John Marshall Bancorp, Inc. (OTCQB: JMSB) (the “Company”) reported net income of $9.0 million for the year ended December 31, 2017, an increase of $683 thousand, or 8.2%, as compared to net income of $8.3 million for the year ended December 31, 2016. Net income per diluted share increased during 2017 to $0.66 per share, compared to $0.63 per share during 2016, as adjusted for the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017. The Company achieved record income before income taxes (“pre-tax earnings”) of $16.2 million during 2017, an increase of 31.7%, compared to $12.3 million reported during 2016.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. The new tax law negatively affected net income for the fourth quarter of 2017 and 2017 year-end results. Pursuant to this act, effective January 1, 2018, a permanent reduction in the maximum federal corporate income tax rate occurred reducing the rate to 21%. As a result of the reduction in the corporate income tax rate, the Company was required under generally accepted accounting principles to revalue its net deferred tax asset as of December 31, 2017. Accordingly, the Company recognized a $1.8 million charge, or $0.14 per diluted share, to its net deferred tax asset and a corresponding increase in income tax expense in December 2017.
For the twelve months ended December 31, 2017 the Company produced a 0.80% return on average assets and 7.14% on average equity, compared to 0.85% and 7.27%, respectively during 2016.
For the fourth quarter 2017, the Company reported net income of $1.1 million, a decrease of $1.6 million, as compared to net income of $2.7 million for the three months ended December 31, 2016. The Company achieved record pre-tax earnings of $4.2 million during the fourth quarter of 2017, an increase of $303 thousand or 7.7%, compared to $3.9 million during the same period in 2016. Net income per diluted share was $0.08 per share during the three months ending December 31, 2017, compared to $0.20 per diluted share during the same period in 2016, also adjusted for the 5 for 4 stock split in the form of a 25% dividend paid in 2017. The Company’s three month results produced an annualized return of 0.38% on average assets and 3.40% on average equity, compared to 1.03% and 9.0%, respectively, for the same period a year ago. As of December 31, 2017, the Company’s tangible book value per share was $10.05, up 7.1% compared to $9.38 as of December 31, 2016, as adjusted for the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017.
The Company’s capital ratios remain well above regulatory minimums for well capitalized banks. As of December 31, 2017, the Company’s total risk-based capital ratio was 14.5%, compared to 12.3% at December 31, 2016.
Balance Sheet Review
At December 31, 2017, total assets were $1.17 billion, an increase of $99.1 million, or 9.2%, from total assets of $1.08 billion at December 31, 2016, and an increase of $21.1 million, or 1.8% from $1.15 billion at September 30, 2017. Gross loans increased $112.7 million, or 12.6%, to $1.01 billion at December 31, 2017, compared to $896.0 million at December 31, 2017 and increased $36.9 million, or 3.8%, compared to $971.8 million at September 30, 2017. The Company’s investment portfolio comprised of held-to-maturity and available-for-sale securities was $96.3 million at December 31, 2017, up $3.9 million from $92.4 million at December 31, 2016. As of December 31, 2017, the Company held $41.6 million of its investment portfolio as held-to-maturity, and $54.7 million as available-for-sale. The Company also had restricted securities totaling $8.4 million at December 31, 2017, compared to $7.7 million at September 30, 2017 and $7.9 million at December 31, 2016. At December 31, 2017, the estimated fair value of bank owned life insurance was $19.1 million, compared to $19.0 million at September 30, 2017 and $18.5 million at December 31, 2016.
Total deposits were $896.9 million at December 31, 2017, $897.6 million at September 30, 2017 and $832.9 million at December 31, 2016. Year-over-year deposit growth, from December 31, 2016 to December 31, 2017, was $64.1 million, or 7.7%. Total borrowings, consisting of Federal Home Loan Bank advances, customer repurchase agreements and Federal funds purchased, were $118.5 million at December 31, 2017, $98.0 million at September 30, 2017 and $118.2 million at December 31, 2016.
QwickRate certificates of deposits were $24.7 million at December 31, 2017, $22.2 million at September 30, 2017 and $22.8 million at December 31, 2016. Year-over-year QwickRate certificates of deposits increased $1.9 million from December 31, 2016 to December 31, 2017. CDARs were $77.5 million at December 31, 2017, $86.5 million at September 30, 2017 and $71.8 million at December 31, 2016. Year-over-year CDARS increased $5.7 million. Brokered deposits were $42.4 million at December 31, 2017, $39.5 million at September 30, 2017 and $46.9 million at December 31, 2016. Year-over-year, brokered deposits decreased $4.4 million from December 31, 2016 to December 31, 2017. There were no customer repurchase agreements at December 31, 2017 and September 30, 2017 and $14.2 million at December 31, 2016. During the first quarter of 2017, the Company partnered with Promontory to offer insured cash sweep products (“ICS”). As of December 31, 2017, the Company had $65.3 million in ICS deposits and $56.4 million as of September 30, 2017. The decline in the customer repurchase agreements were part of an initiative and were mostly moved into ICS. Federal Home Loan Bank advances were $108.5 million at December 31, 2017, $98.0 million at September 30, 2017 and $104.0 million at December 31, 2016. Year-over-year Federal Home Loan Bank advances increased $4.5 million or 4.3%. Core customer funding was $829.8 million at December 31, 2017, $835.9 million at September 30, 2017 and $777.3 million at December 31, 2016. Year-over-year core customer funding sources, which include deposits, customer repurchase agreements, ICS and CDARS, increased by $52.4 million, or 6.7%, from December 31, 2016 to December 31, 2017.
Total shareholders’ equity was $128.9 million at December 31, 2017, $127.8 million at September 30, 2017 and $118.8 million at December 31, 2016. Year-over-year shareholders’ equity increased by $10.1 million, or 9.2%. Total common shares outstanding increased from 10,137,149 at December 31, 2016 to 12,824,233, including 85,007 unvested shares, at December 31, 2017. The majority of the increase in shares year-over-year was related to the 5 for 4 stock split in the form of a 25% dividend paid September 5, 2017.
The Company completed a private placement of $25.0 million of fixed-to-floating subordinated notes on July 6, 2017. Unless redeemed earlier, the notes will mature on July 15, 2027. The notes bear a fixed rate of 5.75% for the first five years and will bear a floating rate equal to three-month LIBOR plus 388 basis points thereafter. The notes qualify as Tier 2 capital for the Company for regulatory purposes. The notes are carried at their principal amount, less unamortized issuance costs. The balance was $24.5 million at December 31, 2017 and September 30, 2017.
Income Statement Review
Net interest income
Net interest income, the Company’s primary source of revenue, was $40.5 million for the year ended December 31, 2017, up 12.2% from $36.1 million for the year ended December 31, 2016, The net interest margin was 3.72% for the year ended December 31, 2017 as compared to 3.79% for the year ended December 31, 2016. Net interest income was $10.6 million for the fourth quarter of 2017, compared to $9.5 million for the same period in 2016. The net interest margin was 3.68% for the fourth quarter of 2017, compared to 3.77% during the fourth quarter of 2016. The Federal Reserve increased rates by 25 basis points in December 2016, March 2017 and June 2017. The yield on average net loans increased 5 basis points year-over-year from December 31, 2016 to December 31, 2017. The average cost of interest bearing liabilities increased 21 basis points year-over-year from December 31, 2016 to December 31, 2017. The increase in cost of liabilities during 2017 was related to higher cost term funding and interest expense related to the Company’s issuance of subordinated debt.
Despite the decline in the net interest margin over the past year, net interest income increased by 12.2% during 2017, compared to 2016, resulting primarily from a $137.1 million, or 14.4%, increase in average earning assets from December 31, 2017, compared to December 31, 2016.
Provision for loan losses
The Company recognized a provision for loan losses of $1.4 million for the year ended December 31, 2017, compared to provision of $3.8 million for the year ended December 31, 2016. The Company reported net loan charge-offs of $655 thousand in 2017, compared to net loan charge-offs of $2.7 million in 2016.
The Company’s provision for loan losses was $235 thousand during the fourth quarter of 2017, compared to $480 thousand during the fourth quarter of 2016. In addition, the Company reported net loan charge-offs of $324 thousand during the fourth quarter of 2017, compared to $77 thousand in the same period in 2016.
Noninterest income
The Company’s noninterest income consists primarily of bank owned life insurance income and service charges on deposit accounts. Loan fees are included in interest income on the loan portfolio and not reported as noninterest income.
For the year ended December 31, 2017, the Company reported total noninterest income of $1.2 million, compared to $1.0 million during the year ended December 31, 2016, an increase of 19.3%. For the three months ended December 31, 2017, the Company’s noninterest income was $266 thousand, compared to $286 thousand during the same period in 2016. The year-over-year decrease for the three months ended December 31, 2017 was related to lower bank owned life insurance income. The year-over-year increase for the twelve months ended December 31, 2017 was primarily attributable to gains on sales of securities during the first half of 2017 and fees related to loans moving from non-accrual to accruing that were collected in 2017 but were from prior years.
Noninterest expense
The largest component of the Company’s noninterest expense is employee salaries and benefits. Salaries and benefits expense increased by 18.1% during 2017 to $14.8 million, compared to $12.5 million during 2016. All other noninterest expense increased by $876 thousand during 2017, from $8.4 million in 2016 to $9.3 million in 2017, an increase of 10.4%. During 2017, 14 additional full time equivalent employees were hired.
For the three months ended December 31, 2017, salaries and employee benefits expense increased 19.4% to $4.0 million, compared to $3.3 million for the same period in 2016. All other noninterest expenses totaled $2.4 million during the fourth quarter of 2017, an increase of 15.5% compared to $2.1 million reported for the same period in 2016.
The increase in salaries and benefits is related to additional staff needed to support the overall growth of the Company. The increase in other operating expenses was mostly related to one-time expenses related to the formation of the Holding Company in March 2017, expensed related to other real estate owned, additional rent and furniture expense related to the new loan production office in Arlington, VA as well as higher FDIC insurance and franchise tax related to growth.
Asset Quality Review
As of December 31, 2017, non-performing assets were 0.09% of total assets, compared to 0.01% at December 31, 2016. The Company’s allowance for loan losses covered non-performing loans by 14.0 times as of December 31, 2017, compared to 149.1 times as of December 31, 2016. As of December 31, 2017, non-accrual loans totaled $639 thousand, of which $539 thousand represented four loans to one customer relationship and were put on non-accrual earlier this year. These loans are secured by real estate and have a specific reserve less than $1 thousand as of December 31, 2017. As of December 31, 2017, there were $1.2 million in loans 30-89 days past due and still accruing interest. As of December 31, 2016, there were $1.0 million in loans 30-89 days past due and still accruing interest.
Troubled debt restructurings were $495 thousand at December 31, 2017, a decrease of $13 thousand, or 2.6%, from $508 thousand at December 31, 2016. All troubled debt restructurings were performing in accordance with modified terms as of December 31, 2017. The Company had $379 thousand in other real estate owned as of December 31, 2017 and no other real estate owned as of December 31, 2016.
John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. John Marshall Bank is headquartered in Reston, Virginia and has five full-service branches located in Reston, Leesburg, Arlington, Alexandria and Rockville. The Bank also has a limited-service commercial branch located in Washington, DC, a loan production office located in Tysons Corner, VA and a loan production office located in Arlington, VA. Further information on the Bank can be obtained by visiting its website at www.johnmarshallbank.com.
This press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance.
| 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 | ||||||||||||
| 2017 | 2017 | 2016 | Months | Year | ||||||||||||
| Assets | (Unaudited) | (Unaudited) | ||||||||||||||
| Cash and due from banks | $ | 7,256 | $ | 5,684 | $ | 4,898 | 27.7% | 48.1% | ||||||||
| Federal funds sold | 40 | 56 | 60 | -28.6% | -33.3% | |||||||||||
| Interest-bearing deposits in banks | 30,873 | 46,512 | 49,717 | -33.6% | -37.9% | |||||||||||
| Securities available-for-sale, at fair value | 54,699 | 53,197 | 48,312 | 2.8% | 13.2% | |||||||||||
Securities held-to-maturity, fair value of $41,500 at 12/31/2017, $43,618 at 9/30/2017 and $44,067 at 12/31/2016 | 41,570 | 43,427 | 44,073 | -4.3% | -5.7% | |||||||||||
| Restricted securities, at cost | 8,447 | 7,695 | 7,873 | 9.8% | 7.3% | |||||||||||
Loans, net of allowance for loan losses of $8,927 at 12/31/2017, $9,017 at 9/30/2017 and $8,202 at 12/31/2016 | 997,945 | 960,832 | 886,220 | 3.9% | 12.6% | |||||||||||
| Bank premises and equipment, net | 2,480 | 2,543 | 2,471 | -2.5% | 0.4% | |||||||||||
| Accrued interest receivable | 3,263 | 3,043 | 2,988 | 7.2% | 9.2% | |||||||||||
| Bank owned life insurance | 19,093 | 18,955 | 18,540 | 0.7% | 3.0% | |||||||||||
| Other real estate owned | 379 | 392 | - - | -3.3% | N/M | |||||||||||
| Other assets | 8,394 | 10,979 | 10,205 | -23.5% | -17.7% | |||||||||||
| Total assets | $ | 1,174,439 | $ | 1,153,315 | $ | 1,075,357 | 1.8% | 9.2% | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Non-interest bearing demand deposits | $ | 174,686 | $ | 177,226 | $ | 195,065 | -1.4% | -10.4% | ||||||||
| Interest bearing demand deposits | 258,306 | 260,211 | 211,495 | -0.7% | 22.1% | |||||||||||
| Savings deposits | 6,709 | 7,043 | 6,856 | -4.7% | -2.1% | |||||||||||
| Time deposits | 457,240 | 453,103 | 419,449 | 0.9% | 9.0% | |||||||||||
| Total deposits | 896,941 | 897,583 | 832,865 | -0.1% | 7.7% | |||||||||||
| Federal funds purchased | 10,001 | - - | - - | N/M | N/M | |||||||||||
| Repurchase agreements | - - | - - | 14,206 | N/M | N/M | |||||||||||
| Federal Home Loan Bank advances | 108,500 | 98,000 | 104,000 | 10.7% | 4.3% | |||||||||||
| Subordinated Debt | 24,531 | 24,519 | - - | 0.0% | N/M | |||||||||||
| Accrued interest payable | 996 | 633 | 220 | 57.3% | 352.7% | |||||||||||
| Other liabilities | 4,603 | 4,802 | 5,271 | -4.1% | -12.7% | |||||||||||
| Total liabilities | 1,045,572 | 1,025,537 | 956,562 | 2.0% | 9.3% | |||||||||||
| Shareholders' Equity | ||||||||||||||||
Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued | - - | - - | - - | - - | - - | |||||||||||
Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued | - - | - - | - - | - - | - - | |||||||||||
Common stock, voting, par value $0.01 per share at 12/31/17 and 9/30/17; par value $5 per share at 12/31/16; authorized 20,000,000 shares; issued and outstanding, 12,824,233 at 12/31/2017 including 85,007 unvested shares, 12,824,047 shares at 9/30/2017 including 85,269 unvested shares and 10,137,149 at 12/31/16 | 127 | 127 | 50,686 | 0.0% | -99.7% | |||||||||||
| Additional paid-in capital | 83,867 | 83,670 | 32,112 | 0.2% | 161.2% | |||||||||||
| Retained earnings | 45,432 | 44,313 | 36,454 | 2.5% | 24.6% | |||||||||||
| Accumulated other comprehensive loss | (559 | ) | (332 | ) | (457 | ) | -68.4% | -22.3% | ||||||||
| Total shareholders' equity | 128,867 | 127,778 | 118,795 | 0.9% | 8.5% | |||||||||||
| Total liabilities and shareholders' equity | $ | 1,174,439 | $ | 1,153,315 | $ | 1,075,357 | 1.8% | 9.2% | ||||||||
| John Marshall Bancorp, Inc. | ||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | % Change | 2017 | 2016 | % Change | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Interest and Dividend Income | ||||||||||||||||
| Interest and fees on loans | $ | 12,456 | $ | 10,617 | 17.3% | $ | 46,667 | $ | 40,250 | 15.9% | ||||||
| Interest on investment securities, taxable | 392 | 398 | -1.5% | 1,445 | 1,432 | 0.9% | ||||||||||
| Interest on investment securities, tax-exempt | 85 | 50 | 70.0% | 269 | 170 | 58.2% | ||||||||||
| Dividends | 108 | 93 | 15.8% | 417 | 341 | 22.3% | ||||||||||
| Interest on deposits in banks | 170 | 47 | 261.7% | 520 | 168 | 209.5% | ||||||||||
| Total interest and dividend income | 13,211 | 11,205 | 17.9% | 49,318 | 42,361 | 16.4% | ||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 1,924 | 1,407 | 36.7% | 6,752 | 5,411 | 24.8% | ||||||||||
| Federal Home Loan Bank advances | 324 | 245 | 32.2% | 1,300 | 784 | 65.8% | ||||||||||
| Subordinated debt | 372 | - - | N/M | 719 | - - | N/M | ||||||||||
| Other short-term borrowings | 1 | 12 | -91.7% | 22 | 60 | -63.3% | ||||||||||
| Total interest expense | 2,621 | 1,664 | 57.5% | 8,793 | 6,255 | 40.6% | ||||||||||
| Net interest income | 10,590 | 9,541 | 11.0% | 40,525 | 36,106 | 12.2% | ||||||||||
| Provision for loan losses | 235 | 480 | -51.0% | 1,380 | 3,810 | -63.8% | ||||||||||
| Net interest income after provision for loan losses | 10,355 | 9,061 | 14.3% | 39,145 | 32,296 | 21.2% | ||||||||||
| Noninterest Income | ||||||||||||||||
| Service charges on deposit accounts | 101 | 94 | 7.4% | 383 | 401 | -4.5% | ||||||||||
| Bank owned life insurance | 137 | 163 | -16.0% | 553 | 540 | 2.4% | ||||||||||
| Other service charges and fees | 28 | 29 | -3.4% | 105 | 77 | 36.4% | ||||||||||
| Gain on sale of securities | - - | - - | N/M | 134 | - - | N/M | ||||||||||
| Gain on sale of fixed assets | - - | - - | N/M | 1 | - - | N/M | ||||||||||
| Other operating income | - - | - - | N/M | 53 | 6 | 783.3% | ||||||||||
| Total noninterest income | 266 | 286 | -7.0% | 1,229 | 1,024 | 20.0% | ||||||||||
| Noninterest Expenses | ||||||||||||||||
| Salaries and employee benefits | 3,992 | 3,344 | 19.4% | 14,820 | 12,548 | 18.1% | ||||||||||
| Occupancy expense of premises | 499 | 417 | 19.7% | 1,843 | 1,678 | 9.8% | ||||||||||
| Furniture and equipment expenses | 315 | 286 | 10.1% | 1,183 | 1,228 | -3.7% | ||||||||||
| Other real estate owned, net | 20 | - - | N/M | 20 | 1 | 1900.0% | ||||||||||
| Other operating expenses | 1,572 | 1,380 | 13.9% | 6,260 | 5,523 | 13.3% | ||||||||||
| Total noninterest expenses | 6,398 | 5,427 | 17.9% | 24,126 | 20,978 | 15.0% | ||||||||||
| Income before income taxes | 4,223 | 3,920 | 7.7% | 16,248 | 12,342 | 31.6% | ||||||||||
| Income tax expense | 3,105 | 1,218 | 154.9% | 7,264 | 4,041 | 79.8% | ||||||||||
| Net income | $ | 1,118 | $ | 2,702 | -58.6% | $ | 8,984 | $ | 8,301 | 8.2% | ||||||
| Earnings Per Common Share (1) | ||||||||||||||||
| Basic | $ | 0.09 | $ | 0.21 | -57.1% | $ | 0.70 | $ | 0.66 | 6.1% | ||||||
| Diluted | $ | 0.08 | $ | 0.20 | -60.0% | $ | 0.66 | $ | 0.63 | 4.8% | ||||||
(1) | Per share amounts for all periods have been adjusted to reflect a 5 for 4 stock split in the form of a 25% stock dividend paid September 5, 2017. | |
| John Marshall Bancorp, Inc. | |||||||||||||||||||||||||
| Loan, Deposit and Borrowing Detail (Unaudited) | |||||||||||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||||||||||
| December 31, 2017 | September 30, 2017 | December 31, 2016 | Percentage Change | ||||||||||||||||||||||
| Loans | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 3 Mos | Last 12 Mos | |||||||||||||||||
| Mortgage loans on real estate | |||||||||||||||||||||||||
| Commercial | $ | 577,016 | 57.1 | % | $ | 543,865 | 56.0 | % | $ | 519,857 | 58.0 | % | 6.1% | 11.0% | |||||||||||
| Construction and land development | 218,538 | 21.7 | % | 217,334 | 22.3 | % | 180,318 | 20.1 | % | 0.6% | 21.2% | ||||||||||||||
| Residential | 135,791 | 13.5 | % | 131,233 | 13.5 | % | 107,534 | 12.0 | % | 3.5% | 26.3% | ||||||||||||||
| Total mortgage loans on real estate | $ | 931,345 | 92.3 | % | $ | 892,432 | 91.8 | % | $ | 807,709 | 90.1 | % | 4.4% | 15.3% | |||||||||||
| Commercial loans | 76,573 | 7.6 | % | 78,302 | 8.1 | % | 86,498 | 9.7 | % | -2.2% | -11.5% | ||||||||||||||
| Consumer loans | 777 | 0.1 | % | 1,096 | 0.1 | % | 1,820 | 0.2 | % | -29.1% | -57.3% | ||||||||||||||
| Total loans | $ | 1,008,695 | 100.0 | % | $ | 971,830 | 100.0 | % | $ | 896,027 | 100.0 | % | 3.8% | 12.6% | |||||||||||
| Less: Allowance for loan losses | (8,927 | ) | (9,017 | ) | (8,202 | ) | |||||||||||||||||||
| Net deferred loan fees | (1,823 | ) | (1,981 | ) | (1,605 | ) | |||||||||||||||||||
| Net loans | $ | 997,945 | $ | 960,832 | $ | 886,220 | |||||||||||||||||||
| December 31, 2017 | September 30, 2017 | December 31, 2016 | Percentage Change | ||||||||||||||||||||||
| Deposits | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 3 Mos | Last 12 Mos | |||||||||||||||||
| Noninterest-bearing demand deposits | $ | 174,686 | 19.5 | % | $ | 177,226 | 19.7 | % | $ | 195,065 | 23.4 | % | -1.4% | -10.4% | |||||||||||
| Interest-bearing demand deposits: | |||||||||||||||||||||||||
| NOW accounts | 33,505 | 3.7 | % | 41,736 | 4.7 | % | 12,739 | 1.5 | % | -19.7% | 163.0% | ||||||||||||||
| Money market accounts | 159,508 | 17.8 | % | 155,340 | 17.3 | % | 187,748 | 22.6 | % | 2.7% | -15.0% | ||||||||||||||
| Savings accounts | 6,709 | 0.8 | % | 7,043 | 0.8 | % | 6,856 | 0.8 | % | -4.7% | -2.1% | ||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||
| $250,000 or more | 199,161 | 22.2 | % | 198,362 | 22.1 | % | 187,568 | 22.5 | % | 0.4% | 6.2% | ||||||||||||||
| Less than $250,000 | 113,374 | 12.6 | % | 113,348 | 12.6 | % | 101,368 | 12.2 | % | 0.0% | 11.8% | ||||||||||||||
| QwickRate® Certificates of deposit | 24,735 | 2.8 | % | 22,185 | 2.5 | % | 22,844 | 2.8 | % | 11.5% | 8.3% | ||||||||||||||
| ICS® | 65,293 | 7.3 | % | 56,402 | 6.3 | % | - | 0.0 | % | 15.8% | N/M | ||||||||||||||
| CDARS® | 77,531 | 8.6 | % | 86,469 | 9.6 | % | 71,799 | 8.6 | % | -10.3% | 8.0% | ||||||||||||||
| Brokered deposits | 42,439 | 4.7 | % | 39,472 | 4.4 | % | 46,878 | 5.6 | % | 7.5% | -9.5% | ||||||||||||||
| Total deposits | $ | 896,941 | 100.0 | % | $ | 897,583 | 100.0 | % | $ | 832,865 | 100.0 | % | -0.1% | 7.7% | |||||||||||
| Borrowings | |||||||||||||||||||||||||
| Federal funds purchased | $ | 10,001 | 7.0 | % | $ | - | 0.0 | % | $ | - | 0.0 | % | N/M | N/M | |||||||||||
| Customer repurchase agreements | - | 0.0 | % | - | 0.0 | % | 14,206 | 12.0 | % | N/M | -100.0% | ||||||||||||||
| Federal Home Loan Bank advances | 108,500 | 75.9 | % | 98,000 | 80.0 | % | 104,000 | 88.0 | % | 10.7% | 4.3% | ||||||||||||||
| Subordinated debt | 24,531 | 17.1 | % | 24,519 | 20.0 | % | - | 0.0 | % | 0.0% | N/M | ||||||||||||||
| Total borrowings | $ | 143,032 | 100.0 | % | $ | 122,519 | 100.0 | % | $ | 118,206 | 100.0 | % | 16.7% | 21.0% | |||||||||||
| Total deposits and borrowings | $ | 1,039,973 | $ | 1,020,102 | $ | 951,071 | 1.9% | 9.3% | |||||||||||||||||
| Core customer funding sources (1) | $ | 829,767 | 79.8 | % | $ | 835,926 | 81.9 | % | $ | 777,349 | 81.7 | % | -0.7% | 6.7% | |||||||||||
| Wholesale funding sources (2) | 185,675 | 17.8 | % | 159,657 | 15.7 | % | 173,722 | 18.3 | % | 16.3% | 6.9% | ||||||||||||||
| Subordinated debt (3) | 24,531 | 2.4 | % | 24,519 | 2.4 | % | - | 0.0 | % | 0.0% | N/M | ||||||||||||||
| Total funding sources | $ | 1,039,973 | 99.9 | % | $ | 1,020,102 | 100.0 | % | $ | 951,071 | 100.0 | % | 2.0% | 9.4% | |||||||||||
| (1) | Includes ICS and CDARS(r), which are all reciprocal deposits maintained by customers, and repurchase agreements, which represent sweep accounts tied to customer operating accounts. | |
| (2) | Consists of QwickRate(r) certificates of deposit, brokered deposits, federal funds purchased and Federal Home Loan Bank advances. | |
| (3) | Subordinated debt obligation qualifies as Tier 2 capital. | |
| John Marshall Bancorp, Inc. | ||||||||||||||||||
| Average Balance Sheets, Interest and Rates (unaudited) | ||||||||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||||
| Three Months Ended December 31, 2017 | Three Months Ended December 31 2016 | |||||||||||||||||
| Interest | Average | Interest | Average | |||||||||||||||
| Average | Income- | Yields | Average | Income- | Yields | |||||||||||||
| Balance | Expense | /Rates | Balance | Expense | /Rates | |||||||||||||
| Assets | ||||||||||||||||||
| Securities | $ | 104,081 | $ | 585 | 2.23 | % | $ | 100,732 | $ | 541 | 2.14 | % | ||||||
| Loans, net of unearned income | 987,726 | 12,456 | 5.00 | % | 871,311 | 10,617 | 4.85 | % | ||||||||||
| Interest-bearing deposits in other banks | 49,537 | 170 | 1.36 | % | 35,099 | 47 | 0.53 | % | ||||||||||
| Federal funds sold | 59 | - | 0.00 | % | 46 | - | 0.00 | % | ||||||||||
| Total interest-earning assets | $ | 1,141,403 | $ | 13,211 | 4.59 | % | $ | 1,007,188 | $ | 11,205 | 4.43 | % | ||||||
| Other assets | 33,469 | 31,887 | ||||||||||||||||
| Total assets | $ | 1,174,872 | $ | 1,039,075 | ||||||||||||||
| Liabilities & Shareholders' equity | ||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||
| NOW accounts | $ | 72,977 | $ | 73 | 0.40 | % | $ | 13,353 | $ | 13 | 0.39 | % | ||||||
| Money market accounts | 204,952 | 338 | 0.65 | % | 207,008 | 245 | 0.47 | % | ||||||||||
| Savings accounts | 7,482 | 4 | 0.21 | % | 6,457 | 4 | 0.25 | % | ||||||||||
| Time deposits | 451,037 | 1,509 | 1.33 | % | 408,648 | 1,145 | 1.11 | % | ||||||||||
| Total interest-bearing deposits | $ | 736,448 | $ | 1,924 | 1.04 | % | $ | 635,466 | $ | 1,407 | 0.88 | % | ||||||
Securities sold under agreement to repurchase and federal funds purchased | $ | 335 | $ | 1 | 1.18 | % | $ | 13,644 | $ | 12 | 0.35 | % | ||||||
| Subordinated debt | 24,523 | 372 | 6.02 | % | - | - | 0.00 | % | ||||||||||
| Other borrowed funds | 96,201 | 324 | 1.34 | % | 90,207 | 245 | 1.08 | % | ||||||||||
| Total interest-bearing liabilities | $ | 857,507 | $ | 2,621 | 1.21 | % | $ | 739,317 | $ | 1,664 | 0.90 | % | ||||||
| Demand deposits and other liabilities | 186,919 | 181,472 | ||||||||||||||||
| Total liabilities | $ | 1,044,426 | $ | 920,789 | ||||||||||||||
| Shareholders' equity | 130,446 | 118,286 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,174,872 | $ | 1,039,075 | ||||||||||||||
| Interest rate spread | 3.38 | % | 3.53 | % | ||||||||||||||
| Net interest income and margin | $ | 10,590 | 3.68 | % | $ | 9,541 | 3.77 | % | ||||||||||
| Twelve Months Ended December 31, 2017 | Twelve Months Ended December 31, 2016 | |||||||||||||||||
| Interest | Average | Interest | Average | |||||||||||||||
| Average | Income- | Yields | Average | Income- | Yields | |||||||||||||
| Balance | Expense | /Rates | Balance | Expense | /Rates | |||||||||||||
| Assets | ||||||||||||||||||
| Securities | $ | 98,170 | $ | 2,131 | 2.17 | % | $ | 94,518 | $ | 1,943 | 2.06 | % | ||||||
| Loans, net of unearned income | 947,287 | 46,667 | 4.93 | % | 824,830 | 40,250 | 4.88 | % | ||||||||||
| Interest-bearing deposits in other banks | 43,662 | 520 | 1.19 | % | 32,714 | 168 | 0.51 | % | ||||||||||
| Federal funds sold | 58 | - | 0.00 | % | 16 | - | 0.00 | % | ||||||||||
| Total interest-earning assets | $ | 1,089,177 | $ | 49,318 | 4.53 | % | $ | 952,078 | $ | 42,361 | 4.45 | % | ||||||
| Other assets | 32,839 | 27,991 | ||||||||||||||||
| Total assets | $ | 1,122,016 | $ | 980,069 | ||||||||||||||
| Liabilities & Shareholders' equity | ||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||
| NOW accounts | $ | 44,269 | $ | 181 | 0.41 | % | $ | 15,528 | $ | 61 | 0.39 | % | ||||||
| Money market accounts | 201,501 | 1,181 | 0.59 | % | 213,766 | 1,081 | 0.51 | % | ||||||||||
| Savings accounts | 7,250 | 17 | 0.23 | % | 9,671 | 40 | 0.41 | % | ||||||||||
| Time deposits | 435,923 | 5,373 | 1.23 | % | 378,109 | 4,229 | 1.12 | % | ||||||||||
| Total interest-bearing deposits | $ | 688,943 | $ | 6,752 | 0.98 | % | $ | 617,074 | $ | 5,411 | 0.88 | % | ||||||
Securities sold under agreement to repurchase and federal funds purchased | $ | 4,997 | $ | 22 | 0.44 | % | $ | 14,769 | $ | 60 | 0.41 | % | ||||||
| Subordinated debt | 12,026 | 719 | 5.98 | % | - | - | 0.00 | % | ||||||||||
| Other borrowed funds | 103,095 | 1,300 | 1.26 | % | 75,995 | 784 | 1.03 | % | ||||||||||
| Total interest-bearing liabilities | $ | 809,061 | $ | 8,793 | 1.09 | % | $ | 707,838 | $ | 6,255 | 0.88 | % | ||||||
| Demand deposits and other liabilities | 187,197 | 158,032 | ||||||||||||||||
| Total liabilities | $ | 996,258 | $ | 865,870 | ||||||||||||||
| Shareholders' equity | 125,758 | 114,199 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,122,016 | $ | 980,069 | ||||||||||||||
| Interest rate spread | 3.44 | % | 3.57 | % | ||||||||||||||
| Net interest income and margin | $ | 40,525 | 3.72 | % | $ | 36,106 | 3.79 | % | ||||||||||
| John Marshall Bancorp, Inc. | ||||||||||||||||
| Financial Highlights (Unaudited) | ||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||
| At or For the Three Months Ended | At or For the Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Per share Data and Shares Outstanding(1) | ||||||||||||||||
| Earnings per common share - basic | $ | 0.09 | $ | 0.21 | $ | 0.70 | $ | 0.66 | ||||||||
| Earnings per common share - diluted | $ | 0.08 | $ | 0.20 | $ | 0.66 | $ | 0.63 | ||||||||
| Tangible book value per share | $ | 10.05 | $ | 9.38 | $ | 10.05 | $ | 9.38 | ||||||||
| Weighted average common shares (basic) | 12,738,895 | 12,667,249 | 12,715,999 | 12,586,921 | ||||||||||||
| Weighted average common shares (diluted) | 13,498,593 | 13,283,426 | 13,486,450 | 13,202,296 | ||||||||||||
| Common shares outstanding at end of period | 12,824,233 | 12,671,436 | 12,824,233 | 12,671,436 | ||||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average assets (annualized) | 0.38 | % | 1.03 | % | 0.80 | % | 0.85 | % | ||||||||
| Return on average equity (annualized) | 3.40 | % | 9.09 | % | 7.14 | % | 7.27 | % | ||||||||
| Yield on earning assets (annualized) | 4.59 | % | 4.43 | % | 4.53 | % | 4.45 | % | ||||||||
| Cost of interest bearing liabilities (annualized) | 1.21 | % | 0.88 | % | 1.09 | % | 0.88 | % | ||||||||
| Net interest spread | 3.38 | % | 3.53 | % | 3.44 | % | 3.57 | % | ||||||||
| Net interest margin | 3.68 | % | 3.77 | % | 3.72 | % | 3.79 | % | ||||||||
| Noninterest income as a percentage of average assets (annualized) | 0.09 | % | 0.11 | % | 0.11 | % | 0.10 | % | ||||||||
| Noninterest expense to average assets (annualized) | 2.16 | % | 2.08 | % | 2.15 | % | 2.14 | % | ||||||||
| Efficiency ratio | 58.9 | % | 55.2 | % | 57.8 | % | 56.5 | % | ||||||||
| Asset Quality | ||||||||||||||||
| Loans 30-89 days past due and accruing interest | $ | 1,189 | $ | 1,008 | $ | 1,189 | $ | 1,008 | ||||||||
| Non-accrual loans | $ | 639 | $ | 55 | $ | 639 | $ | 55 | ||||||||
| Other real estate owned | $ | 379 | $ | - | $ | 379 | $ | - | ||||||||
| Non-performing assets (2) | $ | 1,018 | $ | 55 | $ | 1,018 | $ | 55 | ||||||||
| Non-performing assets to total assets | 0.09 | % | 0.01 | % | 0.09 | % | 0.01 | % | ||||||||
| Allowance for loan losses to total loans | 0.89 | % | 0.92 | % | 0.89 | % | 0.92 | % | ||||||||
| Allowance for loan losses to non-performing loans | 14.0 | 149.1 | 14.0 | 149.1 | ||||||||||||
| Net loan chargeoffs | $ | 324 | $ | 77 | $ | 655 | $ | 2,738 | ||||||||
| Net charge-offs to average loans (annualized) | 0.13 | % | 0.04 | % | 0.07 | % | 0.29 | % | ||||||||
| Troubled debt restructurings (total) | $ | 495 | $ | 508 | $ | 495 | $ | 508 | ||||||||
| Performing in accordance with modified terms | $ | 495 | $ | 508 | $ | 495 | $ | 508 | ||||||||
| Not performing in accordance with modified terms | $ | - | $ | - | $ | - | $ | - | ||||||||
| Regulatory Capital Ratios | ||||||||||||||||
| Total risk-based capital ratio | 14.5 | % | 12.3 | % | 14.5 | % | 12.3 | % | ||||||||
| Tier 1 risk-based capital ratio | 11.5 | % | 11.5 | % | 11.5 | % | 11.5 | % | ||||||||
| Leverage ratio | 11.5 | % | 11.5 | % | 11.5 | % | 11.5 | % | ||||||||
| Common equity tier 1 ratio | 11.0 | % | 11.5 | % | 0.0 | % | 11.5 | % | ||||||||
| Other Information | ||||||||||||||||
| Effective income tax rate | 73.5 | % | 31.1 | % | 44.7 | % | 32.7 | % | ||||||||
| Tangible equity / tangible assets | 11.0 | % | 11.0 | % | 11.0 | % | 11.0 | % | ||||||||
| Average tangible equity / average tangible assets | 11.1 | % | 11.4 | % | 11.2 | % | 11.7 | % | ||||||||
| Number of full time equivalent employees | 125 | 111 | 125 | 111 | ||||||||||||
| # Full service branch offices | 5 | 5 | 5 | 5 | ||||||||||||
| # Loan production or limited service branch offices | 3 | 2 | 3 | 2 | ||||||||||||
| (1) | Shares and per share amounts for all periods have been adjusted to reflect a 5 for 4 stock split in the form of a 25% stock dividend paid September 5, 2017. | |
| (2) | Non-performing assets consist of non-accrual loans, loans 90 day or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings ("TDRs") which were accruing interest at the date indicated. | |
| (3) | Effective tax rates for the quarter and year-to-date periods ending December 31, 2017 are not comparable to the same periods in 2016 due to the income tax expense of $1.8 million recognized in conjunction with the tax reform and the revaluation of the Company's net deferred tax asset during the fourth quarter of 2017. | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180130005968/en/
Contacts:
John R. Maxwell, 703-584-0840
