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John Marshall Bancorp, Inc. Reports Third Quarter 2023 Results

11.3% Annualized Loan Growth Supported By Strong Balance Sheet

John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported its financial results for the three and nine months ended September 30, 2023.

Selected Highlights

  • Strong Loan Growth – Loans, net of unearned income, grew $95.0 million or 5.5% from September 30, 2022 to September 30, 2023. Loans, net of unearned income, grew $50.3 million or 11.3% annualized from June 30, 2023 to September 30, 2023. The Company’s loan pipeline headed into the fourth quarter of 2023 continues to be strong as we are seeing increased lending opportunities that meet our underwriting standards and, in many cases, fewer competitors for those loans as some market participants have scaled back lending efforts.
  • Pristine Asset Quality – For the sixteenth consecutive quarter, the Company had no nonperforming loans, no other real estate owned and no loans 30 days or more past due. There were no charge-offs during the quarter. The Company continues to adhere to strict underwriting standards and proactively manages the portfolio.
  • Well Capitalized – Each of the Bank’s regulatory capital ratios is well in excess of the regulatory threshold to be considered well capitalized. The Bank’s equity to assets and total risk-based capital ratios were 10.6% and 15.7%, respectively, as of September 30, 2023.
  • Continued Strength in CRE Loan Portfolio – The Company’s loan portfolio remains a source of strength. As of September 30, 2023, the Company’s commercial real estate (“CRE”) non-owner occupied and owner-occupied portfolios had a weighted average loan-to-values of 50.2% and 55.1%, respectively, and weighted average debt service coverage ratios of 2.1x and 3.5x, respectively.
  • Decreased Wholesale Deposits – The Company reduced wholesale deposits (i.e., Brokered and QwickRate CDs) by $58.7 million or 16.3% during the three months ended September 30, 2023. Year-to-date, the Company reduced wholesale deposits by $73.7 million or 19.7%. As outlined in the deposit detail table included in this release, wholesale deposits have declined in each of the past two quarters by a total of $95.4 million.
  • Increased Core Deposits – During the quarter, the Company grew non-interest bearing demand deposits by $3.9 million or 3.6% annualized. Non-interest bearing deposits as a percentage of total deposits increased from 21.2% at June 30, 2023 to 22.1% as of September 30, 2023. Non-maturing deposits increased $16.5 million during the three months ended September 30, 2023, representing 5.7% annualized growth. Core customer funding sources, as defined in the deposit detail table included with this release, increased from 80.3% as of June 30, 2023 to 82.6% as of September 30, 2023.
  • Stabilizing Net Interest Margin – Net interest margin was 2.08% for the three months ended September 30, 2023 compared to 2.10% for the three months ended June 30, 2023 and 3.10% for the three months ended September 30, 2022. The Company realized the initial benefits of the July 2023 balance sheet restructuring disclosed in the Company’s earnings release and Form 10-Q for the second quarter of 2023 (the “Restructuring”). We continue to redeploy the Restructuring proceeds into higher yielding, high-quality earning assets and pay down higher cost funding sources. As a result of the Restructuring, strong loan growth and reduction of wholesale deposits, net interest margin progressively improved throughout the quarter and ended the month of September at 2.13%.

Chris Bergstrom, President and Chief Executive Officer, commented, “By selling low yielding assets through the Restructuring, we increased the flexibility and earnings horsepower of our balance sheet. Part of the proceeds from the Restructuring were redeployed into the loan growth anticipated in last quarter’s earnings release and enabled us to enhance our earning asset yield. Part of the Restructuring proceeds were utilized to pay down higher cost wholesale funding, which we expect will slow the rate of increase on our cost of funds. Part of the proceeds are awaiting redeployment, but are earning a higher yield than they were prior to the Restructuring. We anticipate putting these funds to work in the fourth quarter, as our loan pipeline remains strong. In addition, we are encouraged by our core non-maturing deposit growth and improved funding mix during the quarter. Our balance sheet remains strong. We continue to have excellent asset quality and robust liquidity. While the quarter’s reported results reflect the non-recurring impact of the Restructuring, core operating performance of the Company remains strong and we have enhanced our ability to drive earnings growth.”

Balance Sheet, Liquidity and Credit Quality

Total assets were $2.30 billion at September 30, 2023, $2.36 billion at June 30, 2023 and $2.31 billion at September 30, 2022. As discussed in more detail below, the Company reduced wholesale deposits by $58.7 million during the quarter.

Total loans, net of unearned income, increased $95.0 million or 5.5% to $1.82 billion at September 30, 2023, compared to $1.73 billion at September 30, 2022 and $50.3 million during the quarter ended September 30, 2023 or 11.3% annualized from $1.77 billion at June 30, 2023. The increase in loans during both comparative periods was primarily attributable to growth in the residential mortgage and commercial investor real estate loan portfolios.

The carrying value of the Company’s fixed income securities portfolio was $265.4 million at September 30, 2023, $422.7 million at June 30, 2023 and $467.1 million at September 30, 2022. The reduction in the portfolio resulted from the Restructuring, which was previously disclosed in our July 21, 2023 earnings release. As of September 30, 2023, 96.2% of our bond portfolio was covered by the implied guarantee of the United States government or one of its agencies. At September 30, 2023, nearly 67% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At September 30, 2023, the fixed income portfolio had an estimated weighted average life of 4.5 years. The available-for-sale portfolio comprised approximately 66% of the fixed income securities portfolio and had a weighted average life of 3.2 years at September 30, 2023. The held-to-maturity portfolio comprised approximately 34% of the fixed income securities portfolio and had a weighted average life of 7.0 years at September 30, 2023. The Company did not purchase any fixed income securities during the three or nine month periods ended September 30, 2023.

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 $742.5 million as of September 30, 2023 compared to $839.4 million as of June 30, 2023 and represented 32.3% and 35.5% of total assets, respectively. Wholesale deposits, defined as brokered and QwickRate certificates of deposit, decreased $58.7 million or 16.3% from $359.1 million at June 30, 2023 to $300.5 million at September 30, 2023. As discussed above, the Company also funded $50.3 million of net loan growth during the quarter ended September 30, 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity Trends

 

 

 

September 30, 2023

 

 

June 30, 2023

 

 

March 31, 2023

 

 

December 31, 2022

 

 

September 30, 2022

 

(Dollars in thousands)

 

 

Amount

% of Assets

 

 

Amount

% of Assets

 

 

Amount

% of Assets

 

 

Amount

% of Assets

 

 

Amount

% of Assets

 

Cash

 

$

192,656

8.4

%

$

129,551

5.5

%

$

103,359

4.4

%

$

61,599

2.6

%

$

74,756

3.2

%

Unencumbered Securities

 

 

80,267

3.5

%

 

233,695

9.9

%

 

298,194

12.7

%

 

313,618

13.4

%

 

345,987

15.0

%

Available Secured Borrowing Capacity

 

 

469,524

20.4

%

 

476,144

20.1

%

 

451,008

19.2

%

 

388,257

16.5

%

 

401,828

17.4

%

Total Liquidity

 

$

742,447

32.3

%

$

839,390

35.5

%

$

852,561

36.3

%

$

763,474

32.5

%

$

822,571

35.6

%

If the Company were to avail itself of additional Bank Term Funding Program (“BTFP”) funding, we estimate an incremental increase in our liquidity position of approximately $13.4 million, increasing our potential liquidity to $755.8 million as of September 30, 2023. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at September 30, 2023.

Total deposits were $1.98 billion at September 30, 2023, $2.05 billion at June 30, 2023 and $2.06 billion at September 30, 2022. Total deposits decreased $64.7 million or 3.2% when compared to June 30, 2023. The decrease was primarily due to a managed reduction in costlier wholesale deposits of $58.7 million or 16.3% during the quarter. NOW deposits increased $34.3 million or 11.0% to partially offset the decrease in wholesale deposits. As of September 30, 2023, the Company had $614.0 million of deposits that were not insured or not collateralized by securities compared to $697.0 million at June 30, 2023. Deposits that were not insured or not collateralized by securities represented only 31.0% of total deposits at September 30, 2023 compared to 34.1% at June 30, 2023.

The Company obtained a $54.0 million advance from the BTFP on May 15, 2023 to secure lower funding costs relative to wholesale deposits. The BTFP advance has a term of one year, bears interest at a fixed rate of 4.80% and can be prepaid without penalty prior to maturity. Total borrowings as of September 30, 2023 consisted of subordinated debt totaling $24.7 million and the BTFP advance totaling $54.0 million. The Company did not have any FHLB advances or federal funds purchased outstanding as of September 30, 2023.

Shareholders’ equity increased $18.4 million or 9.1% to $220.6 million at September 30, 2023 compared to $202.2 million at September 30, 2022. Book value per share was $15.61 as of September 30, 2023 compared to $14.37 as of September 30, 2022. The year-over-year change in book value per share was primarily due to the Company’s earnings over the previous twelve months and decrease in accumulated other comprehensive loss, partially offset by increased share count from shareholder option exercises and restricted share award issuances and dividends paid. The decrease in accumulated other comprehensive loss was primarily attributable to the sale of certain available-for-sale investment securities in the July 2023 Restructuring. Book value per share was $15.50 as of June 30, 2023.

The Bank’s capital ratios at September 30, 2023 improved when compared to September 30, 2022 and remained well above regulatory thresholds for well-capitalized banks. As of September 30, 2023, the Bank’s total risk-based capital ratio was 15.7%, compared to 15.4% at September 30, 2022 (GAAP). As outlined below, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at September 30, 2023 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and the 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

 

September 30, 2023

 

December 31, 2022

 

September 30, 2022

Total risk-based capital ratio

 

 

10.0

%

 

15.7

%

 

15.6

%

 

15.4

%

Tier 1 risk-based capital ratio

 

 

8.0

%

 

14.6

%

 

14.4

%

 

14.3

%

Common equity tier 1 ratio

 

 

6.5

%

 

14.6

%

 

14.4

%

 

14.3

%

Leverage ratio

 

 

5.0

%

 

11.3

%

 

11.3

%

 

11.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

Well-Capitalized Threshold

 

September 30, 2023

 

December 31, 2022

 

September 30, 2022

Total risk-based capital ratio

 

 

10.0

%

 

14.1

%

 

13.8

%

 

13.4

%

Tier 1 risk-based capital ratio

 

 

8.0

%

 

12.9

%

 

12.6

%

 

12.2

%

Common equity tier 1 ratio

 

 

6.5

%

 

12.9

%

 

12.6

%

 

12.2

%

Leverage ratio

 

 

5.0

%

 

11.3

%

 

11.8

%

 

11.4

%

The Company recorded no charge-offs during the third quarter of 2023, during the second quarter of 2023 or during the third quarter of 2022. As of September 30, 2023, the Company had no non-accrual loans, no loans greater than 30 days past due and no other real estate owned assets.

At September 30, 2023, the allowance for loan credit losses was $20.0 million or 1.10% of outstanding loans, net of unearned income, compared to $20.6 million or 1.17% of outstanding loans, net of unearned income, at June 30, 2023. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, was primarily a result of changes in the Company’s loss driver analysis, resulting from a periodic review of our assumptions. The review resulted in a lower modeled probability of default, changes in prepayment and curtailment rates, and an assessment of management’s considerations of existing economic versus historical conditions combined with the continued strong credit performance of our loan portfolio segments.

At September 30, 2023, the allowance for credit losses on unfunded loan commitments was $0.9 million compared to $1.1 million at June 30, 2023. The decrease in the allowance for credit losses on unfunded loan commitments was primarily the result of the updated loss factors utilized on the funded loan portfolio.

The Company did not have an allowance for credit losses on held-to-maturity securities as of September 30, 2023 or June 30, 2023.

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 portfolios as of September 30, 2023, 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)

Office

60.7

%

4.3

x

129

$

84,512

47.1

%

1.9

x

64

$

124,288

Retail

61.0

%

2.3

x

43

 

61,170

51.2

%

1.9

x

142

 

396,544

Warehouse

62.3

%

2.4

x

28

 

37,359

46.5

%

3.0

x

24

 

33,558

Church

32.4

%

3.1

x

19

 

37,799

- -

 

- -

 

- -

 

- -

Hotel/Motel

- -

 

- -

 

- -

 

- -

48.6

%

2.2

x

7

 

39,282

Industrial

55.8

%

4.7

x

24

 

37,603

52.8

%

2.5

x

16

 

66,210

Other(4)

52.5

%

3.6

x

50

 

104,574

50.0

%

1.8

x

16

 

23,804

Total

 

 

 

 

293

$

363,017

 

 

 

 

269

$

683,686

___________________________

(1)

Loan-to-value is determined at origination date and is divided by principal balance as of September 30, 2023.

(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 a net loss of $10.1 million for the third quarter of 2023, a decrease of $18.2 million when compared to the third quarter of 2022. As disclosed in our July 21, 2023 earnings release discussing results for the quarter and year-ended June 30, 2023, during July the Company sold certain lower-yielding available-for-sale investment securities with a total par value of $161.2 million and agreed to surrender $21.4 million of bank owned life insurance (“BOLI”) contracts, resulting in a non-recurring, after-tax loss of $14.6 million that was recorded during the third quarter of 2023. Core net income (Non-GAAP) defined as reported net income excluding the non-recurring after-tax loss and taxes paid in conjunction with the surrender of the Bank’s BOLI policies resulting from the Restructuring, was $4.5 million, a decrease of $3.6 million when compared to the third quarter of 2022 and consistent with net income reported for the second quarter of 2023. Reported (GAAP) and core (Non-GAAP) earnings per share, annualized return on average assets (“ROAA”) and annualized return on average equity (“ROAE”) were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

September 30, 2023

June 30, 2023

 

September 30, 2022

 

Net income (loss) (GAAP)

 

$

(10,137

)

$

4,490

 

$

8,045

 

Add: Loss on securities sale, net of tax

 

 

13,520

 

 

-

 

 

-

 

Add: Non-recurring tax and 10% modified endowment contract penalty on early surrender of BOLI policies

 

 

1,101

 

 

-

 

 

-

 

Core net income (Non-GAAP)

 

$

4,484

 

$

4,490

 

$

8,045

 

Earnings per share - diluted (GAAP)

 

$

(0.72

)

$

0.32

 

$

0.57

 

Core earnings per share - diluted (Non-GAAP)

 

$

0.32

 

$

0.32

 

$

0.57

 

Return on average assets (annualized) (GAAP)

 

 

(1.73

)%

 

0.77

%

 

1.38

%

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

 

 

0.76

%

 

0.77

%

 

1.38

%

Return on average equity (annualized) (GAAP)

 

 

(18.24

)%

 

8.13

%

 

15.07

%

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

 

 

8.07

%

 

8.13

%

 

15.07

%

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.

Net interest income for the third quarter of 2023 decreased $5.7 million or 32.3% compared to the third quarter of 2022, driven primarily by the increase in costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.54% for the third quarter of 2023 compared to 3.71% for the same period in 2022. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and investment portfolios and deposits in banks as a result of increases in interest rates subsequent to the third quarter of 2022. The cost of interest-bearing liabilities was 3.41% for the third quarter of 2023 compared to 0.90% for the same quarter in the prior year. The increase in the cost of interest-bearing liabilities was primarily due to a 2.53% 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 third quarter of 2022. The increase in the overall cost of interest-bearing liabilities in the third quarter of 2023 relative to the same period of the prior year is largely due to rate hikes totaling 5.25% by the Federal Reserve Bank since the beginning of 2022, which has increased cost of funds and compressed net interest margins across the banking industry. The annualized net interest margin for the third quarter of 2023 was 2.08% as compared to 3.10% for the same quarter of the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company’s interest-earning assets. With a portion of the proceeds from the Restructuring being redeployed to higher yielding assets, the Company’s net interest margin increased each month during the third quarter to 2.13% for the month of September 2023.

The Company recorded an $829 thousand release of provision for credit losses for the third quarter of 2023 compared to no provision for the third quarter of 2022. The release of provision for credit losses during the third quarter of 2023 was primarily a result of changes in the Company’s loss driver analysis, resulting from a periodic review of our assumptions. The review resulted in a lower modeled probability of default, changes in prepayment and curtailment rates, and an assessment of management’s considerations of existing economic versus historical conditions combined with the continued strong credit performance of our loan portfolio segments.

Non-interest income decreased $17.3 million during the third quarter of 2023 compared to the third quarter of 2022. The decrease in non-interest income was primarily due to the Restructuring that resulted in a loss of $17.1 million. Core non-interest income (Non-GAAP) defined as reported non-interest income excluding the $17.1 million loss stemming from the bond sale portion of the Restructuring, decreased $151 thousand primarily as a result of a decrease in bank owned life insurance (“BOLI”) income of $232 thousand due to the surrender of all BOLI policies as part of the Restructuring. This decrease was partially offset by favorable variances of $47 thousand related to mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan and gains recorded on the sale of the guaranteed portion of SBA 7(a) loans totaling $27 thousand when compared to the third quarter of 2022.

Non-interest expense decreased $298 thousand or 3.7% during the third quarter of 2023 compared to the third quarter of 2022 primarily due to the reversal of a litigation reserve totaling $322 thousand as a result of a favorable verdict received by the Company on a multi-year legal matter that was resolved during the quarter. The decrease was partially offset by increases in FDIC insurance expense and franchise tax expense. The increase in FDIC insurance expense resulted from the FDIC increasing the base assessment rate for all insured depository institutions. The increase in franchise tax expense was due to an increase in the Bank’s equity as that is the basis the Commonwealth of Virginia uses to assess taxes on banking institutions. The decrease in salaries and employee benefits was due to lower benefit costs incurred by the Company. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The Company continues to analyze cost savings opportunities on existing leases and material contracts.

For the three months ended September 30, 2023, annualized non-interest expense to average assets was 1.30% compared to 1.36% for the three months ended September 30, 2022. The decrease was primarily due to lower overhead costs as a result of continued cost consciousness.

For the three months ended September 30, 2023, the annualized core efficiency ratio (Non-GAAP), which excludes the impact of the Restructuring, was 62.4% compared to 43.9% for the three months ended September 30, 2022. The increase was primarily due to a decrease in net interest income and to a lesser extent a decrease in non-interest income.

Year-to-Date Results

The Company reported net income of $656 thousand for the nine months ended September 30, 2023, a decrease of $22.9 million when compared to the same period in 2022. This decrease was primarily attributable to the Restructuring, as previously discussed, that resulted in an after-tax loss of $14.6 million. Core net income (Non-GAAP) for the nine months ended September 30, 2023 was $15.3 million, a decrease of $8.3 million when compared to the same period in 2022. Reported (GAAP) and core (Non-GAAP) earnings per share, ROAA and ROAE were as follows:

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2023

 

September 30, 2022

 

Net income (GAAP)

 

$

656

 

$

23,601

 

Add: Loss on securities sale, net of tax

 

 

13,520

 

 

-

 

Add: Non-recurring tax and 10% modified endowment contract penalty on early surrender of BOLI policies

 

 

1,101

 

 

-

 

Core net income (Non-GAAP)

 

$

15,277

 

$

23,601

 

Earnings per share - diluted (GAAP)

 

$

0.05

 

$

1.67

 

Core earnings per share - diluted (Non-GAAP)

 

$

1.08

 

$

1.67

 

Return on average assets (annualized) (GAAP)

 

 

0.04

%

 

1.40

%

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

 

 

0.87

%

 

1.40

%

Return on average equity (annualized) (GAAP)

 

 

0.40

%

 

15.03

%

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

 

 

9.25

%

 

15.03

%

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.

Net interest income for the nine months ended September 30, 2023 decreased $14.5 million or 27.3% compared to the same period of 2022, driven primarily by the increase in costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.32% for the nine months ended September 30, 2023 compared to 3.65% for the same period in 2022. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and investment portfolios and deposits in banks as a result of increases in interest rates subsequent to the second quarter of 2022. The cost of interest-bearing liabilities was 2.89% for the nine months ended September 30, 2023 compared to 0.67% for the nine months ended September 30, 2022. The increase in the cost of interest-bearing liabilities was primarily due to a 2.26% 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 third quarter of 2022. The annualized net interest margin for the nine months ended September 30, 2023 was 2.25% as compared to 3.19% for the same period in the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company’s interest-earning assets.

The Company recorded a $2.5 million release of provision for credit losses for the nine months ended September 30, 2023 compared to no provision for the nine months ended September 30, 2022. The release of provision for credit losses during the third quarter of 2023 was primarily a result of changes in the Company’s loss driver analysis, resulting from a periodic review of our assumptions. The review resulted in a lower modeled probability of default, changes in prepayment and curtailment rates, and an assessment of management’s considerations of existing economic versus historical conditions combined with the continued strong credit performance of our loan portfolio segments.

Non-interest income decreased $16.5 million during the nine months ended September 30, 2023 compared to the same period in 2022. The decrease in non-interest income was primarily due to the Restructuring that resulted in a loss of $17.1 million. Core non-interest income (Non-GAAP) increased $577 thousand primarily due to favorable variances of $610 thousand as a result of mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan. The Company also had an increase in other service charges and fee income of $208 thousand primarily as a result of penalty fee income recognized on the early withdrawal of certificates of deposit, a $91 thousand increase in customer interest rate swap fee income and gains recorded on the sale of the guaranteed portion of SBA 7(a) loans totaling $50 thousand. These increases were partially offset by a decrease in BOLI income of $221 thousand due to the surrender of all BOLI policies as part of the Restructuring.

Non-interest expense decreased $1.2 million or 4.8% during the nine months ended September 30, 2023 compared to the same period in 2022 primarily due to decreases in salaries and employee benefits expense. The decrease in salaries and employee benefits was primarily due to a reduction in incentive compensation accruals when compared to the same period of the prior year. Incentive compensation accruals can fluctuate materially from quarter to quarter, based upon the Company’s financial performance and conditions measured against, among other evaluation criteria, our strategic plan and budget. At the end of each year, the ultimate determination of the incentive compensation is approved by the Board of Directors. The decrease in other expense was due to the reversal of a litigation reserve previously discussed and lower legal and consulting expenses, partially offset by increases in FDIC insurance expense, franchise tax expense and marketing expense. The increase in FDIC insurance expense resulted from the FDIC increasing the base assessment rate for all insured depository institutions. The increase in franchise tax expense was due to an increase in the Bank’s equity as that is the basis the Commonwealth of Virginia uses to assess taxes on banking institutions. The increase in marketing expense was due to increased marketing and promotional activity. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets.

For the nine months ended September 30, 2023, annualized non-interest expense to average assets was 1.33% compared to 1.45% for the nine months ended September 30, 2022. The decrease was primarily due to lower overhead costs as a result of continued cost consciousness.

For the nine months ended September 30, 2023, the annualized core efficiency ratio (Non-GAAP) was 58.1% compared to 45.3% for the nine months ended September 30, 2022. The increase was primarily due to a decrease in net interest income, which more than offset the increase in core non-interest income (Non-GAAP) and decrease in non-interest expense.

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 the impact of unrealized losses in the Company’s bond portfolio on the Bank’s regulatory capital ratios and period-to-period operating performance, respectively. 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:

  • The impact to the Bank’s regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and the losses realized.
  • 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 bank owned life insurance policies.

These disclosures should not be viewed as a substitute for 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 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 a $2.30 billion asset bank headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington D.C. Metro 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.

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 credit losses; 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 potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events (such as COVID-19), and of 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 Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2023

2022

 

2023

2022

 

Selected Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

192,656

 

$

74,756

 

$

192,656

 

$

74,756

 

Total investment securities

 

 

272,881

 

 

473,478

 

 

272,881

 

 

473,478

 

Loans, net of unearned income

 

 

1,820,132

 

 

1,725,114

 

 

1,820,132

 

 

1,725,114

 

Allowance for loan credit losses

 

 

20,036

 

 

20,032

 

 

20,036

 

 

20,032

 

Total assets

 

 

2,298,202

 

 

2,305,540

 

 

2,298,202

 

 

2,305,540

 

Non-interest bearing demand deposits

 

 

437,880

 

 

535,186

 

 

437,880

 

 

535,186

 

Interest bearing deposits

 

 

1,543,743

 

 

1,528,155

 

 

1,543,743

 

 

1,528,155

 

Total deposits

 

 

1,981,623

 

 

2,063,341

 

 

1,981,623

 

 

2,063,341

 

Federal funds purchased

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Federal Home Loan Bank advances

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Federal Reserve Bank borrowings

 

 

54,000

 

 

- -

 

 

54,000

 

 

- -

 

Shareholders' equity

 

 

220,567

 

 

202,212

 

 

220,567

 

 

202,212

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Results of Operations

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

26,263

 

$

21,208

 

$

74,171

 

$

60,509

 

Interest expense

 

 

14,284

 

 

3,516

 

 

35,715

 

 

7,593

 

Net interest income

 

 

11,979

 

 

17,692

 

 

38,456

 

 

52,916

 

Provision for (recovery of) credit losses

 

 

(829

)

 

- -

 

 

(2,471

)

 

- -

 

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

 

 

12,808

 

 

17,692

 

 

40,927

 

 

52,916

 

Non-interest income (loss)

 

 

(16,815

)

 

450

 

 

(15,564

)

 

973

 

Core non-interest income(1)

 

 

299

 

 

450

 

 

1,550

 

 

973

 

Non-interest expense

 

 

7,660

 

 

7,958

 

 

23,261

 

 

24,425

 

Income (Loss) before income taxes

 

 

(11,667

)

 

10,184

 

 

2,102

 

 

29,464

 

Core income before income taxes(1)

 

 

5,447

 

 

10,184

 

 

19,216

 

 

29,464

 

Net income (loss)

 

 

(10,137

)

 

8,045

 

 

656

 

 

23,601

 

Core net income(1)

 

 

4,484

 

 

8,045

 

 

15,277

 

 

23,601

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data and Shares Outstanding

 

 

 

 

 

Earnings (loss) per share - basic

 

$

(0.72

)

$

0.57

 

$

0.05

 

$

1.69

 

Core earnings per share - basic(1)

 

$

0.32

 

$

0.57

 

$

1.08

 

$

1.69

 

Earnings (loss) per share - diluted

 

$

(0.72

)

$

0.57

 

$

0.05

 

$

1.67

 

Core earnings per share - diluted(1)

 

$

0.32

 

$

0.57

 

$

1.08

 

$

1.67

 

Book value per share

 

$

15.61

 

$

14.37

 

$

15.61

 

$

14.37

 

Weighted average common shares (basic)

 

 

14,080,026

 

 

13,989,414

 

 

14,126,522

 

 

13,902,324

 

Weighted average common shares (diluted)

 

 

14,080,026

 

 

14,108,286

 

 

14,199,179

 

 

14,065,887

 

Common shares outstanding at end of period

 

 

14,126,084

 

 

14,070,080

 

 

14,126,084

 

 

14,070,080

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

(1.73

)%

 

1.38

%

 

0.04

%

 

1.40

%

Core return on average assets (annualized)(1)

 

 

0.76

 

 

1.38

 

 

0.87

 

 

1.40

 

Return on average equity (annualized)

 

 

(18.24

)%

 

15.07

%

 

0.40

%

 

15.03

%

Core return on average equity (annualized)(1)

 

 

8.07

 

 

15.07

 

 

9.25

 

 

15.03

 

Net interest margin

 

 

2.08

%

 

3.10

%

 

2.25

%

 

3.19

%

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

 

 

(2.86

)%

 

0.08

%

 

(0.89

)%

 

0.06

%

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

 

 

0.05

 

 

0.08

 

 

0.09

 

 

0.06

 

Non-interest expense to average assets (annualized)

 

 

1.30

%

 

1.36

%

 

1.33

%

 

1.45

%

Efficiency ratio

 

 

(158.4

)%

 

43.9

%

 

101.6

%

 

45.3

%

Core efficiency ratio(1)

 

 

62.4

 

 

43.9

 

 

58.1

 

 

45.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets to total assets

 

 

- -

%

 

- -

%

 

- -

%

 

- -

%

Non-performing loans to total loans

 

 

- -

%

 

- -

%

 

- -

%

 

- -

%

Allowance for loan credit losses to non-performing loans

 

 

N/M

 

 

N/M

 

 

N/M

 

 

N/M

 

Allowance for loan credit losses to total loans

 

 

1.10

%

 

1.16

%

 

1.10

%

 

1.16

%

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

 

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due and accruing interest

 

$

- -

 

$

- -

 

$

- -

 

$

- -

 

Non-accrual loans

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Other real estate owned

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Non-performing assets (2)

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Level)

 

 

 

 

 

 

 

 

 

 

 

Equity / assets

 

 

10.6

%

 

9.7

%

 

10.6

%

 

9.7

%

Total risk-based capital ratio

 

 

15.7

%

 

15.4

%

 

15.7

%

 

15.4

%

Tier 1 risk-based capital ratio

 

 

14.6

%

 

14.3

%

 

14.6

%

 

14.3

%

Common equity tier 1 ratio

 

 

14.6

%

 

14.3

%

 

14.6

%

 

14.3

%

Leverage ratio

 

 

11.3

%

 

11.0

%

 

11.3

%

 

11.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

Number of full time equivalent employees

 

 

138

 

 

136

 

 

138

 

 

136

 

# Full service branch offices

 

 

8

 

 

8

 

 

8

 

 

8

 

# Loan production or limited service branch offices

 

 

- -

 

 

1

 

 

- -

 

 

1

 

___________________________

(1)

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

 

 

September 30,

 

December 31,

 

September 30,

 

Last Nine

 

Year Over

 

 

2023

 

2022

 

2022

 

Months

 

Year

Assets

 

(Unaudited)

 

*

 

(Unaudited)

 

 

 

 

Cash and due from banks

 

$

7,642

 

 

$

6,583

 

 

$

14,957

 

 

16.1

%

 

(48.9

)%

Interest-bearing deposits in banks

 

 

185,014

 

 

 

55,016

 

 

 

59,799

 

 

236.3

%

 

209.4

%

Securities available-for-sale, at fair value

 

 

169,084

 

 

 

357,576

 

 

 

366,546

 

 

(52.7

)%

 

(53.9

)%

Securities held-to-maturity, fair value of $75,733, $81,161, and $81,765 at 9/30/2023, 12/31/2022, and 9/30/2022, respectively.

 

 

96,347

 

 

 

99,415

 

 

 

100,598

 

 

(3.1

)%

 

(4.2

)%

Restricted securities, at cost

 

 

5,007

 

 

 

4,425

 

 

 

4,421

 

 

13.2

%

 

13.3

%

Equity securities, at fair value

 

 

2,443

 

 

 

2,115

 

 

 

1,913

 

 

15.5

%

 

27.7

%

Loans, net of unearned income

 

 

1,820,132

 

 

 

1,789,508

 

 

 

1,725,114

 

 

1.7

%

 

5.5

%

Allowance for credit losses

 

 

(20,036

)

 

 

(20,208

)

 

 

(20,032

)

 

(0.9

)%

 

0.0

%

Net loans

 

 

1,800,096

 

 

 

1,769,300

 

 

 

1,705,082

 

 

1.7

%

 

5.6

%

Bank premises and equipment, net

 

 

1,264

 

 

 

1,219

 

 

 

1,331

 

 

3.7

%

 

(5.0

)%

Accrued interest receivable

 

 

5,701

 

 

 

5,531

 

 

 

4,744

 

 

3.1

%

 

20.2

%

Bank owned life insurance

 

 

-

 

 

 

21,170

 

 

 

21,071

 

 

(100.0

)%

 

(100.0

)%

Right of use assets

 

 

4,136

 

 

 

4,611

 

 

 

3,936

 

 

(10.3

)%

 

5.1

%

Other assets

 

 

21,468

 

 

 

21,274

 

 

 

21,142

 

 

0.9

%

 

1.5

%

Total assets

 

$

2,298,202

 

 

$

2,348,235

 

 

$

2,305,540

 

 

(2.1

)%

 

(0.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing demand deposits

 

$

437,880

 

 

$

476,697

 

 

$

535,186

 

 

(8.1

)%

 

(18.2

)%

Interest-bearing demand deposits

 

 

675,819

 

 

 

691,945

 

 

 

705,593

 

 

(2.3

)%

 

(4.2

)%

Savings deposits

 

 

57,408

 

 

 

95,241

 

 

 

102,909

 

 

(39.7

)%

 

(44.2

)%

Time deposits

 

 

810,516

 

 

 

803,857

 

 

 

719,653

 

 

0.8

%

 

12.6

%

Total deposits

 

 

1,981,623

 

 

 

2,067,740

 

 

 

2,063,341

 

 

(4.2

)%

 

(4.0

)%

Federal funds purchased

 

 

- -

 

 

 

25,500

 

 

 

- -

 

 

N/M

 

 

N/M

 

Federal Reserve Bank borrowings

 

 

54,000

 

 

 

- -

 

 

 

- -

 

 

N/M

 

 

N/M

 

Subordinated debt, net

 

 

24,687

 

 

 

24,624

 

 

 

24,603

 

 

0.3

%

 

0.3

%

Accrued interest payable

 

 

2,610

 

 

 

1,035

 

 

 

643

 

 

152.2

%

 

305.9

%

Lease liabilities

 

 

4,415

 

 

 

4,858

 

 

 

4,186

 

 

(9.1

)%

 

5.5

%

Other liabilities

 

 

10,300

 

 

 

11,678

 

 

 

10,555

 

 

(11.8

)%

 

(2.4

)%

Total liabilities

 

 

2,077,635

 

 

 

2,135,435

 

 

 

2,103,328

 

 

(2.7

)%

 

(1.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

- -

 

 

 

- -

 

 

 

- -

 

 

N/M

 

 

N/M

 

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

 

 

- -

 

 

 

- -

 

 

 

- -

 

 

N/M

 

 

N/M

 

Common stock, voting, par value $0.01 per share; authorized 30,000,000 shares; issued and outstanding, 14,126,084 at 9/30/2023 including 45,871 unvested shares, 14,098,986 at 12/31/2022 including 55,185 unvested shares, and 14,070,080 at 9/30/2022, including 58,046 unvested shares

 

 

141

 

 

 

141

 

 

 

140

 

 

- -

%

 

0.7

%

Additional paid-in capital

 

 

95,510

 

 

 

94,726

 

 

 

94,560

 

 

0.8

%

 

1.0

%

Retained earnings

 

 

141,886

 

 

 

146,630

 

 

 

138,428

 

 

(3.2

)%

 

2.5

%

Accumulated other comprehensive loss

 

 

(16,970

)

 

 

(28,697

)

 

 

(30,916

)

 

(40.9

)%

 

(45.1

)%

Total shareholders' equity

 

 

220,567

 

 

 

212,800

 

 

 

202,212

 

 

3.6

%

 

9.1

%

Total liabilities and shareholders' equity

 

$

2,298,202

 

 

$

2,348,235

 

 

$

2,305,540

 

 

(2.1

)%

 

(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

 

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

 

September 30,

 

 

 

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

 

 

(Unaudited)

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

 

 

Interest and Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

21,925

 

 

$

18,222

 

 

20.3

%

 

$

63,355

 

 

$

53,740

 

 

17.9

%

Interest on investment securities, taxable

 

 

1,507

 

 

 

2,323

 

 

(35.1

)%

 

 

5,895

 

 

 

5,597

 

 

5.3

%

Interest on investment securities, tax-exempt

 

 

10

 

 

 

30

 

 

(66.7

)%

 

 

45

 

 

 

90

 

 

(50.0

)%

Dividends

 

 

75

 

 

 

62

 

 

21.0

%

 

 

222

 

 

 

185

 

 

20.0

%

Interest on deposits in other banks

 

 

2,746

 

 

 

571

 

 

N/M

 

 

 

4,654

 

 

 

897

 

 

N/M

 

Total interest and dividend income

 

 

26,263

 

 

 

21,208

 

 

23.8

%

 

 

74,171

 

 

 

60,509

 

 

22.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

13,273

 

 

 

3,068

 

 

N/M

 

 

 

33,590

 

 

 

6,090

 

 

N/M

 

Federal funds purchased

 

 

- -

 

 

 

- -

 

 

N/M

 

 

 

10

 

 

 

- -

 

 

N/M

 

Federal Home Loan Bank advances

 

 

- -

 

 

 

- -

 

 

N/M

 

 

 

67

 

 

 

42

 

 

59.5

%

Federal Reserve Bank borrowings

 

 

662

 

 

 

- -

 

 

N/M

 

 

 

1,001

 

 

 

- -

 

 

N/M

 

Subordinated debt

 

 

349

 

 

 

448

 

 

(22.1

)%

 

 

1,047

 

 

 

1,461

 

 

(28.3

)%

Total interest expense

 

 

14,284

 

 

 

3,516

 

 

306.3

%

 

 

35,715

 

 

 

7,593

 

 

370.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

11,979

 

 

 

17,692

 

 

(32.3

)%

 

 

38,456

 

 

 

52,916

 

 

(27.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) Credit Losses

 

 

(829

)

 

 

- -

 

 

N/M

 

 

 

(2,471

)

 

 

- -

 

 

N/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

12,808

 

 

 

17,692

 

 

(27.6

)%

 

 

40,927

 

 

 

52,916

 

 

(22.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

85

 

 

 

79

 

 

7.6

%

 

 

239

 

 

 

240

 

 

(0.4

)%

Bank owned life insurance

 

 

23

 

 

 

255

 

 

(91.0

)%

 

 

224

 

 

 

445

 

 

(49.7

)%

Other service charges and fees

 

 

160

 

 

 

175

 

 

(8.6

)%

 

 

677

 

 

 

469

 

 

44.3

%

Losses on sale of available-for-sale securities

 

 

(17,114

)

 

 

- -

 

 

N/M

 

 

 

(17,316

)

 

 

- -

 

 

N/M

 

Insurance commissions

 

 

54

 

 

 

47

 

 

14.9

%

 

 

310

 

 

 

312

 

 

(0.6

)%

Gain on sale of government guaranteed loans

 

 

27

 

 

 

- -

 

 

N/M

 

 

 

50

 

 

 

- -

 

 

N/M

 

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

 

 

(60

)

 

 

(107

)

 

(43.9

)%

 

 

112

 

 

 

(498

)

 

(122.5

)%

Other income

 

 

10

 

 

 

1

 

 

N/M

 

 

 

140

 

 

 

5

 

 

N/M

 

Total non-interest income (loss)

 

 

(16,815

)

 

 

450

 

 

(3,836.7

)%

 

 

(15,564

)

 

 

973

 

 

(1,699.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

5,052

 

 

 

5,072

 

 

(0.4

)%

 

 

14,929

 

 

 

15,754

 

 

(5.2

)%

Occupancy expense of premises

 

 

445

 

 

 

461

 

 

(3.5

)%

 

 

1,363

 

 

 

1,435

 

 

(5.0

)%

Furniture and equipment expenses

 

 

282

 

 

 

323

 

 

(12.7

)%

 

 

882

 

 

 

989

 

 

(10.8

)%

Other expenses

 

 

1,881

 

 

 

2,102

 

 

(10.5

)%

 

 

6,087

 

 

 

6,247

 

 

(2.6

)%

Total non-interest expenses

 

 

7,660

 

 

 

7,958

 

 

(3.7

)%

 

 

23,261

 

 

 

24,425

 

 

(4.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) before income taxes

 

 

(11,667

)

 

 

10,184

 

 

(214.6

)%

 

 

2,102

 

 

 

29,464

 

 

(92.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax Expense (Benefit)

 

 

(1,530

)

 

 

2,139

 

 

(171.5

)%

 

 

1,446

 

 

 

5,863

 

 

(75.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(10,137

)

 

$

8,045

 

 

(226.0

)%

 

$

656

 

 

$

23,601

 

 

(97.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.72

)

 

$

0.57

 

 

(226.3

)%

 

$

0.05

 

 

$

1.69

 

 

(97.0

)%

Diluted

 

$

(0.72

)

 

$

0.57

 

 

(226.3

)%

 

$

0.05

 

 

$

1.67

 

 

(97.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical Trends - Quarterly Financial Data (Unaudited)

(Dollar amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

Profitability for the Quarter:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

26,263

 

$

24,455

 

$

23,453

 

 

$

23,557

 

$

21,208

 

$

19,555

 

$

19,745

 

Interest expense

 

 

14,284

 

 

12,446

 

 

8,984

 

 

 

6,052

 

 

3,516

 

 

2,247

 

 

1,829

 

Net interest income

 

 

11,979

 

 

12,009

 

 

14,469

 

 

 

17,505

 

 

17,692

 

 

17,308

 

 

17,916

 

Provision for (recovery of) credit losses

 

 

(829

)

 

(868

)

 

(774

)

 

 

175

 

 

- -

 

 

- -

 

 

- -

 

Non-interest income (loss)

 

 

(16,815

)

 

685

 

 

566

 

 

 

718

 

 

450

 

 

109

 

 

414

 

Non-interest expenses

 

 

7,660

 

 

7,831

 

 

7,770

 

 

 

7,449

 

 

7,958

 

 

7,681

 

 

8,786

 

Income (loss) before income taxes

 

 

(11,667

)

 

5,731

 

 

8,039

 

 

 

10,599

 

 

10,184

 

 

9,736

 

 

9,544

 

Income tax expense (benefit)

 

 

(1,530

)

 

1,241

 

 

1,735

 

 

 

2,397

 

 

2,139

 

 

1,854

 

 

1,870

 

Net income (loss)

 

$

(10,137

)

$

4,490

 

$

6,304

 

 

$

8,202

 

$

8,045

 

$

7,882

 

$

7,674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Performance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

(1.73

)%

 

0.77

%

 

1.10

%

 

 

1.40

%

 

1.38

%

 

1.41

%

 

1.40

%

Return on average equity (annualized)

 

 

(18.24

)%

 

8.13

%

 

11.83

%

 

 

15.65

%

 

15.07

%

 

15.28

%

 

14.76

%

Net interest margin

 

 

2.08

%

 

2.10

%

 

2.57

%

 

 

3.05

%

 

3.10

%

 

3.16

%

 

3.34

%

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

 

 

(2.86

)%

 

0.12

%

 

0.10

%

 

 

0.12

%

 

0.08

%

 

0.02

%

 

0.08

%

Non-interest expense to average assets (annualized)

 

 

1.30

%

 

1.34

%

 

1.35

%

 

 

1.27

%

 

1.36

%

 

1.38

%

 

1.61

%

Efficiency ratio

 

 

(158.4

)%

 

61.7

%

 

51.7

%

 

 

40.9

%

 

43.9

%

 

44.1

%

 

47.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic

 

$

(0.72

)

$

0.32

 

$

0.45

 

 

$

0.58

 

$

0.57

 

$

0.56

 

$

0.55

 

Earnings (loss) per share - diluted

 

$

(0.72

)

$

0.32

 

$

0.44

 

 

$

0.58

 

$

0.57

 

$

0.56

 

$

0.55

 

Book value per share

 

$

15.61

 

$

15.50

 

$

15.63

 

 

$

15.09

 

$

14.37

 

$

14.80

 

$

14.68

 

Dividends declared per share

 

$

- -

 

$

0.22

 

$

- -

 

 

$

- -

 

$

- -

 

$

- -

 

$

0.20

 

Weighted average common shares (basic)

 

 

14,080,026

 

 

14,077,658

 

 

14,067,047

 

 

 

14,019,429

 

 

13,989,414

 

 

13,932,256

 

 

13,783,034

 

Weighted average common shares (diluted)

 

 

14,080,026

 

 

14,143,253

 

 

14,156,724

 

 

 

14,131,352

 

 

14,108,286

 

 

14,085,160

 

 

13,991,692

 

Common shares outstanding at end of period

 

 

14,126,084

 

 

14,126,138

 

 

14,125,208

 

 

 

14,098,986

 

 

14,070,080

 

 

14,026,589

 

 

13,950,570

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

85

 

$

82

 

$

72

 

 

$

84

 

$

79

 

$

84

 

$

77

 

Bank owned life insurance

 

 

23

 

 

101

 

 

100

 

 

 

99

 

 

255

 

 

95

 

 

95

 

Other service charges and fees

 

 

160

 

 

314

 

 

203

 

 

 

187

 

 

175

 

 

157

 

 

137

 

Losses on securities

 

 

(17,114

)

 

- -

 

 

(202

)

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

Insurance commissions

 

 

54

 

 

50

 

 

206

 

 

 

70

 

 

47

 

 

44

 

 

221

 

Gain on sale of government guaranteed loans

 

 

27

 

 

23

 

 

- -

 

 

 

- -

 

 

- -

 

 

- -

 

 

- -

 

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

 

 

(60

)

 

83

 

 

89

 

 

 

144

 

 

(107

)

 

(274

)

 

(117

)

Other income

 

 

10

 

 

32

 

 

98

 

 

 

134

 

 

1

 

 

3

 

 

1

 

Total non-interest income (loss)

 

$

(16,815

)

$

685

 

$

566

 

 

$

718

 

$

450

 

$

109

 

$

414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

5,052

 

$

4,965

 

$

4,912

 

 

$

4,436

 

$

5,072

 

$

4,655

 

$

6,027

 

Occupancy expense of premises

 

 

445

 

 

448

 

 

470

 

 

 

458

 

 

461

 

 

482

 

 

493

 

Furniture and equipment expenses

 

 

282

 

 

304

 

 

296

 

 

 

336

 

 

323

 

 

341

 

 

325

 

Other expenses

 

 

1,881

 

 

2,114

 

 

2,092

 

 

 

2,219

 

 

2,102

 

 

2,203

 

 

1,941

 

Total non-interest expenses

 

$

7,660

 

$

7,831

 

$

7,770

 

 

$

7,449

 

$

7,958

 

$

7,681

 

$

8,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheets at Quarter End:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, net of unearned income

 

$

1,820,132

 

$

1,769,801

 

$

1,771,272

 

 

$

1,789,508

 

$

1,725,114

 

$

1,692,652

 

$

1,631,260

 

Allowance for loan credit losses

 

 

(20,036

)

 

(20,629

)

 

(21,619

)

 

 

(20,208

)

 

(20,032

)

 

(20,031

)

 

(20,031

)

Investment securities

 

 

272,881

 

 

429,954

 

 

445,785

 

 

 

463,531

 

 

473,478

 

 

473,914

 

 

409,692

 

Interest-earning assets

 

 

2,278,027

 

 

2,315,368

 

 

2,312,404

 

 

 

2,308,055

 

 

2,258,822

 

 

2,274,968

 

 

2,217,553

 

Total assets

 

 

2,298,202

 

 

2,364,250

 

 

2,351,307

 

 

 

2,348,235

 

 

2,305,540

 

 

2,316,374

 

 

2,249,609

 

Total deposits

 

 

1,981,623

 

 

2,046,309

 

 

2,088,642

 

 

 

2,067,740

 

 

2,063,341

 

 

2,043,741

 

 

1,983,099

 

Total interest-bearing liabilities

 

 

1,622,430

 

 

1,691,044

 

 

1,665,837

 

 

 

1,641,167

 

 

1,552,758

 

 

1,581,017

 

 

1,530,133

 

Total shareholders' equity

 

 

220,567

 

 

218,970

 

 

220,823

 

 

 

212,800

 

 

202,212

 

 

207,530

 

 

204,855

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Average Balance Sheets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, net of unearned income

 

$

1,790,720

 

$

1,767,831

 

$

1,772,922

 

 

$

1,759,747

 

$

1,684,796

 

$

1,641,914

 

$

1,620,533

 

Investment securities

 

 

310,407

 

 

441,778

 

 

463,254

 

 

 

468,956

 

 

488,860

 

 

447,688

 

 

376,608

 

Interest-earning assets

 

 

2,301,642

 

 

2,305,050

 

 

2,295,677

 

 

 

2,289,061

 

 

2,277,325

 

 

2,204,709

 

 

2,183,897

 

Total assets

 

 

2,331,403

 

 

2,344,712

 

 

2,334,695

 

 

 

2,330,307

 

 

2,314,825

 

 

2,240,119

 

 

2,216,131

 

Total deposits

 

 

2,012,934

 

 

2,051,702

 

 

2,066,139

 

 

 

2,079,161

 

 

2,057,640

 

 

1,980,231

 

 

1,946,882

 

Total interest-bearing liabilities

 

 

1,660,980

 

 

1,667,597

 

 

1,621,131

 

 

 

1,566,902

 

 

1,547,766

 

 

1,504,574

 

 

1,505,854

 

Total shareholders' equity

 

 

220,473

 

 

221,608

 

 

220,282

 

 

 

207,906

 

 

212,147

 

 

206,967

 

 

210,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average equity to average assets

 

 

9.5

%

 

9.5

%

 

9.4

%

 

 

8.9

%

 

9.2

%

 

9.2

%

 

9.5

%

Investment securities to earning assets

 

 

12.0

%

 

18.6

%

 

19.3

%

 

 

20.1

%

 

21.0

%

 

20.8

%

 

18.5

%

Loans to earning assets

 

 

79.9

%

 

76.4

%

 

76.6

%

 

 

77.5

%

 

76.4

%

 

74.4

%

 

73.6

%

Loans to assets

 

 

79.2

%

 

74.9

%

 

75.3

%

 

 

76.2

%

 

74.8

%

 

73.1

%

 

72.5

%

Loans to deposits

 

 

91.9

%

 

86.5

%

 

84.8

%

 

 

86.5

%

 

83.6

%

 

82.8

%

 

82.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Level):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity / assets

 

 

10.6

%

 

10.2

%

 

10.3

%

 

 

10.0

%

 

9.7

%

 

9.9

%

 

10.2

%

Total risk-based capital ratio

 

 

15.7

%

 

16.1

%

 

16.1

%

 

 

15.6

%

 

15.4

%

 

15.1

%

 

15.4

%

Tier 1 risk-based capital ratio

 

 

14.6

%

 

15.0

%

 

14.9

%

 

 

14.4

%

 

14.3

%

 

14.0

%

 

14.2

%

Common equity tier 1 ratio

 

 

14.6

%

 

15.0

%

 

14.9

%

 

 

14.4

%

 

14.3

%

 

14.0

%

 

14.2

%

Leverage ratio

 

 

11.3

%

 

11.6

%

 

11.5

%

 

 

11.3

%

 

11.0

%

 

11.0

%

 

10.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Marshall Bancorp, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan, Deposit and Borrowing Detail (Unaudited)

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

2022

 

 

 

 

 

 

 

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

 

Commercial business loans

 

$

37,793

 

2.1

%

$

40,156

 

2.3

%

$

41,204

 

2.3

%

 

$

44,788

 

2.5

%

$

44,967

 

2.6

%

$

47,654

 

2.8

%

$

52,569

 

3.2

%

Commercial PPP loans

 

 

132

 

0.0

%

 

133

 

0.0

%

 

135

 

0.0

%

 

 

136

 

0.0

%

 

138

 

0.0

%

 

224

 

0.0

%

 

7,781

 

0.5

%

Commercial owner-occupied real estate loans

 

 

363,017

 

20.0

%

 

360,859

 

20.4

%

 

363,495

 

20.6

%

 

 

366,131

 

20.5

%

 

362,346

 

21.1

%

 

378,457

 

22.4

%

 

339,933

 

20.9

%

Total business loans

 

 

400,942

 

22.1

%

 

401,148

 

22.7

%

 

404,834

 

22.9

%

 

 

411,055

 

23.0

%

 

407,451

 

23.7

%

 

426,335

 

25.2

%

 

400,283

 

24.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor real estate loans

 

 

683,686

 

37.6

%

 

654,623

 

37.0

%

 

660,740

 

37.4

%

 

 

662,769

 

37.1

%

 

622,415

 

36.1

%

 

598,501

 

35.5

%

 

553,093

 

34.0

%

Construction & development loans

 

 

179,570

 

9.9

%

 

179,656

 

10.2

%

 

179,606

 

10.2

%

 

 

195,027

 

11.0

%

 

199,324

 

11.6

%

 

189,644

 

11.2

%

 

219,160

 

13.4

%

Multi-family loans

 

 

86,366

 

4.8

%

 

86,061

 

4.9

%

 

88,670

 

5.0

%

 

 

89,227

 

5.0

%

 

106,460

 

6.2

%

 

106,236

 

6.3

%

 

99,100

 

6.1

%

Total commercial real estate loans

 

 

949,622

 

52.3

%

 

920,340

 

52.1

%

 

929,016

 

52.6

%

 

 

947,023

 

53.1

%

 

928,199

 

53.9

%

 

894,381

 

53.0

%

 

871,353

 

53.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage loans

 

 

464,509

 

25.7

%

 

443,305

 

25.2

%

 

433,076

 

24.5

%

 

 

426,841

 

23.9

%

 

385,696

 

22.4

%

 

368,370

 

21.8

%

 

356,331

 

21.9

%

Consumer loans

 

 

467

 

0.0

%

 

646

 

0.0

%

 

324

 

0.0

%

 

 

529

 

0.0

%

 

585

 

0.0

%

 

651

 

0.0

%

 

513

 

0.0

%

Total loans

 

$

1,815,540

 

100.0

%

$

1,765,439

 

100.0

%

$

1,767,250

 

100.0

%

 

$

1,785,448

 

100.0

%

$

1,721,931

 

100.0

%

$

1,689,737

 

100.0

%

$

1,628,480

 

100.0

%

Less: Allowance for loan credit losses

 

 

(20,036

)

 

 

 

(20,629

)

 

 

 

(21,619

)

 

 

 

 

(20,208

)

 

 

 

(20,032

)

 

 

 

(20,031

)

 

 

 

(20,031

)

 

 

Net deferred loan costs (fees)

 

 

4,592

 

 

 

 

4,362

 

 

 

 

4,022

 

 

 

 

 

4,060

 

 

 

 

3,183

 

 

 

 

2,915

 

 

 

 

2,780

 

 

 

Net loans

 

$

1,800,096

 

 

 

$

1,749,172

 

 

 

$

1,749,653

 

 

 

 

$

1,769,300

 

 

 

$

1,705,082

 

 

 

$

1,672,621

 

 

 

$

1,611,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

2022

 

 

 

 

 

 

 

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

 

Non-interest bearing demand deposits

 

$

437,880

 

22.1

%

$

433,931

 

21.2

%

$

447,450

 

21.4

%

 

$

476,697

 

23.1

%

$

535,186

 

25.9

%

$

512,284

 

25.1

%

$

495,811

 

25.0

%

Interest-bearing demand deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts(1)

 

 

345,522

 

17.4

%

 

311,225

 

15.2

%

 

284,872

 

13.7

%

 

 

253,148

 

12.3

%

 

293,558

 

14.2

%

 

338,789

 

16.6

%

 

345,087

 

17.4

%

Money market accounts(1)

 

 

330,297

 

16.7

%

 

341,413

 

16.7

%

 

392,962

 

18.8

%

 

 

438,797

 

21.2

%

 

412,035

 

20.0

%

 

399,877

 

19.6

%

 

414,987

 

20.9

%

Savings accounts

 

 

57,408

 

3.0

%

 

68,013

 

3.4

%

 

81,150

 

3.9

%

 

 

95,241

 

4.6

%

 

102,909

 

5.0

%

 

112,276

 

5.4

%

 

114,427

 

5.8

%

Certificates of deposit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 or more

 

 

364,805

 

18.4

%

 

376,899

 

18.4

%

 

338,824

 

16.2

%

 

 

314,738

 

15.2

%

 

280,027

 

13.6

%

 

255,411

 

12.5

%

 

241,230

 

12.1

%

Less than $250,000

 

 

103,600

 

5.2

%

 

105,956

 

5.2

%

 

94,429

 

4.5

%

 

 

89,247

 

4.3

%

 

88,421

 

4.3

%

 

87,505

 

4.3

%

 

91,050

 

4.6

%

QwickRate® certificates of deposit

 

 

11,526

 

0.6

%

 

12,772

 

0.6

%

 

16,952

 

0.8

%

 

 

22,163

 

1.1

%

 

20,154

 

1.0

%

 

20,154

 

1.0

%

 

23,136

 

1.2

%

IntraFi® certificates of deposit

 

 

41,659

 

2.1

%

 

49,729

 

2.4

%

 

53,178

 

2.5

%

 

 

25,757

 

1.2

%

 

46,305

 

2.2

%

 

32,686

 

1.6

%

 

39,628

 

2.0

%

Brokered deposits

 

 

288,926

 

14.6

%

 

346,371

 

16.9

%

 

378,825

 

18.2

%

 

 

351,952

 

17.0

%

 

284,746

 

13.8

%

 

284,759

 

13.9

%

 

217,743

 

11.0

%

Total deposits

 

$

1,981,623

 

100.0

%

$

2,046,309

 

100.0

%

$

2,088,642

 

100.0

%

 

$

2,067,740

 

100.0

%

$

2,063,341

 

100.0

%

$

2,043,741

 

100.0

%

$

1,983,099

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased

 

$

- -

 

0.0

%

$

- -

 

0.0

%

$

- -

 

0.0

%

 

$

25,500

 

50.9

%

$

- -

 

0.0

%

$

- -

 

0.0

%

$

- -

 

0.0

%

Federal Home Loan Bank advances

 

 

- -

 

0.0

%

 

- -

 

0.0

%

 

- -

 

0.0

%

 

 

- -

 

0.0

%

 

- -

 

0.0

%

 

- -

 

0.0

%

 

18,000

 

42.0

%

Federal Reserve Bank borrowings

 

 

54,000

 

68.6

%

 

54,000

 

68.6

%

 

- -

 

0.0

 

 

 

- -

 

0.0

%

 

- -

 

0.0

%

 

- -

 

0.0

%

 

- -

 

0.0

%

Subordinated debt

 

 

24,687

 

31.4

%

 

24,666

 

31.4

%

 

24,645

 

100.0

%

 

 

24,624

 

49.1

%

 

24,603

 

100.0

%

 

49,560

 

100.0

%

 

24,845

 

58.0

%

Total borrowings

 

$

78,687

 

100.0

%

$

78,666

 

100.0

%

$

24,645

 

100.0

%

 

$

50,124

 

100.0

%

$

24,603

 

100.0

%

$

49,560

 

100.0

%

$

42,845

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits and borrowings

 

$

2,060,310

 

 

 

$

2,124,975

 

 

 

$

2,113,287

 

 

 

 

$

2,117,864

 

 

 

$

2,087,944

 

 

 

$

2,093,301

 

 

 

$

2,025,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core customer funding sources (2)

 

$

1,681,171

 

82.6

%

$

1,687,166

 

80.3

%

$

1,692,865

 

81.1

%

 

$

1,693,625

 

80.9

%

$

1,758,441

 

85.2

%

$

1,738,828

 

85.1

%

$

1,742,220

 

87.1

%

Wholesale funding sources (3)

 

 

354,452