John Marshall Bancorp, Inc. (OTCQB: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”) reported its financial results for the three and nine months ended September 30, 2018.
Selected Highlights
- Record Quarterly Asset Growth - Total assets surpassed $1.32 billion at September 30, 2018, an increase of $94.9 million or 30.7% (annualized) since June 30, 2018. Total Assets increased $148.0 million or 12.6% since December 31, 2017 and $169.7 million or 14.7% from a year ago.
- Record Quarterly Loan Growth - Gross loans exceeded $1.11 billion at September 30, 2018. Net Loans surpassed $1.10 billion at September 30, 2018. Net Loans increased $67.7 million or 26.1% (annualized) since June 30, 2018. Net loans increased $99.2 million or 9.9% since December 31, 2017 and $136.3 million or 14.2% from a year ago.
- Record Quarterly Deposit Growth - Total deposits topped $1.09 billion at September 30, 2018, an increase of $112.2 million or 45.7% (annualized) since June 30, 2018. Total Deposits increased $189.7 or 21.2% since December 31, 2017 and $189.1 million or 21.1% from a year ago.
- Improved Funding Composition - Non-interest bearing deposits grew $11.3 million or 21.8% (annualized) during the third quarter and represent 21.6% of core customer funding compared to 21.1% at December 31, 2017 and 21.2% a year ago. In addition, wholesale funding decreased $9.9 million or 6.3% during the quarter. Wholesale funding represents 12.5% of total funding sources at September 30, 2018 compared to 17.1% at December 31, 2017 and 15.7% at September 30, 2017.
- Excellent Asset Quality – Non-performing assets represented 0.07% of total assets and non-performing loans were 0.05% of total loans as of September 30, 2018. There were no charge-offs during the third quarter of 2018 and only $86 thousand in charge-offs, or 0.01% of loans for the nine month period ended September 30, 2018.
- Record Quarterly Net Interest Income – The Company reported Net Interest Income of $10.9 million for the 3rd quarter of 2018; also a record. On a year-to-date basis, total funding sources growth has exceeded Net Loan growth by $41.1 million. The Company anticipates that interest income will improve as the balances in interest-bearing deposits in banks are deployed to fund higher yielding loans.
- Increased Earnings – Net income totaled $2.8 million or $0.21
per diluted share for the three months ended September 30, 2018. This
compares to $2.7 million or $0.19 per diluted share for the three
months ended September 30, 2017. The quarterly Return on Average
Assets (ROAA) was 0.86% and the quarterly Return on Average Equity
(ROAE) was 8.09%. On a year-to-date basis, net income was $9.1 million
or $0.67 per diluted share, a 16.2% increase compared to the $7.9
million or $0.58 per diluted share for the nine months ended September
30, 2017. Year-to-date ROAA and ROAE were 0.98% and 9.13%,
respectively.
The record quarterly growth in assets, loans and deposits, improved funding composition and record quarterly net interest income stem from business development investments in both personnel and new banking center locations. Year to date, the number of full-time equivalent employees has increased by 20 or 16%. The Company believes these new hires have expanded its capacity for future growth. In addition, the Company opened a full-service branch in Washington, DC in January 2018. In September 2018, a new loan production office opened in Woodbridge, Virginia and a loan production office in Tysons Corner, Virginia was converted into a full-service branch. The Company expects its operating efficiency will improve as our business development officers, aided by the new locations, grow their portfolios.
Balance Sheet Review
Assets
Total assets were $1.32 billion at September 30, 2018, $1.18 billion at December 31, 2017 and $1.15 billion at September 30, 2017. During the first nine months of 2018 assets increased $148.0 million, or 12.6%. Year-over-year asset growth, from September 30, 2017 to September 30, 2018, was $169.7 million, or 14.7%.
Loans
Gross loans were $1.108 billion at September 30, 2018, $1.009 billion at December 31, 2017 and $971.8 million at September 30, 2017. During the third quarter, gross loans grew $68.3 million or 6.6%. During the first nine months of 2018 gross loans increased $99.8 million, or 9.9%. Year-over-year gross loans increased $136.7 million, or 14.1% from September 30, 2017 to September 30, 2018.
Investment Securities
The Company’s investment portfolio comprised of held-to-maturity and available-for-sale securities was $97.7 million at September 30, 2018, $96.3 million at December 31, 2017 and $96.6 million at September 30, 2017. Year-over-year the investment portfolio growth, from September 30, 2017 to September 30, 2018, was $1.1 million, or 1.1%. As of September 30, 2018, the Company held $36.8 million of its investment portfolio as held-to-maturity, and $60.9 million as available-for-sale. The Company also had restricted securities totaling $7.4 million at September 30, 2018, $8.4 million at December 31, 2017 and $7.7 million at September 30, 2017.
Interest Bearing Deposits in Banks
Interest-bearing deposits in banks were $75.0 million at September 30, 2018, $30.9 million at December 31, 2017 and $46.5 million at September 30, 2017. The higher cash balances at the period ending September 30, 2018 are a result of the deposit growth and will be deployed into higher earning assets as we continue to implement our strategic initiatives.
Bank Owned Life Insurance
At September 30, 2018, the estimated fair value of bank owned life insurance was $19.5 million, compared to $19.1 million at December 31, 2017 and $19.0 million at September 30, 2017.
Deposits
Total deposits were $1.087 billion at September 30, 2018, $896.9 million at December 31, 2017 and $897.6 million at September 30, 2017. During the third quarter, deposits grew $112.2 million or 11.5%. During the first nine months of 2018, deposits increased $189.7 million, or 21.2%. Year-over-year deposit growth, from September 30, 2017 to September 30, 2018, was $189.1 million, or 21.1%. Core customer funding was $1.008 billion at September 30, 2018, $829.8 million at December 31, 2017 and $835.9 million at September 30, 2017. Year-over-year core customer funding sources, which include deposits, ICS and CDARs, increased by $171.7 million, or 20.5%, from September 30, 2017 to September 30, 2018. With the strategic initiatives implemented earlier this year, the Company continues to grow core deposits and loans while expanding our locations to better serve our customers.
QwickRate certificates of deposit were $24.1 million at September 30, 2018, $24.7 million at December 31, 2017 and $22.2 million at September 30, 2017. Year-over-year QwickRate certificates of deposit increased $1.9 million from September 30, 2017 to September 30, 2018. ICS deposits were $94.1 million at September 30, 2018, $65.3 million at December 31, 2017 and $56.4 million as of September 30, 2017. Year-over-year, ICS deposits increased $37.7 million from September 30, 2017 to September 30, 2018. CDARs were $112.9 million at September 30, 2018, $77.5 million at December 31, 2017 and $86.5 million at September 30, 2017. Year-over-year CDARs increased $26.4 million from September 30, 2017 to September 30, 2018. Brokered deposits were $55.0 million at September 30, 2018, $42.4 million at December 31, 2017 and $39.5 million at September 30, 2017. Brokered deposits increased $15.5 million from September 30, 2017 to September 30, 2018.
Borrowings
Total borrowings, consisting of Federal Home Loan Bank advances and Federal funds purchased, were $69.0 million at September 30, 2018, $118.5 million at December 31, 2017 and $98.0 million at September 30, 2017. Total borrowings decreased $29.0 million, or 29.6%, from September 30, 2017 to September 30, 2018. Federal Home Loan Bank advances were $69.0 million at September 30, 2018, $108.5 million at December 31, 2017 and $98.0 million at September 30, 2017. The 20.3% decrease year-to-date in borrowings was a result of the significant growth in core customer deposits.
The Company had subordinated notes with a balance of $24.6 million at September 30, 2018 and $24.5 million at December 31, 2017 and September 30, 2017. The notes qualify as Tier 2 capital for the Company for regulatory purposes.
Shareholders’ Equity and Capital Levels
Total shareholders’ equity was $138.0 million at September 30, 2018, $128.9 million at December 31, 2017 and $127.8 million at September 30, 2017. Year-over-year shareholders’ equity increased by $10.2 million, or 8.0%. Total common shares outstanding increased from 12,824,047, including 85,269 unvested shares, at September 30, 2017, to 12,888,350, including 86,725 unvested shares, at September 30, 2018.
The Company’s capital ratios remain well above regulatory minimums for well capitalized banks. As of September 30, 2018, the Company’s total risk-based capital ratio was 14.3%, compared to 14.6% at September 30, 2017.
Income Statement Review
Net Interest Income
Net interest income, the Company’s primary source of revenue, was $10.9 million for the three months ended September 30, 2018, up 5.8% from $10.3 million for the three months ended September 30, 2017. The net interest margin was 3.43% for the three months ended September 30, 2018 as compared to 3.65% for the three months ended September 30, 2017. Average net loans increased $106.6 million from September 30, 2017, with a 10 basis point increase in yield. Average interest-bearing deposits in other banks increased $30.2 million from September 30, 2017, with a 68 basis point increase in yield. Higher interest-bearing deposit balances continue to impact the margin. These funds continue to be deployed into higher earning assets. The average cost of interest bearing liabilities increased 47 basis points when comparing the quarter ended September 30, 2017 to the quarter ended September 30, 2018. Average interest bearing deposits increased $116.6 million with a 51 basis point increase. During the twelve months ended September 30, 2018, the Federal Reserve increased rates by 125 basis points to a target of 2.25%. The change in the target rate along with market pressure has had an impact on the cost of deposits.
For the nine months ended September 30, 2018, net interest income was $32.1 million, up 7.1% from $29.9 million for the nine months ended September 30, 2017. The net interest margin was 3.52% during the first nine months of 2018, compared to 3.73% during the first nine months of 2017. Despite the decline in the net interest margin over the past year, net interest income increased by 7.1% during the first nine months of 2018, compared to the first nine months of 2017, resulting primarily from a $147.4 million, or 13.8%, increase in average earning assets during the first nine months of 2018, compared to the first nine months of 2017.
Provision for Loan Losses
The Company had $476 thousand in provision for loan losses for the three months ended September 30, 2018, compared to a provision of $500 thousand for the same period in 2017. The Company had no loan charge-offs during the third quarter of 2018, compared to net loan charge-offs of $345 thousand in the third quarter of 2017.
During the first nine months of 2018, the Company recognized a provision for loan losses of $666 thousand, compared to a provision of $1.1 million during the first nine months of 2017. The Company reported $86 thousand in net loan charge-offs during the first nine months of 2018, compared to $331 thousand in net loan charge-offs during the first nine months of 2017.
Asset quality remained strong and the Company’s historical loss factors used in the allowance for loan losses calculation have declined, thus resulting in lower provisions for loan losses in 2018 as compared to 2017.
Noninterest Income
The Company’s noninterest income consists primarily of bank owned life insurance income and service charges on deposit accounts. The majority of loan fees are included in interest income on the loan portfolio and not reported as noninterest income.
For the three months ended September 30, 2018, the Company reported total noninterest income of $307 thousand, compared to $305 thousand during the three months ended September 30, 2017.
For the nine months ended September 30, 2018, the Company reported total noninterest income of $934 thousand, compared to $963 thousand during the first nine months of 2017, a decrease of $29 thousand, or 3.0%.
The year-over-year change for the nine month period ended September 30, 2018 was primarily attributable to gains on sales of securities totaling $134 thousand during the same time period in 2017. There was no gain on sale of securities during the first nine months of 2018. Service charges on deposit accounts increased $45 thousand, or 47.9%, for the three months ended September 30, 2018 and $87 thousand, or 30.9%, for the nine months ended September 30, 2018 as compared to the same periods in the prior year. The increase in other service charges and fees for the nine months ended September 30, 2018 was related to higher fees earned on CDARs balances.
Noninterest Expense
In pursuing its growth strategy, the Company has hired experienced local banking professionals and has expanded our footprint to new locations. The increases in noninterest expenses are expected to drive significant growth in assets and profitability. The balance sheet growth is evident in the third quarter results, as noted above.
For the three months ended September 30, 2018, salaries and employee benefits expense increased 27.3% to $4.7 million, compared to $3.7 million for the same period in 2017. All other noninterest expenses increased by 11.9%, or $269 thousand during the third quarter of 2018, compared to the same period in 2017.
During the first nine months of 2018, salaries and employee benefits expense increased by 23.9%, to $13.4 million, compared to $10.8 million during the first nine months of 2017. All other operating expenses increased by 7.3%, or $507 thousand, to $7.4 million, during the first nine months of 2018, compared to $6.9 million during the first nine months of 2017.
The increase in salaries and benefits for both the three and nine month periods ended September 30, 2018 was primarily attributable to the addition of 20 positions year-over-year including staff for: expansion of our Arlington office space in December 2017 owing to growth, our full service branch in Washington, DC that opened in January 2018, our loan production office in Woodbridge, Virginia that opened in September 2018 and our Tysons Corner, Virginia loan production office which moved into a larger space and converted to a full service branch on October 1, 2018. In addition to the staff needed at our new locations, we hired key executives, loan and business development officers as well as support staff in our operations office. The new employees are complementary to the overall growth initiatives for the Company. The increase in occupancy and furniture and equipment expenses was mostly related to additional rent and furniture expense related to the new locations listed above.
Asset Quality
As of September 30, 2018, non-performing assets were 0.07% of total assets, compared to 0.23% at September 30, 2017. The Company’s allowance for loan losses covered non-performing loans by 17.6 times as of September 30, 2018, compared to 3.9 times as of September 30, 2017. As of September 30, 2018, non-accrual loans totaled $390 thousand, an 82.9% decrease from $2.3 million at September 30, 2017. As of September 30, 2018, there were $372 thousand in loans past due and still accruing interest and $20 thousand as of September 30, 2017. The balance of accruing past due loans consisted of loans in the process of renewal at September 30, 2018.
Troubled debt restructurings were $484 thousand at September 30, 2018, a decrease of $14 thousand, or 2.8%, from $498 thousand at September 30, 2017. All troubled debt restructurings were performing in accordance with modified terms as of September 30, 2018. The Company had $379 thousand in other real estate owned as of September 30, 2018 and December 31, 2017 and $392 thousand as of September 30, 2017.
About John Marshall Bancorp, Inc.
John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. John Marshall Bank is headquartered in Reston, Virginia and has seven full-service banking centers located in Reston, Leesburg, Arlington Alexandria and Tysons Corner, Virginia; Rockville, Maryland; Washington, DC and two loan production offices in Arlington and Woodbridge, Virginia. 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. | ||||||||||||
| 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, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Selected Balance Sheet Data | ||||||||||||
Total investment securities | $ | 105,159 | $ | 104,319 | $ | 105,159 | $ | 104,319 | ||||
| Total loans, net of deferred fees | 1,106,610 | 969,849 | 1,106,610 | 969,849 | ||||||||
| Allowance for loan losses | 9,508 | 9,017 | 9,508 | 9,017 | ||||||||
| Total assets | 1,323,028 | 1,153,315 | 1,323,028 | 1,153,315 | ||||||||
| Non-interest bearing demand deposits | 217,430 | 177,226 | 217,430 | 177,226 | ||||||||
| Interest bearing deposits | 869,238 | 720,357 | 869,238 | 720,357 | ||||||||
| Total deposits | 1,086,668 | 897,583 | 1,086,668 | 897,583 | ||||||||
| Shareholders' equity | 137,975 | 127,778 | 137,975 | 127,778 | ||||||||
| Summary Results of Operations | ||||||||||||
| Interest income | $ | 14,710 | $ | 12,739 | $ | 41,827 | $ | 36,107 | ||||
| Interest expense | 3,845 | 2,473 | 9,775 | 6,172 | ||||||||
| Net interest income | 10,865 | 10,266 | 32,052 | 29,935 | ||||||||
| Provisions for loan losses | 476 | 500 | 666 | 1,145 | ||||||||
| Net income after provisions for loan losses | 10,389 | 9,766 | 31,386 | 28,790 | ||||||||
| Noninterest income | 307 | 305 | 934 | 963 | ||||||||
| Noninterest expense | 7,217 | 5,943 | 20,820 | 17,728 | ||||||||
| Net income before taxes | 3,479 | 4,128 | 11,500 | 12,025 | ||||||||
| Net income | 2,800 | 2,651 | 9,143 | 7,866 | ||||||||
| Per share Data and Shares Outstanding | ||||||||||||
| Earnings per share - basic | $ | 0.22 | $ | 0.21 | $ | 0.71 | $ | 0.62 | ||||
| Earnings per share - diluted | $ | 0.21 | $ | 0.19 | $ | 0.67 | $ | 0.58 | ||||
| Tangible book value per share | $ | 10.71 | $ | 9.96 | $ | 10.71 | $ | 9.96 | ||||
| Weighted average common shares (basic) | 12,788,292 | 12,722,496 | 12,777,151 | 12,708,284 | ||||||||
| Weighted average common shares (diluted) | 13,550,060 | 13,472,698 | 13,533,384 | 13,481,035 | ||||||||
| Common shares outstanding at end of period | 12,888,350 | 12,824,047 | 12,888,350 | 12,824,047 | ||||||||
| Performance Ratios | ||||||||||||
| Return on average assets (annualized) | 0.86% | 0.91% | 0.98% | 0.95% | ||||||||
| Return on average equity (annualized) | 8.09% | 8.26% | 9.13% | 8.47% | ||||||||
| Net interest margin | 3.43% | 3.65% | 3.52% | 3.73% | ||||||||
| Noninterest income as a percentage of average assets (annualized) | 0.09% | 0.11% | 0.10% | 0.12% | ||||||||
| Noninterest expense to average assets (annualized) | 2.22% | 2.05% | 2.22% | 2.15% | ||||||||
| Efficiency ratio | 64.6% | 56.2% | 63.1% | 57.4% | ||||||||
| Asset Quality | ||||||||||||
| Non-performing assets to total assets | 0.07% | 0.23% | 0.07% | 0.23% | ||||||||
| Non-performing loans to total loans | 0.05% | 0.23% | 0.05% | 0.23% | ||||||||
| Allowance for loan losses to non-performing loans | 17.6x | 3.9x | 17.6x | 3.9x | ||||||||
| Allowance for loan losses to total loans | 0.86% | 0.93% | 0.86% | 0.93% | ||||||||
| Net charge-offs to average loans (annualized) | 0.00% | 0.14% | 0.01% | 0.05% | ||||||||
| Loans 30-89 days past due and accruing interest | $ | 222 | $ | 20 | $ | 222 | $ | 20 | ||||
| Loans 90 days or more past due and accruing interest | $ | 150 | $ | - - | $ | 150 | $ | - - | ||||
| Non-accrual loans | $ | 390 | $ | 2,287 | $ | 390 | $ | 2,287 | ||||
| Other real estate owned | $ | 379 | $ | 392 | $ | 379 | $ | 392 | ||||
| Non-performing assets (1) | $ | 919 | $ | 2,679 | $ | 919 | $ | 2,679 | ||||
| Net loan charge-offs | $ | - - | $ | 345 | $ | 86 | $ | 331 | ||||
| Troubled debt restructurings (total) | $ | 484 | $ | 498 | $ | 484 | $ | 498 | ||||
| Performing in accordance with modified terms | $ | 484 | $ | 498 | $ | 484 | $ | 498 | ||||
| Not performing in accordance with modified terms | $ | - - | $ | - - | $ | - - | $ | - - | ||||
| Capital Ratios | ||||||||||||
| Tangible equity / tangible assets | 10.4% | 11.1% | 10.4% | 11.1% | ||||||||
| Total risk-based capital ratio | 14.3% | 14.6% | 14.3% | 14.6% | ||||||||
| Tier 1 risk-based capital ratio | 11.5% | 11.6% | 11.5% | 11.6% | ||||||||
| Leverage ratio | 11.2% | 11.1% | 11.2% | 11.1% | ||||||||
| Common equity tier 1 ratio | 11.5% | 11.6% | 11.5% | 11.6% | ||||||||
| Other Information | ||||||||||||
| Number of full time equivalent employees | 145 | 125 | 145 | 125 | ||||||||
| # Full service branch offices | 7 | 5 | 7 | 5 | ||||||||
| # Loan production or limited service branch offices | 2 | 2 | 2 | 2 | ||||||||
| (1) 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. |
| 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 | ||||||||||||||
| 2018 | 2017 | 2017 | Months | Year | ||||||||||||||
| Assets | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Cash and due from banks | $ | 9,918 | $ | 7,256 | $ | 5,684 | 36.7 | % | 74.5 | % | ||||||||
| Federal funds sold | 96 | 40 | 56 | 140.0 | % | 71.4 | % | |||||||||||
| Interest-bearing deposits in banks | 74,982 | 30,873 | 46,512 | 142.9 | % | 61.2 | % | |||||||||||
| Securities available-for-sale, at fair value | 60,915 | 54,699 | 53,197 | 11.4 | % | 14.5 | % | |||||||||||
Securities held-to-maturity, fair value of $35,730 at 9/30/2018, $41,500 at 12/31/2017 and $43,618 at 9/30/2017 | 36,803 | 41,570 | 43,427 | -11.5 | % | -15.3 | % | |||||||||||
| Restricted securities, at cost | 7,339 | 8,447 | 7,695 | -13.1 | % | -4.6 | % | |||||||||||
| Equity securities, at fair value | 102 | - - | - - | N/M | N/M | |||||||||||||
Loans, net of allowance for loan losses of $9,508 at 9/30/2018, $8,927 at 12/31/2017 and $9,017 at 9/30/2017 | 1,097,102 | 997,945 | 960,832 | 9.9 | % | 14.2 | % | |||||||||||
| Bank premises and equipment, net | 2,561 | 2,480 | 2,543 | 3.3 | % | 0.7 | % | |||||||||||
| Accrued interest receivable | 3,613 | 3,263 | 3,043 | 10.7 | % | 18.7 | % | |||||||||||
| Bank owned life insurance | 19,485 | 19,093 | 18,955 | 2.1 | % | 2.8 | % | |||||||||||
| Other real estate owned | 379 | 379 | 392 | 0.0 | % | -3.3 | % | |||||||||||
| Other assets | 9,733 | 8,980 | 10,979 | 8.4 | % | -11.3 | % | |||||||||||
| Total assets | $ | 1,323,028 | $ | 1,175,025 | $ | 1,153,315 | 12.6 | % | 14.7 | % | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Liabilities | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Non-interest bearing demand deposits | $ | 217,430 | $ | 174,686 | $ | 177,226 | 24.5 | % | 22.7 | % | ||||||||
| Interest bearing demand deposits | 346,146 | 258,306 | 260,211 | 34.0 | % | 33.0 | % | |||||||||||
| Savings deposits | 6,724 | 6,709 | 7,043 | 0.2 | % | -4.5 | % | |||||||||||
| Time deposits | 516,368 | 457,240 | 453,103 | 12.9 | % | 14.0 | % | |||||||||||
| Total deposits | 1,086,668 | 896,941 | 897,583 | 21.2 | % | 21.1 | % | |||||||||||
| Federal funds purchased | - - | 10,001 | - - | N/M | N/M | |||||||||||||
| Federal Home Loan Bank advances | 69,000 | 108,500 | 98,000 | -36.4 | % | -29.6 | % | |||||||||||
| Subordinated Debt | 24,568 | 24,531 | 24,519 | 0.2 | % | 0.2 | % | |||||||||||
| Accrued interest payable | 843 | 996 | 633 | -15.4 | % | 33.2 | % | |||||||||||
| Other liabilities | 3,974 | 5,189 | 4,802 | -23.4 | % | -17.2 | % | |||||||||||
| Total liabilities | 1,185,053 | 1,046,158 | 1,025,537 | 13.3 | % | 15.6 | % | |||||||||||
| Shareholders' Equity | ||||||||||||||||||
Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued | - - | - - | - - | - - | - - | |||||||||||||
Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued | - - | - - | - - | - - | - - | |||||||||||||
Common stock, voting, par value $0.01 per share; authorized 20,000,000 shares; issued and outstanding, 12,888,350 at 9/30/2018 including 86,725 unvested shares, 12,824,233 shares at 12/31/2017 including 85,007 unvested shares and 12,824,047 at 9/30/17, including 85,269 unvested shares | 128 | 127 | 127 | 0.8 | % | 0.8 | % | |||||||||||
| Additional paid-in capital | 84,828 | 83,867 | 83,670 | 1.1 | % | 1.4 | % | |||||||||||
| Retained earnings | 54,574 | 45,544 | 44,313 | 19.8 | % | 23.2 | % | |||||||||||
| Accumulated other comprehensive loss | (1,555 | ) | (671 | ) | (332 | ) | -131.7 | % | -368.4 | % | ||||||||
| Total shareholders' equity | 137,975 | 128,867 | 127,778 | 7.1 | % | 8.0 | % | |||||||||||
| Total liabilities and shareholders' equity | $ | 1,323,028 | $ | 1,175,025 | $ | 1,153,315 | 12.6 | % | 14.7 | % | ||||||||
| 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, | |||||||||||||||||
| 2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Interest and Dividend Income | ||||||||||||||||||
| Interest and fees on loans | $ | 13,623 | $ | 12,001 | 13.5 | % | $ | 38,792 | $ | 34,211 | 13.4 | % | ||||||
| Interest on investment securities, taxable | 435 | 356 | 22.2 | % | 1,267 | 1,053 | 20.3 | % | ||||||||||
| Interest on investment securities, tax-exempt | 83 | 79 | 5.1 | % | 251 | 184 | 36.4 | % | ||||||||||
| Dividends | 119 | 106 | 12.3 | % | 361 | 309 | 16.8 | % | ||||||||||
| Interest on deposits in banks | 450 | 197 | 128.4 | % | 1,156 | 350 | 230.3 | % | ||||||||||
| Total interest and dividend income | 14,710 | 12,739 | 15.5 | % | 41,827 | 36,107 | 15.8 | % | ||||||||||
| Interest Expense | ||||||||||||||||||
| Deposits | 3,141 | 1,791 | 75.4 | % | 7,552 | 4,828 | 56.4 | % | ||||||||||
| Federal Home Loan Bank advances | 332 | 334 | -0.6 | % | 1,106 | 976 | 13.3 | % | ||||||||||
| Subordinated debt | 372 | 347 | 7.2 | % | 1,115 | 347 | 221.3 | % | ||||||||||
| Other short-term borrowings | - - | 1 | N/M | 2 | 21 | -90.5 | % | |||||||||||
| Total interest expense | 3,845 | 2,473 | 55.5 | % | 9,775 | 6,172 | 58.4 | % | ||||||||||
| Net interest income | 10,865 | 10,266 | 5.8 | % | 32,052 | 29,935 | 7.1 | % | ||||||||||
| Provision for loan losses | 476 | 500 | -4.8 | % | 666 | 1,145 | -41.8 | % | ||||||||||
| Net interest income after provision for loan losses | 10,389 | 9,766 | 6.4 | % | 31,386 | 28,790 | 9.0 | % | ||||||||||
| Noninterest Income | ||||||||||||||||||
| Service charges on deposit accounts | 139 | 94 | 47.9 | % | 369 | 282 | 30.9 | % | ||||||||||
| Bank owned life insurance | 131 | 141 | -7.1 | % | 392 | 416 | -5.8 | % | ||||||||||
| Other service charges and fees | 29 | 66 | -56.1 | % | 150 | 120 | 25.0 | % | ||||||||||
| Gain on sale of securities | - - | 4 | N/M | - - | 134 | N/M | ||||||||||||
| Other real estate owned | 5 | - - | N/M | 16 | - - | N/M | ||||||||||||
| Gain on sale of fixed assets | - - | - - | N/M | - - | 1 | N/M | ||||||||||||
| Other operating income | 3 | - - | N/M | 7 | 10 | -30.0 | % | |||||||||||
| Total noninterest income | 307 | 305 | 0.7 | % | 934 | 963 | -3.0 | % | ||||||||||
| Noninterest Expenses | ||||||||||||||||||
| Salaries and employee benefits | 4,681 | 3,676 | 27.3 | % | 13,413 | 10,828 | 23.9 | % | ||||||||||
| Occupancy expense of premises | 514 | 446 | 15.2 | % | 1,501 | 1,344 | 11.7 | % | ||||||||||
| Furniture and equipment expenses | 331 | 305 | 8.5 | % | 956 | 868 | 10.1 | % | ||||||||||
| Other real estate owned expenses | 3 | - - | N/M | 3 | - - | N/M | ||||||||||||
| Other operating expenses | 1,688 | 1,516 | 11.3 | % | 4,947 | 4,688 | 5.5 | % | ||||||||||
| Total noninterest expenses | 7,217 | 5,943 | 21.4 | % | 20,820 | 17,728 | 17.4 | % | ||||||||||
| Income before income taxes | 3,479 | 4,128 | -15.7 | % | 11,500 | 12,025 | -4.4 | % | ||||||||||
| Income tax expense | 679# | 1,477 | -54.0 | % | 2,357# | 4,159 | -43.3 | % | ||||||||||
| Net income | $ | 2,800 | $ | 2,651 | 5.6 | % | $ | 9,143 | $ | 7,866 | 16.2 | % | ||||||
| Earnings Per Share | ||||||||||||||||||
| Basic | $ | 0.22 | $ | 0.21 | 4.8 | % | $ | 0.71 | $ | 0.62 | 14.5 | % | ||||||
| Diluted | $ | 0.21 | $ | 0.19 | 10.5 | % | $ | 0.67 | $ | 0.58 | 15.5 | % | ||||||
| John Marshall Bancorp, Inc. | |||||||||||||||||||||||||||
| Loan, Deposit and Borrowing Detail (Unaudited) | |||||||||||||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||||||||||||
| September 30, 2018 | December 31, 2017 | September 30, 2017 | Percentage Change | ||||||||||||||||||||||||
| Loans | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 9 Mos | Last 12 Mos | |||||||||||||||||||
| Mortgage loans on real estate | |||||||||||||||||||||||||||
| Commercial | $ | 683,259 | 61.6 | % | $ | 577,016 | 57.1 | % | $ | 543,865 | 56.0 | % | 18.4 | % | 25.6 | % | |||||||||||
| Construction and land development | 216,242 | 19.5 | % | 218,538 | 21.7 | % | 217,334 | 22.3 | % | -1.1 | % | -0.5 | % | ||||||||||||||
| Residential | 136,038 | 12.3 | % | 135,791 | 13.5 | % | 131,233 | 13.5 | % | 0.2 | % | 3.7 | % | ||||||||||||||
| Total mortgage loans on real estate | $ | 1,035,539 | 93.4 | % | $ | 931,345 | 92.3 | % | $ | 892,432 | 91.8 | % | 11.2 | % | 16.0 | % | |||||||||||
| Commercial loans | 71,258 | 6.4 | % | 76,573 | 7.6 | % | 78,302 | 8.1 | % | -6.9 | % | -9.0 | % | ||||||||||||||
| Consumer loans | 1,686 | 0.2 | % | 777 | 0.1 | % | 1,096 | 0.1 | % | 117.0 | % | 53.8 | % | ||||||||||||||
| Total loans | $ | 1,108,483 | 100.0 | % | $ | 1,008,695 | 100.0 | % | $ | 971,830 | 100.0 | % | 9.9 | % | 14.1 | % | |||||||||||
| Less: Allowance for loan losses | (9,508 | ) | (8,927 | ) | (9,017 | ) | |||||||||||||||||||||
| Net deferred loan fees | (1,873 | ) | (1,823 | ) | (1,981 | ) | |||||||||||||||||||||
| Net loans | $ | 1,097,102 | $ | 997,945 | $ | 960,832 | |||||||||||||||||||||
| September 30, 2018 | December 31, 2017 | September 30, 2017 | Percentage Change | ||||||||||||||||||||||||
| Deposits | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 9 Mos | Last 12 Mos | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 217,430 | 20.0 | % | $ | 174,686 | 19.5 | % | $ | 177,226 | 19.7 | % | 24.5 | % | 22.7 | % | |||||||||||
| Interest-bearing demand deposits: | |||||||||||||||||||||||||||
| NOW accounts | 50,541 | 4.6 | % | 33,505 | 3.7 | % | 41,736 | 4.7 | % | 50.8 | % | 21.1 | % | ||||||||||||||
| Money market accounts | 200,503 | 18.5 | % | 159,508 | 17.8 | % | 155,340 | 17.3 | % | 25.7 | % | 29.1 | % | ||||||||||||||
| Savings accounts | 6,724 | 0.6 | % | 6,709 | 0.8 | % | 7,043 | 0.8 | % | 0.2 | % | -4.5 | % | ||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||
| $250,000 or more | 217,549 | 20.0 | % | 199,161 | 22.2 | % | 198,362 | 22.1 | % | 9.2 | % | 9.7 | % | ||||||||||||||
| Less than $250,000 | 107,900 | 9.9 | % | 113,374 | 12.6 | % | 113,348 | 12.6 | % | -4.8 | % | -4.8 | % | ||||||||||||||
| QwickRate® Certificates of deposit | 24,076 | 2.2 | % | 24,735 | 2.8 | % | 22,185 | 2.5 | % | -2.7 | % | 8.5 | % | ||||||||||||||
| ICS® | 94,095 | 8.7 | % | 65,293 | 7.3 | % | 56,402 | 6.3 | % | 44.1 | % | 66.8 | % | ||||||||||||||
| CDARS® | 112,870 | 10.4 | % | 77,531 | 8.6 | % | 86,469 | 9.6 | % | 45.6 | % | 30.5 | % | ||||||||||||||
| Brokered deposits | 54,980 | 5.1 | % | 42,439 | 4.7 | % | 39,472 | 4.4 | % | 29.6 | % | 39.3 | % | ||||||||||||||
| Total deposits | $ | 1,086,668 | 100.0 | % | $ | 896,941 | 100.0 | % | $ | 897,583 | 100.0 | % | 21.2 | % | 21.1 | % | |||||||||||
Borrowings | |||||||||||||||||||||||||||
| Federal funds purchased | $ | - - | 0.0 | % | $ | 10,001 | 7.0 | % | $ | - - | 0.0 | % | N/M | N/M | |||||||||||||
| Federal Home Loan Bank advances | 69,000 | 73.7 | % | 108,500 | 75.9 | % | 98,000 | 80.0 | % | -36.4 | % | -29.6 | % | ||||||||||||||
| Subordinated debt | 24,568 | 26.3 | % | 24,531 | 17.2 | % | 24,519 | 20.0 | % | 0.1 | % | 0.2 | % | ||||||||||||||
| Total borrowings | $ | 93,568 | 100.0 | % | $ | 143,032 | 100.0 | % | $ | 122,519 | 100.0 | % | -34.6 | % | -23.6 | % | |||||||||||
| Total deposits and borrowings | $ | 1,180,236 | $ | 1,039,973 | $ | 1,020,102 | 13.5 | % | 15.7 | % | |||||||||||||||||
| Core customer funding sources (1) | $ | 1,007,612 | 85.4 | % | $ | 829,767 | 79.8 | % | $ | 835,926 | 81.9 | % | 21.4 | % | 20.5 | % | |||||||||||
| Wholesale funding sources (2) | 148,056 | 12.5 | % | 185,675 | 17.9 | % | 159,657 | 15.7 | % | -20.3 | % | -7.3 | % | ||||||||||||||
| Subordinated debt (3) | 24,568 | 2.1 | % | 24,531 | 2.3 | % | 24,519 | 2.4 | % | 0.1 | % | 0.2 | % | ||||||||||||||
| Total funding sources | $ | 1,180,236 | 100.0 | % | $ | 1,039,973 | 100.0 | % | $ | 1,020,102 | 100.0 | % | 13.5 | % | 15.7 | % | |||||||||||
| (1) | Includes ICS and CDARS(r), which are all reciprocal deposits maintained by customers. | |
| (2) | Consists of QwickRate(r) certificates of deposit, brokered deposits 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 September 30, 2018 | Three Months Ended September 30, 2017 | |||||||||||||||||
| Interest | Average | Interest | Average | |||||||||||||||
| Average | Income- | Yields | Average | Income- | Yields | |||||||||||||
| Balance | Expense | /Rates | Balance | Expense | /Rates | |||||||||||||
| Assets | ||||||||||||||||||
| Securities | $ | 103,067 | $ | 637 | 2.45 | % | $ | 99,432 | $ | 541 | 2.16 | % | ||||||
| Loans, net of unearned income | 1,063,490 | 13,623 | 5.08 | % | 956,911 | 12,001 | 4.98 | % | ||||||||||
| Interest-bearing deposits in other banks | 90,184 | 450 | 1.98 | % | 60,012 | 197 | 1.30 | % | ||||||||||
| Federal funds sold | 76 | - - | 0.00 | % | 58 | - - | 0.00 | % | ||||||||||
| Total interest-earning assets | $ | 1,256,817 | $ | 14,710 | 4.64 | % | $ | 1,116,413 | $ | 12,739 | 4.53 | % | ||||||
| Other assets | 32,745 | 33,569 | ||||||||||||||||
| Total assets | $ | 1,289,562 | $ | 1,149,982 | ||||||||||||||
| Liabilities & Shareholders' equity | ||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||
| NOW accounts | $ | 80,707 | $ | 184 | 0.90 | % | $ | 59,693 | $ | 53 | 0.35 | % | ||||||
| Money market accounts | 235,391 | 778 | 1.31 | % | 200,151 | 320 | 0.63 | % | ||||||||||
| Savings accounts | 6,560 | 4 | 0.24 | % | 6,896 | 4 | 0.23 | % | ||||||||||
| Time deposits | 504,994 | 2,175 | 1.71 | % | 444,301 | 1,414 | 1.26 | % | ||||||||||
| Total interest-bearing deposits | $ | 827,652 | $ | 3,141 | 1.51 | % | $ | 711,041 | $ | 1,791 | 1.00 | % | ||||||
Securities sold under agreement to repurchase and federal funds purchased | $ | - - | $ | - - | N/M | $ | 1,334 | $ | 1 | 0.30 | % | |||||||
| Subordinated debt | 24,561 | 372 | 6.01 | % | 23,189 | 347 | 5.94 | % | ||||||||||
| Other borrowed funds | 78,891 | 332 | 1.67 | % | 102,620 | 334 | 1.29 | % | ||||||||||
| Total interest-bearing liabilities | $ | 931,104 | $ | 3,845 | 1.64 | % | $ | 838,184 | $ | 2,473 | 1.17 | % | ||||||
| Demand deposits and other liabilities | 221,260 | 184,408 | ||||||||||||||||
| Total liabilities | $ | 1,152,364 | $ | 1,022,592 | ||||||||||||||
| Shareholders' equity | 137,198 | 127,390 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,289,562 | $ | 1,149,982 | ||||||||||||||
| Interest rate spread | 3.00 | % | 3.36 | % | ||||||||||||||
| Net interest income and margin | $ | 10,865 | 3.43 | % | $ | 10,266 | 3.65 | % | ||||||||||
| Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | |||||||||||||||||
| Interest | Average | Interest | Average | |||||||||||||||
| Average | Income- | Yields | Average | Income- | Yields | |||||||||||||
| Balance | Expense | /Rates | Balance | Expense | /Rates | |||||||||||||
| Assets | ||||||||||||||||||
| Securities | $ | 103,962 | $ | 1,879 | 2.42 | % | $ | 96,177 | $ | 1,546 | 2.15 | % | ||||||
| Loans, net of unearned income | 1,029,863 | 38,792 | 5.04 | % | 933,660 | 34,211 | 4.90 | % | ||||||||||
| Interest-bearing deposits in other banks | 85,114 | 1,156 | 1.82 | % | 41,683 | 350 | 1.12 | % | ||||||||||
| Federal funds sold | 68 | - - | 0.00 | % | 57 | - - | 0.00 | % | ||||||||||
| Total interest-earning assets | $ | 1,219,007 | $ | 41,827 | 4.59 | % | $ | 1,071,577 | $ | 36,107 | 4.51 | % | ||||||
| Other assets | 32,091 | 32,630 | ||||||||||||||||
| Total assets | $ | 1,251,098 | $ | 1,104,207 | ||||||||||||||
| Liabilities & Shareholders' equity | ||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||
| NOW accounts | $ | 69,860 | $ | 320 | 0.61 | % | $ | 45,849 | $ | 108 | 0.31 | % | ||||||
| Money market accounts | 222,587 | 1,604 | 0.96 | % | 200,338 | 843 | 0.56 | % | ||||||||||
| Savings accounts | 6,835 | 12 | 0.23 | % | 7,172 | 12 | 0.22 | % | ||||||||||
| Time deposits | 484,431 | 5,616 | 1.55 | % | 430,830 | 3,865 | 1.20 | % | ||||||||||
| Total interest-bearing deposits | $ | 783,713 | $ | 7,552 | 1.29 | % | $ | 684,189 | $ | 4,828 | 0.94 | % | ||||||
Securities sold under agreement to repurchase and federal funds purchased | $ | 110 | $ | 2 | 2.43 | % | $ | 6,568 | $ | 21 | 0.43 | % | ||||||
| Subordinated debt | 24,548 | 1,115 | 6.07 | % | 7,814 | 347 | 5.94 | % | ||||||||||
| Other borrowed funds | 94,516 | 1,106 | 1.56 | % | 105,418 | 976 | 1.24 | % | ||||||||||
| Total interest-bearing liabilities | $ | 902,887 | $ | 9,775 | 1.45 | % | $ | 803,989 | $ | 6,172 | 1.03 | % | ||||||
| Demand deposits and other liabilities | 214,335 | 176,040 | ||||||||||||||||
| Total liabilities | $ | 1,117,222 | $ | 980,029 | ||||||||||||||
| Shareholders' equity | 133,876 | 124,178 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,251,098 | $ | 1,104,207 | ||||||||||||||
| Interest rate spread | 3.14 | % | 3.48 | % | ||||||||||||||
| Net interest income and margin | $ | 32,052 | 3.52 | % | $ | 29,935 | 3.73 | % | ||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181017005180/en/
Contacts:
Chris Bergstrom, 703-584-0840
