John Marshall Bancorp, Inc. Reports Annualized Net Interest Income Increases 27.5%, Balance Sheet Well-Positioned for 2025 Growth

John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported net income of $4.8 million ($0.33 per diluted common share) for the quarter ended December 31, 2024, compared to net income of $4.2 million ($0.30 per diluted common share) for the quarter ended September 30, 2024 and net income of $4.5 million ($0.32 per diluted common share) for the quarter ended December 31, 2023.

Selected Highlights

Significant Increase in Net Interest Income and Margin – For the three months ended December 31, 2024, the Company reported net interest income of $14.1 million, a $912 thousand or 27.5% annualized increase over the $13.2 million reported for the three months ended September 30, 2024. Net interest margin for the three months ended December 31, 2024 was 2.52%, a 22 basis points improvement when compared to the 2.30% net interest margin for the three months ended September 30, 2024 and a 40 basis points improvement when compared to the 2.12% net interest margin for the three months ended December 31, 2023. Net income increased 12.8% or 50.8% annualized when compared to the three months ended September 30, 2024.

Earnings Accelerating – Pre-tax pre-provision earnings (Non-GAAP) for the three months ended December 31, 2024 was $6.4 million, representing an increase of $1.3 million or 25.6% when compared to the three months ended December 31, 2023. The Federal Reserve initiated a series of fed funds rate reductions commencing mid-September 2024. Reported net income was $4.8 million for the three months ended December 31, 2024 compared to $4.2 million for the three months ended September 30, 2024 and $4.5 million for the three months ended December 31, 2023. Refer to “Explanation of Non-GAAP Measures” and the “Reconciliation of Certain Non-GAAP Financial Measures” table for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP.

Loan Growth – The Company’s loan portfolio grew $29.6 million or 6.4% annualized during the fourth quarter 2024. The strength in the Company’s loan pipeline continued during the fourth quarter with $118.6 million in new loan commitments, which represented a $52.5 million or 79.4% increase compared to the same period in 2023. New loan commitments represent loans closed, but not necessarily fully funded.

Excellent Asset Quality – As of December 31, 2024, the Company had no non-accrual loans and no other real estate owned assets (“OREO”). The Company had one loan that was 90 days past due and still accruing interest as of December 31, 2024. The loan paid off, in full, on January 7, 2025. As of the date of this release, the Bank had no non-performing loans, OREO or loans 30 or more days past due. Based upon our loan trial balance as of the date of this earnings release, the Company expects that there will be no loans 30 or more days past due as of January 31, 2025.

Robust Capitalization – Each of the Bank’s regulatory capital ratios remained well in excess of the well-capitalized thresholds as of December 31, 2024.

Growing Book Value per Share – Book value per share increased from $17.07 as of September 30, 2024 to $17.28 as of December 31, 2024. For 2024, book value per share increased $1.03 or 6.3% from $16.25 as of December 31, 2023 to $17.28 as of December 31, 2024. When factoring in the $0.25 cash dividend per share paid in July 2024, the book value per share return was 7.9%.

Chris Bergstrom, President and Chief Executive Officer, commented, “In the fourth quarter, we continued to make excellent progress, increasing our net interest margin by 22 basis points. We increased loan balances $29.6 million in the fourth quarter. Our unfunded loan commitments continued to grow during the fourth quarter, and we expect these will be a significant component of our 2025 growth as the loans fund. Our capital levels are strong and well in excess of regulatory requirements for well-capitalized banks. Our balance sheet and the Company are well-positioned to pursue growth in 2025. As always, I want to thank our hardworking associates for their inspired efforts in advancing the interests of our customers and the Company.”

Balance Sheet, Liquidity and Credit Quality

Total assets were $2.23 billion at December 31, 2024, $2.27 billion at September 30, 2024, and $2.24 billion at December 31, 2023. Total assets have decreased $39.4 million or 1.7% since September 30, 2024 and decreased $7.6 million or 0.3% since December 31, 2023.

Total loans, net of unearned income, increased $12.2 million or 0.7% to $1.87 billion at December 31, 2024, compared to $1.86 billion at December 31, 2023 and increased $29.6 million during the quarter ended December 31, 2024 or 6.4% annualized from $1.84 billion at September 30, 2024. The increase in loans was primarily attributable to growth in the investor real estate loan portfolio, partially offset by a decrease in the commercial owner-occupied real estate and construction & development loan portfolios. Refer to the Loan, Deposit and Borrowing table for further information.

The carrying value of the Company’s fixed income securities portfolio was $222.3 million at December 31, 2024, $237.5 million at September 30, 2024 and $265.5 million at December 31, 2023. The decrease in carrying value of the Company’s fixed income securities portfolio since December 31, 2023 was attributable to amortization of the portfolio. As of December 31, 2024, 95.5% of our bond portfolio carried the implied guarantee of the United States government or one of its agencies. At December 31, 2024, 62% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At December 31, 2024, the fixed income portfolio had an estimated weighted average life of 4.2 years. The available-for-sale portfolio comprised approximately 61% of the fixed income securities portfolio and had a weighted average life of 3.1 years at December 31, 2024. The held-to-maturity portfolio comprised approximately 39% of the fixed income securities portfolio and had a weighted average life of 6.0 years at December 31, 2024. The Company did not purchase or sell any fixed income securities during the three and twelve month periods ended December 31, 2024.

The Company’s balance sheet remains highly liquid. The Company’s liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $727.3 million as of December 31, 2024 compared to $639.0 million as of December 31, 2023 and represented 37.5% and 28.5% of total assets, respectively. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at December 31, 2024.

Total deposits were $1.89 billion at December 31, 2024, $1.94 billion at September 30, 2024 and $1.91 billion at December 31, 2023. During the quarter, total deposits decreased $43.7 million or 2.3% when compared to September 30, 2024. Deposits decreased $14.2 million or 0.7% when compared to December 31, 2023. The Bank reduced costlier deposits (certificates of deposit, Qwickrate CDs, IntraFi CDs, and brokered CDs) by $125.5 million since December 31, 2023. As further detailed in the tables included in this release, core funding sources have increased $39.2 million and wholesale funding sources have decreased $61.3 million since December 31, 2023. As of December 31, 2024, the Company had $659.2 million of deposits that were not insured or not collateralized compared to $634.1 million at December 31, 2023.

On September 3, 2024, the Company paid off its $77.0 million Bank Term Funding Program (“BTFP”) advance and concurrently secured three Federal Home Loan Bank (“FHLB”) advances totaling $56.0 million. The FHLB advances have a weighted average fixed interest rate of 4.01% compared to 4.76% for the retired BTFP advance. Total borrowings as of December 31, 2024 consisted of subordinated debt totaling $24.8 million and the FHLB advances.

Shareholders’ equity increased $16.7 million or 7.3% to $246.6 million at December 31, 2024 compared to $229.9 million at December 31, 2023. Book value per share was $17.28 as of December 31, 2024 compared to $16.25 as of December 31, 2023, an increase of 6.3%. The year-over-year change in book value per share was primarily due to the Company’s earnings over the previous twelve months and a decrease in accumulated other comprehensive loss. This increase was partially offset by increased cash dividends paid and increased share count from shareholder option exercises and restricted share award issuances. The decrease in accumulated other comprehensive loss was attributable to decreases in unrealized losses on our available-for-sale investment portfolio due to market value increases.

The Bank’s capital ratios remained well above regulatory thresholds for well-capitalized banks. As of December 31, 2024, the Bank’s total risk-based capital ratio was 16.2%, compared to 15.7% at December 31, 2023. As outlined below, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at December 31, 2024 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized (Non-GAAP). Refer to “Explanation of Non-GAAP Measures” and the “Reconciliation of Certain Non-GAAP Financial Measures” table for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP.

Bank Regulatory Capital Ratios (As Reported)

Well-Capitalized Threshold

December 31, 2024

December 31, 2023

Total risk-based capital ratio

10.0

16.2

15.7

Tier 1 risk-based capital ratio

8.0

15.2

14.7

Common equity tier 1 ratio

6.5

15.2

14.7

Leverage ratio

5.0

12.4

11.6

Adjusted Bank Regulatory Capital Ratios (Hypothetical Scenario of Selling All Bonds at Fair Market Value - Non-GAAP)

Well-Capitalized Threshold

December 31, 2024

December 31, 2023

Adjusted total risk-based capital ratio

10.0

15.3

14.7

Adjusted tier 1 risk-based capital ratio

8.0

14.2

13.5

Adjusted common equity tier 1 ratio

6.5

14.2

13.5

Adjusted leverage ratio

5.0

11.5

10.6

As of December 31, 2024, the Company had no non-accrual loans and no OREO. The Company experienced net recoveries of $2 thousand during the twelve months ended December 31, 2024. The Company had one loan that was 90 days past due and still accruing interest as of December 31, 2024. The loan paid off, in full, on January 7, 2025. As of the date of this release, the Bank had no non-performing loans, OREO or loans 30 or more days past due. Based upon our loan trial balance as of the date of this earnings release, the Company expects that there will be no loans 30 or more days past due as of January 31, 2025.

At December 31, 2024, the allowance for loan credit losses was $18.7 million or 1.00% of outstanding loans, net of unearned income, compared to $19.5 million or 1.05% of outstanding loans, net of unearned income, at December 31, 2023. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, resulted from changes in the Company’s loss driver analysis and assumptions, changes in the composition of the loan portfolio, improved economic forecasts used in the quantitative portion of the model and considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.

At December 31, 2024, the allowance for credit losses on unfunded loan commitments was $1.1 million compared to $0.6 million at December 31, 2023. The increase in the allowance for credit losses on unfunded loan commitments was primarily the result of increases in unfunded loan commitments.

The Company did not have an allowance for credit losses on held-to-maturity securities as of December 31, 2024 or December 31, 2023. As of December 31, 2024, 93.4% of our held-to-maturity portfolio carried the implied guarantee of the United States Government or one of its agencies.

The Company’s owner occupied and non-owner occupied CRE portfolios continue to be of sound credit quality. The following table provides a detailed breakout of the two aforementioned segments as of December 31, 2024, demonstrating their strong debt-service-coverage and loan-to-value ratios.

Commercial Real Estate

Owner Occupied

Non-owner Occupied

Asset Class

Weighted Average Loan-to-Value(1)

Weighted Average Debt Service Coverage Ratio(2)

Number of Total Loans

Principal Balance(3) (Dollars in thousands)

Weighted Average Loan-to-Value(1)

Weighted Average Debt Service Coverage Ratio(2)

Number of Total Loans

Principal Balance(3) (Dollars in thousands)

Warehouse & Industrial

49.8

3.5

66,679

50.1

2.6

115,497

Office

57.6

3.7

137

83,161

47.7

2.0

111,788

Retail

57.1

3.5

69,597

64.3

1.9

146

455,534

Church

27.7

2.6

30,918

- -

Hotel/Motel

- -

59.7

1.6

52,429

Other(4)

40.5

3.6

78,666

53.2

1.9

21,925

Total

285

329,021

264

757,173

__________________________

(1)

Loan-to-value is determined at origination date and is divided by principal balance as of December 31, 2024.

(2)

The debt service coverage ratio (“DSCR”) is calculated from the primary source of repayment for the loan. Owner occupied DSCR’s are derived from cash flows from the owner occupant’s business, property and their guarantors, while non-owner occupied DSCR’s are derived from the net operating income of the property.

(3)

Principal balance excludes deferred fees or costs.

(4)

Other asset class is primarily comprised of schools, daycares and country clubs.

Income Statement Review

Quarterly Results

The Company reported net income of $4.8 million for the fourth quarter of 2024, an increase of $274 thousand or 6.1% when compared to the fourth quarter of 2023.

Net interest income for the fourth quarter of 2024 increased $2.0 million or 17.0% compared to the fourth quarter of 2023, driven primarily by the increase in yield on interest-earning assets, the increase in non-interest bearing deposit balances, and the decrease in interest-bearing deposit balances. The annualized net interest margin and tax-equivalent net interest margin (Non-GAAP) for the three months ended December 31, 2024 were both 2.52%, as compared to 2.11% and 2.12%, respectively, for the same period in the prior year. The increase in net interest margin was primarily due to the increase in yields on the Company’s interest-earning assets coupled with a decrease in cost of interest-bearing liabilities.

The yield on interest earning assets was 5.01% for the fourth quarter of 2024 compared to 4.68% for the same period in 2023. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan portfolio as a result of repricing of assets subsequent to the fourth quarter of 2023 and certain prepayment penalties. The cost of interest-bearing liabilities was 3.62% for the fourth quarter of 2024 compared to 3.64% for the same quarter in the prior year. The decrease in the cost of interest-bearing liabilities was primarily due to the decrease in the cost of interest-bearing deposits.

The Company recorded a $298 thousand provision for credit losses for the fourth quarter of 2024 compared to a release of provision for credit losses of $781 thousand for the fourth quarter of 2023. The provision for credit losses during the fourth quarter of 2024 was primarily a result of growth in the loan portfolio of $29.6 million during the quarter.

Non-interest income was $281 thousand for the fourth quarter of 2024 compared to $624 thousand for the fourth quarter of 2023. The decrease in non-interest income of $343 thousand was primarily attributable to a decrease of $267 thousand due to unfavorable mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan (“NQDC”) and a $70 thousand decrease in gains recorded on the sale of the guaranteed portion of SBA 7(a) loans due to decreased sale activity.

Non-interest expense increased $391 thousand or 5.2% during the fourth quarter of 2024 compared to the fourth quarter of 2023. The increase was primarily due to increases in salary and employee benefit expense and other expense, partially offset by lower occupancy expense. The increase was also attributable to franchise tax fees, professional fees, marketing fees and data processing expense. The increase in professional fees was due to increased contract costs and services. The increase in data processing fees was primarily due to contractual increases and volume-based activity. The decrease in occupancy expense was due to renegotiating an office lease. The Company continues to analyze cost savings opportunities on existing leases and material contracts.

For the three months ended December 31, 2024, annualized non-interest expense to average assets was 1.41% compared to 1.31% for the three months ended December 31 2023. The increase was primarily due to lower average assets when comparing the two periods.

For the three months ended December 31, 2024, the annualized efficiency ratio was 55.4% compared to 59.7% for the three months ended December 31, 2023. The decrease was primarily due to an increase in net interest income.

Year-End Results

The Company reported net income of $17.1 million for the twelve months ended December 31, 2024, an increase of $12.0 million when compared to net income of $5.2 million for the twelve months ended December 31, 2023. This increase was primarily attributable to the previously disclosed restructuring of the Company’s securities portfolio and surrender of bank owned life insurance (“BOLI”) in July 2023, which resulted in a non-recurring, after tax loss of $14.6 million (the “Restructuring”). Core net income (Non-GAAP), which excludes the impact of the Restructuring, was $19.8 million for the twelve months ended December 31, 2023.

Net interest income for the twelve months ended December 31, 2024 increased $0.6 million or 1.1% compared to the same period of 2023, driven primarily by the increase in yield of interest-bearing assets outpacing the increase in cost on interest-earning liabilities. The yield on interest earning assets was 4.92% for the twelve months ended December 31, 2024 compared to 4.41% for the same period in 2023. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loans and interest-bearing deposits in banks as a result of elevated interest rates and repricing of assets subsequent to the fourth quarter of 2023. The cost of interest-bearing liabilities was 3.78% for the twelve months ended December 31, 2024 compared to 3.08% for the twelve months ended December 31, 2023. The increase in the cost of interest-bearing liabilities was primarily due to a 71 basis points increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the fourth quarter of 2023. The annualized net interest margin and tax-equivalent net interest margin (Non-GAAP) for the twelve month ended December 31, 2024 were both 2.28%, as compared to 2.20% and 2.21%, respectively, for the same period in the prior year. The increase in net interest margin was primarily due to the increase in yields on the Company’s interest-earning assets outpacing the increase in cost of interest-bearing deposits.

The Company recorded a $0.4 million release of provision for credit losses for the twelve months ended December 31, 2024 compared to $3.3 million release of provision for credit losses for the twelve months ended December 31, 2023. The release of provision for credit losses during the twelve months ended December 31, 2024 was primarily a result of changes in the composition and volume of the loan portfolio, improved economic forecasts used in the quantitative portion of the model and considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.

Non-interest income was $2.3 million for the twelve months ended December 31, 2024 compared to a loss of $14.9 million for the twelve months ended December 31, 2023. Core non-interest income (Non-GAAP), defined as reported non-interest income excluding the impact of the Restructuring, was $2.2 million for the twelve months ended December 31, 2023.

Non-interest expense increased $994 thousand or 3.2% during the twelve months ended December 31, 2024 compared to the same period in 2023. As previously disclosed, the increase was primarily due to the non-recurring $322 thousand reversal of a litigation reserve during the third quarter of 2023 and non-recurring expenses totaling $138 thousand incurred during the first quarter of 2024. The first quarter 2024 non-recurring expenses were incurred in connection with a strategic opportunity that was explored and ultimately did not materialize. Excluding the effects of the $322 thousand reversal in 2023 and non-recurring expenses totaling $138 thousand incurred during 2024, adjusted non-interest expense increased $535 thousand or 1.6% during the twelve months ended December 31, 2024 when compared to the twelve months ended December 31, 2023. The increase was also due to increases in professional fees and data processing expense, partially offset by lower salaries and employee benefit expense. The increase in professional fees was due to increased contract costs and services. The increase in data processing fees was primarily due to contractual increases and volume based activity. The decrease in salaries and employee benefits was due to lower incentive accruals and higher direct loan origination costs when compared to the same period of the prior year, partially offset by higher deferred compensation expense as a result of mark-to-market fluctuations on the Company’s NQDC.

For the twelve months ended December 31, 2024, annualized non-interest expense to average assets was 1.41% compared to 1.33% for the twelve months ended December 31, 2023. The increase was primarily due to higher reported non-interest expense of $994 thousand and lower average assets when comparing the two periods.

For the twelve months ended December 31, 2024, the annualized efficiency ratio was 59.7% compared to 86.7% for the twelve months ended December 31, 2023. The decrease was primarily due to the previously disclosed Restructuring in July 2023. The annualized core efficiency ratio (Non-GAAP) was 59.7% for the twelve months ended December 31, 2024, compared to 58.5% for the twelve months ended December 31, 2023. The increase in core efficiency ratio was primarily due to a decrease in net interest income.

Explanation of Non-GAAP Financial Measures

This release contains financial information determined by methods other than in accordance with GAAP. Management believes that the supplemental Non-GAAP information provides a better comparison of period-to-period operating performance and the impact of non-recurring expenses and unrealized losses in the Company’s bond portfolio on the Bank’s regulatory capital ratios. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:

Tax-equivalent net interest margin reflects adjustments for differences in tax treatment of interest income sources;
Adjusted Bank regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized;
Pre-tax, pre-provision earnings excludes income tax expense and the provision for (recovery of) credit losses; and
Core non-interest income, income before taxes, income tax expense, net income, earnings per share (basic and diluted), return on average assets (annualized), return on average equity (annualized), non-interest income as a percentage of average assets (annualized) and efficiency ratio excluding the impact of losses recognized in July 2023 on the sale of available-for-sale securities and taxes paid on the early surrender of BOLI policies in the Restructuring.

These disclosures should not be viewed as a substitute for, or more important than, financial results in accordance with GAAP, nor are they necessarily comparable to Non-GAAP performance measures which may be presented by other companies. Please refer to the Reconciliation of Certain Non-GAAP Financial Measures table and Average Balance Sheets, Interest and Rates tables for the respective periods for a reconciliation of these Non-GAAP measures to the most directly comparable GAAP measure.

About John Marshall Bancorp, Inc.

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is 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. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington, D.C. Metropolitan area. The Bank 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.

Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that 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. Our 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 the Bank include, but are not limited to, the following: the concentration of our business in the Washington, D.C. metropolitan area and the effect of changes in the economic, political and environmental conditions on this market; adequacy of our allowance for loan credit losses; allowance for unfunded commitments credit losses, and allowance for credit losses associated with our held-to-maturity and available-for-sale securities portfolios; deterioration of our asset quality; future performance of our loan portfolio with respect to recently originated loans; the level of prepayments on loans and mortgage-backed securities; liquidity, interest rate and operational risks associated with our business; changes in our financial condition or results of operations that reduce capital; our ability to maintain existing deposit relationships or attract new deposit relationships; changes in consumer spending, borrowing and savings habits; inflation and changes in interest rates that may reduce our margins or reduce the fair value of financial instruments; changes in the 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; additional risks related to new lines of business, products, product enhancements or services; increased competition with other financial institutions and fintech companies; adverse changes in the securities markets; changes in the financial condition or future prospects of issuers of securities that we own; our ability to maintain an effective risk management framework; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; compliance with legislative or regulatory requirements; results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take similar actions; potential claims, damages, and fines related to litigation or government actions; the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses thereto; technological risks and developments, and cyber threats, attacks, or events; the additional requirements of being a public company; changes in accounting policies and practices; our ability to successfully capitalize on growth opportunities; our ability to retain key employees; deteriorating economic conditions, either nationally or in our market area, including higher unemployment and lower real estate values; implications of our status as a smaller reporting company and as an emerging growth company; and other factors discussed in the Company’s reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. 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,

2024

2023

2024

2023

Selected Balance Sheet Data

Cash and cash equivalents

122,469

99,005

122,469

99,005

Total investment securities

232,732

273,302

232,732

273,302

Loans, net of unearned income

1,872,173

1,859,967

1,872,173

1,859,967

Allowance for loan credit losses

18,715

19,543

18,715

19,543

Total assets

2,234,947

2,242,549

2,234,947

2,242,549

Non-interest bearing demand deposits

433,288

411,374

433,288

411,374

Interest bearing deposits

1,459,127

1,495,226

1,459,127

1,495,226

Total deposits

1,892,415

1,906,600

1,892,415

1,906,600

Federal funds purchased

- -

10,000

- -

10,000

Federal Home Loan Bank advances

56,000

- -

56,000

Federal Reserve Bank borrowings

- -

54,000

- -

54,000

Shareholders' equity

246,614

229,914

246,614

229,914

Summary Results of Operations

Interest income

27,995

26,598

110,133

100,770

Interest expense

13,929

14,571

59,086

50,286

Net interest income

14,066

12,027

51,047

50,484

Provision for (recovery of) credit losses

298

(781)

(370)

(3,252)

Net interest income after provision for (recovery of) credit losses

13,768

12,808

51,417

53,736

Non-interest income (loss)

281

624

2,271

(14,940)

Core non-interest income(1)

281

624

2,271

2,174

Non-interest expense

7,945

7,554

31,809

30,815

Income before income taxes

6,104

5,878

21,879

7,981

Core income before income taxes(1)

6,104

5,878

21,879

25,095

Net income

4,776

4,502

17,121

5,158

Core net income(1)

4,776

4,502

17,121

19,779

Per Share Data and Shares Outstanding

Earnings per share - basic

0.34

0.32

1.20

0.36

Core earnings per share - basic(1)

0.34

0.32

1.20

1.40

Earnings per share - diluted

0.33

0.32

1.20

0.36

Core earnings per share - diluted(1)

0.33

0.32

1.20

1.39

Book value per share

17.28

16.25

17.28

16.25

Weighted average common shares (basic)

14,196,309

14,082,762

14,172,166

14,115,492

Weighted average common shares (diluted)

14,224,287

14,145,607

14,206,109

14,185,760

Common shares outstanding at end of period

14,269,469

14,148,533

14,269,469

14,148,533

Performance Ratios

Return on average assets (annualized)

0.85

0.78

0.76

0.22

Core return on average assets (annualized)(1)

0.85

0.78

0.76

0.85

Return on average equity (annualized)

7.71

7.91

7.16

2.32

Core return on average equity (annualized)(1)

7.71

7.91

7.16

8.91

Net interest margin

2.52

2.12

2.28

2.20

Tax-equivalent net interest margin (Non-GAAP)

2.52

2.12

2.28

2.21

Non-interest income (loss) as a percentage of average assets (annualized)

0.05

0.11

0.10

(0.64)

Core non-interest income as a percentage of average assets (annualized)(1)

0.05

0.11

0.10

0.09

Non-interest expense to average assets (annualized)

1.41

1.31

1.41

1.33

Efficiency ratio

55.4

59.7

86.7

Core efficiency ratio(1)

55.4

59.7

58.5

Asset Quality

Non-performing assets to total assets

0.45

- -

0.45

- -

Non-performing loans to total loans

0.53

- -

0.53

- -

Allowance for loan credit losses to non-performing loans

N/M

Allowance for loan credit losses to total loans

1.00

1.05

1.00

1.05

Net charge-offs (recoveries) to average loans (annualized)

0.00

Loans 30-89 days past due and accruing interest

- -

90 days past due and still accruing interest

9,978

- -

9,978

- -

Non-accrual loans

- -

Other real estate owned

- -

Non-performing assets (2)

9,978

- -

9,978

- -

Capital Ratios (Bank Level)

Equity / assets

11.9

11.1

11.9

11.1

Total risk-based capital ratio

16.2

15.7

16.2

15.7

Tier 1 risk-based capital ratio

15.2

14.7

15.2

14.7

Common equity tier 1 ratio

15.2

14.7

15.2

14.7

Leverage ratio

12.4

11.6

12.4

11.6

Other Information

Number of full time equivalent employees

132

134

132

134

# Full service branch offices

__________________________ (1)

Non-GAAP financial measure. Refer to “Reconciliation of Certain Non-GAAP Financial Measures” for further details.

(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.

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

2024

2023

Months

Year

Assets

(Unaudited)

Cash and due from banks

5,945

8,164

7,424

(27.2

(19.9

Interest-bearing deposits in banks

116,524

169,063

91,581

(31.1

27.2

Securities available-for-sale, at fair value

130,257

144,649

169,993

(9.9

(23.4

Securities held-to-maturity at amortized cost, fair value of $76,270, $79,731, and $79,532 at 12/31/2024, 09/30/2024, and 12/31/2023, respectively.

92,009

92,863

95,505

(0.9

(3.7

Restricted securities, at cost

7,634

7,630

5,012

0.1

52.3

Equity securities, at fair value

2,832

2,698

2,792

5.0

1.4

Loans, net of unearned income

1,872,173

1,842,598

1,859,967

1.6

0.7

Allowance for loan credit losses

(18,715

)

(18,481

)

(19,543

)

1.3

(4.2

Net loans

1,853,458

1,824,117

1,840,424

1.6

0.7

Bank premises and equipment, net

1,318

1,179

1,281

11.8

2.9

Accrued interest receivable

5,996

5,657

6,110

6.0

(1.9

Right of use assets

5,013

3,824

4,176

31.1

20.0

Other assets

13,961

14,519

18,251

(3.8

(23.5

Total assets

2,234,947

2,274,363

2,242,549

(1.7

(0.3

Liabilities and Shareholders' Equity

Liabilities

Deposits:

Non-interest bearing demand deposits

433,288

472,422

411,374

(8.3

5.3

Interest-bearing demand deposits

705,097

685,385

607,971

2.9

16.0

Savings deposits

44,367

43,779

52,061

1.3

(14.8

Time deposits

709,663

734,564

835,194

(3.4

(15.0

Total deposits

1,892,415

1,936,150

1,906,600

(2.3

(0.7

Federal funds purchased

- -

10,000

N/M

(100.0

Federal Home Loan Bank advances

56,000

- -

N/M

Federal Reserve Bank borrowings

- -

54,000

N/M

(100.0

Subordinated debt, net

24,791

24,770

24,708

0.1

0.3

Accrued interest payable

2,394

2,304

4,559

3.9

(47.5

Lease liabilities

5,369

4,090

4,446

31.3

20.8

Other liabilities

7,364

7,931

8,322

(7.1

(11.5

Total liabilities

1,988,333

2,031,245

2,012,635

(2.1

(1.2

Shareholders' Equity

Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued

- -

N/M

Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued

- -

N/M

Common stock, voting, par value $0.01 per share; authorized 30,000,000 shares; issued and outstanding, 14,269,469 at 12/31/24 including 54,388 unvested shares, issued and outstanding, 14,238,677 at 9/30/2024 including 45,753 unvested shares, and issued and outstanding, 14,148,533 at 12/31/2023 including 47,318 unvested shares

142

141

- -

0.7

Additional paid-in capital

97,173

97,017

95,636

0.2

1.6

Retained earnings

159,951

155,174

146,388

3.1

9.3

Accumulated other comprehensive loss

(10,652

)

(9,215

)

(12,251

)

15.6

(13.1

Total shareholders' equity

246,614

243,118

229,914

1.4

7.3

Total liabilities and shareholders' equity

2,234,947

2,274,363

2,242,549

(1.7

(0.3

* Derived from audited consolidated financial statements.

John Marshall Bancorp, Inc.

Consolidated Statements of Income

(Dollar amounts in thousands, except per share data)

Three Months Ended

Twelve Months Ended

December 31

2024

2023

% Change

2024

2023

% Change

(Unaudited)

Interest and Dividend Income

Interest and fees on loans

25,044

23,080

8.5

96,332

86,435

11.5

Interest on investment securities, taxable

1,091

1,310

(16.7

4,692

7,206

(34.9

Interest on investment securities, tax-exempt

0.0

(32.1

Dividends

128

64.1

391

300

30.3

Interest on deposits in other banks

1,723

2,121

(18.8

8,682

6,776

28.1

Total interest and dividend income

27,995

26,598

5.3

110,133

100,770

9.3

Interest Expense

Deposits

13,008

13,577

(4.2

54,492

47,168

15.5

Federal funds purchased

- -

(100.0

(86.7

Federal Home Loan Bank advances

572

- -

N/M

745

N/M

Federal Reserve Bank borrowings

- -

640

(100.0

2,451

1,640

49.5

Subordinated debt

349

1,396

Total interest expense

13,929

14,571

(4.4

59,086

50,286

17.5

Net interest income

14,066

12,027

17.0

51,047

50,484

1.1

Provision for (recovery of) Credit Losses

298

(781

)

(138.2

(370

)

(3,252

)

(88.6

Net interest income after provision for (recovery of) credit losses

13,768

12,808

7.5

51,417

53,736

(4.3

Non-interest Income

Service charges on deposit accounts

(2.2

349

330

5.8

Bank owned life insurance

- -

224

N/M

Other service charges and fees

181

161

12.4

655

838

(21.8

Losses on sale of available-for-sale securities

- -

(17,316

)

N/M

Insurance commissions

(22.4

416

386

7.8

Gain on sale of government guaranteed loans

(86.4

520

131

N/M

Non-qualified deferred compensation plan asset gains (loss), net

(62

)

205

(130.2

236

317

(25.6

Other income

(70.0

150

(36.7

Total non-interest income (loss)

281

624

(55.0

2,271

(14,940

)

(115.2

)

Non-interest Expenses

Salaries and employee benefits

4,658

4,507

3.4

19,240

19,436

(1.0

Occupancy expense of premises

417

448

(6.9

1,760

1,811

(2.8

Furniture and equipment expenses

319

296

7.8

1,220

1,178

3.6

Other expenses

2,551

2,303

10.8

9,589

8,390

14.3

Total non-interest expenses

7,945

7,554

5.2

31,809

30,815

3.2

Income before income taxes

6,104

5,878

3.8

21,879

7,981

174.1

Income Tax Expense

1,328

1,376

(3.5

4,758

2,823

68.5

Net income

4,776

4,502

6.1

17,121

5,158

231.9

Earnings Per Share

Basic

0.34

0.32

6.3

1.20

0.36

233.3

Diluted

0.33

0.32

3.1

1.20

0.36

233.3

John Marshall Bancorp, Inc.

Historical Trends - Quarterly Financial Data (Unaudited)

(Dollar amounts in thousands, except per share data)

2024

2023

December 31

September 30

June 30

March 31

December 31

September 30

June 30

March 31

Profitability for the Quarter:

Interest income

27,995

28,428

26,791

26,919

26,598

26,263

24,455

23,453

Interest expense

13,929

15,272

14,710

15,175

14,571

14,284

12,446

8,984

Net interest income

14,066

13,156

12,081

11,744

12,027

11,979

12,009

14,469

Provision for (recovery of) credit losses

298

400

(292

)

(776

)

(781

)

(829

)

(868

)

(774

)

Non-interest income (loss)

281

617

555

818

624

(16,815

)

685

566

Non-interest expenses

7,945

8,031

7,909

7,924

7,554

7,660

7,831

7,770

Income (loss) before income taxes

6,104

5,342

5,019

5,414

5,878

(11,667

)

5,731

8,039

Income tax expense (benefit)

1,328

1,107

1,114

1,210

1,376

(1,530

)

1,241

1,735

Net income (loss)

4,776

4,235

3,905

4,204

4,502

(10,137

)

4,490

6,304

Financial Performance:

Return on average assets (annualized)

0.85

0.73

0.70

0.75

0.78

(1.73

0.77

1.10

Return on average equity (annualized)

7.71

7.00

6.68

7.23

7.91

(18.24

8.13

11.83

Net interest margin

2.52

2.30

2.19

2.10

2.11

2.07

2.09

2.56

Tax-equivalent net interest margin (Non-GAAP)

2.52

2.30

2.19

2.11

2.12

2.08

2.10

2.57

Non-interest income (loss) as a percentage of average assets (annualized)

0.05

0.11

0.10

0.15

0.11

(2.86

0.12

0.10

Non-interest expense to average assets (annualized)

1.41

1.39

1.42

1.41

1.31

1.30

1.34

1.35

Efficiency ratio

55.4

58.3

62.6

63.1

59.7

(158.4

61.7

51.7

Per Share Data:

Earnings (loss) per share - basic

0.34

0.30

0.27

0.30

0.32

(0.72

)

0.32

0.45

Earnings (loss) per share - diluted

0.33

0.30

0.27

0.30

0.32

(0.72

)

0.32

0.44

Book value per share

17.28

17.07

16.54

16.51

16.25

15.61

15.50

15.63

Dividends declared per share

- -

0.25

- -

0.22

- -

Weighted average common shares (basic)

14,196,309

14,187,691

14,173,245

14,130,986

14,082,762

14,080,026

14,077,658

14,067,047

Weighted average common shares (diluted)

14,224,287

14,214,586

14,200,171

14,181,254

14,145,607

14,080,026

14,143,253

14,156,724

Common shares outstanding at end of period

14,269,469

14,238,677

14,229,853

14,209,606

14,148,533

14,126,084

14,126,138

14,125,208

Non-interest Income:

Service charges on deposit accounts

Bank owned life insurance

- -

101

100

Other service charges and fees

181

160

165

149

161

160

314

203

Losses on sale of available-for-sale securities

- -

(17,114

)

- -

(202

)

Insurance commissions

252

206

Gain on sale of government guaranteed loans

160

216

133

- -

Non-qualified deferred compensation plan asset gains (losses), net

(62

)

139

124

205

(60

)

Other income

Total non-interest income (loss)

281

617

555

818

624

(16,815

)

685

566

Non-interest Expenses:

Salaries and employee benefits

4,658

4,897

4,875

4,810

4,507

5,052

4,965

4,912

Occupancy expense of premises

417

444

448

451

448

445

448

470

Furniture and equipment expenses

319

304

301

297

296

282

304

296

Other expenses

2,551

2,386

2,285

2,366

2,303

1,881

2,114

2,092

Total non-interest expenses

7,945

8,031

7,909

7,924

7,554

7,660

7,831

7,770

Balance Sheets at Quarter End:

Total loans, net of unearned income

1,872,173

1,842,598

1,827,187

1,825,931

1,859,967

1,820,132

1,769,801

1,771,272

Allowance for loan credit losses

(18,715

)

(18,481

)

(18,433

)

(18,671

)

(19,543

)

(20,036

)

(20,629

)

(21,619

)

Investment securities

232,732

247,840

249,582

261,341

273,302

272,881

429,954

445,785

Interest-earning assets

2,221,429

2,259,501

2,249,350

2,234,592

2,224,850

2,278,027

2,315,368

2,312,404

Total assets

2,234,947

2,274,363

2,269,757

2,251,837

2,242,549

2,298,202

2,364,250

2,351,307

Total deposits

1,892,415

1,936,150

1,912,840

1,900,990

1,906,600

1,981,623

2,046,309

2,088,642

Total interest-bearing liabilities

1,539,918

1,544,498

1,577,420

1,598,050

1,583,934

1,622,430

1,691,044

1,665,837

Total shareholders' equity

246,614

243,118

235,346

234,550

229,914

220,567

218,970

220,823

Quarterly Average Balance Sheets:

Total loans, net of unearned income

1,838,526

1,818,472

1,810,722

1,835,966

1,837,855

1,790,720

1,767,831

1,772,922

Investment securities

243,329

249,354

255,940

270,760

273,264

310,407

441,778

463,254

Interest-earning assets

2,223,725

2,277,427

2,222,658

2,247,620

2,260,356

2,301,642

2,305,050

2,295,677

Total assets

2,238,062

2,292,385

2,239,261

2,264,544

2,280,060

2,331,403

2,344,712

2,334,695

Total deposits

1,893,976

1,939,601

1,883,010

1,914,173

1,956,039

2,012,934

2,051,702

2,066,139

Total interest-bearing liabilities

1,532,452

1,573,631

1,551,953

1,600,197

1,587,179

1,660,980

1,667,597

1,621,131

Total shareholders' equity

246,525

240,609

235,136

233,952

225,718

220,473

221,608

220,282

Financial Measures:

Average equity to average assets

11.0

10.5

10.3

9.9

9.5

9.4

Investment securities to earning assets

10.5

11.0

11.1

11.7

12.3

12.0

18.6

19.3

Loans to earning assets

84.3

81.5

81.2

81.7

83.6

79.9

76.4

76.6

Loans to assets

83.8

81.0

80.5

81.1

82.9

79.2

74.9

75.3

Loans to deposits

98.9

95.2

95.5

96.1

97.6

91.9

86.5

84.8

Capital Ratios (Bank Level):

Equity / assets

11.9

11.6

11.4

11.3

11.1

10.6

10.2

10.3

Total risk-based capital ratio

16.2

16.3

16.4

16.1

15.7

16.1

Tier 1 risk-based capital ratio

15.2

15.3

15.4

15.1

14.7

14.6

15.0

14.9

Common equity tier 1 ratio

15.2

15.3

15.4

15.1

14.7

14.6

15.0

14.9

Leverage ratio

12.4

11.9

12.2

11.8

11.6

11.3

11.6

11.5

John Marshall Bancorp, Inc.

Loan, Deposit and Borrowing Detail (Unaudited)

(Dollar amounts in thousands)

2024

2023

December 31

September 30

June 30

March 31

December 31

September 30

June 30

March 31

Loans

$ 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

47,612

2.5

39,741

2.2

41,806

2.3

42,779

2.3

45,073

2.4

37,793

2.1

40,156

2.3

41,204

2.3

Commercial PPP loans

124

0.0

126

0.0

127

0.0

129

0.0

131

0.0

132

0.0

133

0.0

135

0.0

Commercial owner-occupied real estate loans

329,222

17.6

343,906

18.7

349,644

19.2

356,335

19.6

360,102

19.4

363,017

20.0

360,859

20.4

363,495

20.6

Total business loans

376,958

20.2

383,773

20.9

391,577

21.5

399,243

21.9

405,306

21.8

400,942

22.1

401,148

22.7

404,834

22.9

Investor real estate loans

757,173

40.5

726,771

39.5

722,419

39.6

692,418

38.0

689,556

37.1

683,686

37.6

654,623

37.0

660,740

37.4

Construction & development loans

164,988

8.8

161,466

8.8

138,744

7.6

151,476

8.3

180,922

9.8

179,570

9.9

179,656

10.2

179,606

10.2

Multi-family loans

94,695

5.1

91,426

5.0

91,925

5.1

94,719

5.2

96,458

5.2

86,366

4.8

86,061

4.9

88,670

5.0

Total commercial real estate loans

1,016,856

54.4

979,663

53.3

953,088

52.3

938,613

51.5

966,936

52.1

949,622

52.3

920,340

52.1

929,016

52.6

Residential mortgage loans

472,932

25.3

473,787

25.8

476,764

26.2

482,254

26.5

482,182

26.1

464,509

25.7

443,305

25.2

433,076

24.5

Consumer loans

906

0.1

877

0.0

876

0.0

772

0.0

560

0.0

467

0.0

646

0.0

324

0.0

Total loans

1,867,652

100.0

1,838,100

100.0

1,822,305

100.0

1,820,882

100.0

1,854,984

100.0

1,815,540

100.0

1,765,439

100.0

1,767,250

100.0

Less: Allowance for loan credit losses

(18,715

)

(18,481

)

(18,433

)

(18,671

)

(19,543

)

(20,036

)

(20,629

)

(21,619

)

Net deferred loan costs (fees)

4,521

4,498

4,882

5,049

4,983

4,592

4,362

4,022

Net loans

1,853,458

1,824,117

1,808,754

1,807,260

1,840,424

1,800,096

1,749,172

1,749,653

2024

2023

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

Non-interest bearing demand deposits

433,288

22.9

472,422

24.4

437,169

22.8

404,669

21.3

411,374

21.6

437,880

22.1

433,931

21.2

447,450

21.4

Interest-bearing demand deposits:

NOW accounts(1)

355,840

18.8

324,660

16.8

321,702

16.8

318,445

16.8

297,321

15.6

345,522

17.4

311,225

15.2

284,872

13.7

Money market accounts(1)

349,257

18.5

360,725

18.6

346,249

18.1

326,135

17.1

310,650

16.3

330,297

16.6

341,413

16.7

392,962

18.8

Savings accounts

44,367

2.3

43,779

2.3

45,884

2.4

50,664

2.7

52,061

2.8

57,408

3.0

68,013

3.4

81,150

3.9

Certificates of deposit

$250,000 or more

315,549

16.7

334,591

17.3

339,908

17.8

355,766

18.7

357,768

18.7

364,805

18.4

376,899

18.4

338,824

16.2

Less than $250,000

83,060

4.4

86,932

4.5

91,258

4.8

99,694

5.2

101,567

5.3

103,600

5.2

105,956

5.2

94,429

4.5

QwickRate® certificates of deposit

249

0.0

4,119

0.2

4,119

0.2

5,117

0.3

9,686

0.5

11,526

0.6

12,772

0.6

16,952

0.8

IntraFi® certificates of deposit

34,288

1.8

32,801

1.7

32,922

1.7

34,443

1.8

45,748

2.4

41,659

2.1

49,729

2.4

53,178

2.5

Brokered deposits

276,517

14.6

276,121

14.3

293,629

15.4

306,057

16.1

320,425

16.8

288,926

14.6

346,371

16.9

378,825

18.2

Total deposits

1,892,415

100.0

1,936,150

100.0

1,912,840

100.0

1,900,990

100.0

1,906,600

100.0

1,981,623

100.0

2,046,309

100.0

2,088,642

100.0

Borrowings

Federal funds purchased

- -

0.0

- -

0.0

- -

0.0

- -

0.0

10,000

11.3

- -

0.0

- -

0.0

- -

0.0

Federal Home Loan Bank advances

56,000

69.3

56,000

69.3

- -

0.0

- -

0.0

- -

0.0

- -

0.0

- -

0.0

- -

0.0

Federal Reserve Bank borrowings

- -

0.0

- -

0.0

77,000

75.7

77,000

75.7

54,000

60.9

54,000

68.6

54,000

68.6

- -

0.0

Subordinated debt, net

24,791

30.7

24,770

30.7

24,749

24.3

24,729

24.3

24,708

27.8

24,687

31.4

24,666

31.4

24,645

100.0

Total borrowings

80,791

100.0

80,770

100.0

101,749

100.0

101,729

100.0

88,708

100.0

78,687

100.0

78,666

100.0

24,645

100.0

Total deposits and borrowings

1,973,206

2,016,920

2,014,589

2,002,719

1,995,308

2,060,310

2,124,975

2,113,287

Core customer funding sources (2)

1,615,649

82.9

1,655,910

83.1

1,615,092

81.2

1,589,816

80.4

1,576,489

80.0

1,681,171

82.6

1,687,166

80.3

1,692,865

81.1

Wholesale funding sources (3)

332,766

17.1

336,240

16.9

374,748

18.8

388,174

19.6

394,111

20.0

354,452

17.4

413,143

19.7

395,777

18.9

Total funding sources

1,948,415

100.0

1,992,150

100.0

1,989,840

100.0

1,977,990

100.0

1,970,600

100.0

2,035,623

100.0

2,100,309

100.0

2,088,642

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, Federal Home Loan Bank advances and Federal Reserve Bank borrowings.

John Marshall Bancorp, Inc.

Average Balance Sheets, Interest and Rates (unaudited)

(Dollar amounts in thousands)

Twelve Months Ended December 31, 2024

Twelve Months Ended December 31, 2023

Interest Income /

Average

Interest Income /

Average

(Dollars in thousands)

Average Balance

Expense

Rate

Average Balance

Expense

Rate

Assets:

Securities:

Taxable

253,421

5,083

2.01

368,922

7,506

2.03

Tax-exempt(1)

1,379

3.26

2,351

2.89

Total securities

254,800

5,128

2.01

371,273

7,574

2.04

Loans, net of unearned income(2):

Taxable

1,807,547

95,770

5.30

1,764,315

85,515

4.85

Tax-exempt(1)

18,389

712

3.87

28,190

1,164

4.13

Total loans, net of unearned income

1,825,936

96,482

5.28

1,792,505

86,679

4.84

Interest-bearing deposits in other banks

162,165

8,682

5.35

126,623

6,776

5.35

Total interest-earning assets

2,242,901

110,292

4.92

2,290,401

101,029

4.41

Total non-interest earning assets

15,630

32,430

Total assets

2,258,531

2,322,831

Liabilities & Shareholders’ Equity:

Interest-bearing deposits

NOW accounts

322,028

8,848

2.75

299,468

6,804

2.27

Money market accounts

342,057

10,707

3.13

362,243

10,150

2.80

Savings accounts

48,466

664

1.37

69,742

831

1.19

Time deposits

757,494

34,273

4.52

842,121

29,383

3.49

Total interest-bearing deposits

1,470,045

54,492

3.71

1,573,574

47,168

3.00

Federal funds purchased

7.14

302

4.97

Subordinated debt

24,747

1,396

5.64

24,664

1,396

5.66

Federal Reserve Bank borrowings

51,314

2,451

4.78

34,176

1,640

4.80

Federal Home Loan Bank advances

18,361

745

4.06

1,487

4.51

Total interest-bearing liabilities

1,564,495

59,086

3.78

1,634,203

50,286

3.08

Demand deposits

437,694

447,804

Other liabilities

17,261

18,791

Total liabilities

2,019,450

2,100,798

Shareholders’ equity

239,081

222,033

Total liabilities and shareholders’ equity

2,258,531

2,322,831

Tax-equivalent net interest income and spread (Non-GAAP)(1)

51,206

1.14

50,743

1.33

Less: tax-equivalent adjustment

159

259

Net interest income and spread (GAAP)

51,047

1.13

50,484

1.83

Interest income/earning assets

4.91

4.40

Interest expense/earning assets

2.63

2.20

Net interest margin

2.28

2.20

Tax-equivalent interest income/earning assets (Non-GAAP)(1)

4.92

4.41

Interest expense/earning assets

2.63

2.20

Tax-equivalent net interest margin (Non-GAAP)(3)

2.28

2.21

__________________________ (1)

Tax-equivalent income and related measures have been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $159 thousand and $259 thousand for the twelve months ended December 31, 2024 and December 31, 2023, respectively.

(2)

The Company did not have any loans on non-accrual as of December 31, 2024 and December 31, 2023.

(3)

Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components.

John Marshall Bancorp, Inc.

Average Balance Sheets, Interest and Rates (unaudited)

(Dollar amounts in thousands)

Three Months Ended December 31, 2024

Three Months Ended December 31, 2023

Interest Income /

Average

Interest Income /

Average

(Dollars in thousands)

Average Balance

Expense

Rate

Average Balance

Expense

Rate

Assets:

Securities:

Taxable

241,950

1,219

2.00

271,884

1,388

2.03

Tax-exempt(1)

1,379

3.17

1,380

3.16

Total securities

243,329

1,230

2.01

273,264

1,399

2.03

Loans, net of unearned income(2):

Taxable

1,821,664

24,913

5.44

1,810,046

22,852

5.01

Tax-exempt(1)

16,862

166

3.92

27,809

289

4.12

Total loans, net of unearned income

1,838,526

25,079

5.43

1,837,855

23,141

5.00

Interest-bearing deposits in other banks

141,870

1,723

4.83

149,237

2,121

5.64

Total interest-earning assets

2,223,725

28,032

5.01

2,260,356

26,661

4.68

Total non-interest earning assets

14,337

19,704

Total assets

2,238,062

2,280,060

Liabilities & Shareholders’ Equity:

Interest-bearing deposits

NOW accounts

351,135

2,315

2.62

323,950

2,320

2.84

Money market accounts

347,105

2,518

2.89

327,198

2,590

3.14

Savings accounts

43,720

134

1.22

53,331

157

1.17

Time deposits

709,713

8,041

4.51

803,679

8,510

4.20

Total interest-bearing deposits

1,451,673

13,008

3.56

1,508,158

13,577

3.57

Federal funds purchased

—

N/M

326

6.08

Subordinated debt

24,778

349

5.60

24,695

349

5.61

Federal Reserve Bank borrowings

—

N/M

54,000

640

4.70

Federal Home Loan Bank advances

56,001

572

4.06

—

Total interest-bearing liabilities

1,532,452

13,929

3.62

1,587,179

14,571

3.64

Demand deposits

442,303

447,881

Other liabilities

16,782

19,282

Total liabilities

1,991,537

2,054,342

Shareholders’ equity

246,525

225,718

Total liabilities and shareholders’ equity

2,238,062

2,280,060

Tax-equivalent net interest income and spread (Non-GAAP)(1)

14,103

1.39

12,090

1.04

Less: tax-equivalent adjustment

Net interest income and spread (GAAP)

14,066

1.39

12,027

1.03

Interest income/earning assets

5.01

4.67

Interest expense/earning assets

2.49

2.56

Net interest margin

2.52

2.11

Tax-equivalent interest income/earning assets (Non-GAAP)(1)

5.01

4.68

Interest expense/earning assets

2.49

2.56

Tax-equivalent net interest margin (Non-GAAP)(3)

2.52

2.12

__________________________

(1)

Tax-equivalent income and related measures have been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $37 thousand and $63 thousand for the three months ended December 31, 2024 and December 31, 2023, respectively.

(2)

The Company did not have any loans on non-accrual as of December 31, 2024 and December 31, 2023.

(3)

John Marshall Bancorp, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (unaudited)

(Dollar amounts in thousands)

As of

December 31, 2024

December 31, 2023

Regulatory Ratios (Bank)

Total risk-based capital (GAAP)

295,119

282,082

Less: Unrealized losses on available-for-sale securities, net of tax benefit (1)

10,732

12,401

Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1)

12,353

12,469

Adjusted total risk-based capital, excluding unrealized losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP)

272,034

257,212

Tier 1 capital (GAAP)

276,468

263,637

Less: Unrealized losses on available-for-sale securities, net of tax benefit (1)

10,732

12,401

Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1)

12,353

12,469

Adjusted tier 1 capital, excluding unrealized losses on available-for-sale and held-to-maturity securities, net of tax benefit (Non-GAAP)

253,383

238,767

Risk weighted assets (GAAP)

1,819,888

1,794,769

Less: Risk weighted available-for-sale securities

19,623

24,184

Less: Risk weighted held-to-maturity securities

16,462

17,079

Adjusted risk weighted assets, excluding available-for-sale and held-to-maturity securities (Non-GAAP)

1,783,803

1,753,506

Total average assets for leverage ratio (GAAP)

2,235,952

2,274,911

Less: Unrealized losses on available-for-sale securities, net of tax benefit (1)

10,732

12,401

Less: Unrealized losses on held-to-maturity securities, net of tax benefit (1)

12,353

12,469

Adjusted total average assets for leverage ratio, excluding available-for-sale and held-to-maturity securities (Non-GAAP)

2,212,867

2,250,041

Total risk-based capital ratio (2)

Total risk-based capital ratio (GAAP)

16.2

15.7

Adjusted total risk-based capital ratio (Non-GAAP) (3)

15.3

14.7

Tier 1 capital ratio (4)

Tier 1 risk-based capital ratio (GAAP)

15.2

14.7

Adjusted tier 1 risk-based capital ratio (Non-GAAP) (5)

14.2

13.5

Common equity tier 1 ratio (6)

Common equity tier 1 ratio (GAAP)

15.2

14.7

Adjusted common equity tier 1 ratio (Non-GAAP) (7)

14.2

13.5

Leverage ratio (8)

Leverage ratio (GAAP)

12.4

11.6

Adjusted leverage ratio (Non-GAAP) (9)

11.5

10.6

__________________________ (1)

Includes tax benefit calculated using the federal statutory tax rate of 21%.

(2)

The total risk-based capital ratio is calculated by dividing total risk-based capital by risk weighted assets.

(3)

The adjusted total risk-based capital ratio is calculated by dividing adjusted total risk-based capital by adjusted risk weighted assets.

(4)

The tier 1 capital ratio is calculated by dividing tier 1 capital by risk weighted assets.

(5)

The adjusted tier 1 capital ratio is calculated by dividing adjusted tier 1 capital by adjusted risk weighted assets.

(6)

The common equity tier 1 ratio is calculated by dividing tier 1 capital by risk weighted assets.

(7)

The adjusted common equity tier 1 ratio is calculated by dividing adjusted tier 1 capital by adjusted risk weighted assets.

(8)

The leverage ratio is calculated by dividing tier 1 capital by total average assets for leverage ratio.

(9)

The adjusted leverage ratio is calculated by dividing adjusted tier 1 capital by adjusted total average assets for leverage ratio.

John Marshall Bancorp, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (unaudited)

(Dollar amounts in thousands, except per share data)

For the Twelve Months Ended

December 31, 2023

Non-interest income (loss) (GAAP)

(14,940

)

Adjustment: Pre-tax loss recognized on sale of available-for-sale securities

17,114

Core non-interest income (Non-GAAP)

2,174

Income (loss) before taxes (GAAP)

7,981

Adjustment: Pre-tax loss recognized on sale of available-for-sale securities

17,114

Core income before taxes (Non-GAAP)

25,095

Income tax expense (benefit) (GAAP)

2,823

Adjustment: Tax and 10% modified endowment contract penalty on early surrender of BOLI policies

(1,101

)

Adjustment: Tax benefit of loss recognized on sale of available-for-sale securities

3,594

Core income tax expense (Non-GAAP)(1)

5,316

Net income (loss) (GAAP)

5,158

Core net income (Non-GAAP)(2)

19,779

Earnings (loss) per share - basic (GAAP)

0.36

Core earnings per share - basic (Non-GAAP)(3)

1.40

Earnings (loss) per share - diluted (GAAP)

0.36

Core earnings per share - diluted (Non-GAAP)(3)

1.39

Return on average assets (annualized) (GAAP)

0.22

Core return on average assets (annualized) (Non-GAAP)(4)

0.85

Return on average equity (annualized) (GAAP)

2.32

Core return on average equity (annualized) (Non-GAAP)(5)

8.91

Non-interest income (loss) as a percentage of average assets (annualized) (GAAP)

(0.64

Core non-interest income as a percentage of average assets (annualized) (Non-GAAP)(6)

0.09

Efficiency ratio (GAAP)

86.7

Core efficiency ratio (Non-GAAP)(7)

58.5

For the Three Months Ended

December 31, 2024

September 30, 2024

December 31, 2023

Pre-tax, pre-provision earnings (Non-GAAP)

Income before income taxes

6,104

5,342

5,878

Adjustment: Provision for (recovery of) credit losses

298

400

(781

)

Pre-tax, pre-provision earnings (Non-GAAP)(8)

6,402

5,742

5,097

__________________________ (1)

Includes tax benefit (expense) calculated using the federal statutory tax rate of 21%.

(2)

Core net income reflects net income adjusted for the non-recurring tax effected loss recognized on the sale of available-for-sale securities in and non-recurring tax expense associated with the surrender of the Company’s BOLI policies in July 2023. It is calculated by subtracting core income tax expense from core income before taxes for each period presented.

(3)

Core earnings per share – basic and core earnings per share – diluted is calculated by dividing core net income by basic weighted average shares outstanding and diluted weighted average shares outstanding, respectively, for each period presented.

(4)

Core return on average assets (annualized) is calculated by dividing annualizing core net income by average assets for each period presented.

(5)

Core return on average equity (annualized) is calculated by dividing annualizing core net income by average equity for each period presented.

(6)

Core non-interest income as a percentage of average assets (annualized) is calculated by dividing annualized core non-interest income by average assets for each period presented.

(7)

Core efficiency ratio is calculated by dividing non-interest expense by the sum of core non-interest income and net interest income for each period presented.

(8)

Pre-tax, pre-provision earnings is calculated by adjusting income before taxes for provision for (recovery of) credit losses.

Category: Earnings

View source version on businesswire.com: https://www.businesswire.com/news/home/20250129836411/en/

Christopher W. Bergstrom, (703) 584-0840 Kent D. Carstater, (703) 289-5922

John Marshall Bancorp (NASDAQ:JMSB)
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John Marshall Bancorp (NASDAQ:JMSB)
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