			Average
	Average			Income-			Yields		Average			Income-			Yields
	Balance			Expense			/Rates		Balance			Expense			/Rates
Assets
Securities	$	254,490		$	3,207		1.68%		$	136,831		$	2,544		2.48%
Loans, net of unearned income		1,586,240			52,075		4.39%			1,436,699			50,869		4.73%
Interest-bearing deposits in other banks		145,618			134		0.12%			99,706			367		0.49%
Total interest-earning assets	$	1,986,348		$	55,416		3.73%		$	1,673,236		$	53,780		4.29%
Other assets		30,863								37,581
Total assets	$	2,017,211							$	1,710,817
Liabilities & Shareholders' equity
Interest-bearing deposits
NOW accounts	$	255,791		$	594		0.31%		$	185,124		$	867		0.63%
Money market accounts		333,366			927		0.37%			302,281			1,843		0.81%
Savings accounts		76,910			210		0.37%			42,151			265		0.84%
Time deposits		663,257			3,537		0.71%			586,637			8,234		1.87%
Total interest-bearing deposits	$	1,329,324		$	5,268		0.53%		$	1,116,193		$	11,209		1.34%
Federal funds purchased	$	- -		$	- -		0.00%		$	245		$	1		0.55%
Subordinated debt		24,696			1,115		6.04%			24,647			1,115		6.04%
Other borrowed funds		18,502			94		0.68%			35,157			335		1.27%
Total interest-bearing liabilities	$	1,372,522		$	6,477		0.63%		$	1,176,242		$	12,660		1.44%
Demand deposits		437,905								348,572
Other liabilities		12,439								12,256
Total liabilities	$	1,822,866							$	1,537,070
Shareholders' equity		194,345								173,747
Total liabilities and shareholders' equity	$	2,017,211							$	1,710,817
Interest rate spread							3.10%								2.85%
Net interest income and margin				$	48,939		3.29%					$	41,120		3.28%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211020005348/en/

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

(703) 584-0840

Source: John Marshall Bancorp, Inc.