John Marshall Bancorp, Inc. (OTCQB: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”) reported its financial results for the three and twelve months ended December 31, 2018.
Selected Highlights
- Improved Sequential Quarter Performance – Owing to the Tax Cuts and Jobs Act implemented in December 2017, the Company believes that a comparison of fourth quarter 2018 to third quarter 2018 is a more relevant comparison than fourth quarter 2017. Quarterly ROAA increased from 0.86% for the three months ended September 30, 2018, to 0.89% for the three months ended December 31, 2018. Quarterly ROAE increased from 8.09% for the three months ended September 30, 2018, to 8.57% for the three months ended December 31, 2018. The net interest margin increased from 3.43% for the third quarter 2018 to 3.50% for the fourth quarter 2018. The efficiency ratio decreased from 64.6% for the third quarter 2018 to 64.4% for the fourth quarter 2018. Non-performing assets to total assets decreased from 0.07% for the three months ended September 30, 2018, to 0.03% for the three months ended December 31, 2018.
- Annual Asset Growth of 18.7% - Total assets surpassed $1.39 billion at December 31, 2018, an increase of $219.6 million or 18.7% since December 31, 2017. Total Assets increased $71.6 million or 21.5% (annualized) since September 30, 2018.
- Annual Loan Growth of 15.4% - Gross loans topped $1.16 billion at December 31, 2018. Net Loans surpassed $1.15 billion at December 31, 2018. Net loans increased $153.8 million or 15.4% since December 31, 2017. Net Loans increased $54.6 million or 19.8% (annualized) since September 30, 2018.
- Annual Deposit Growth 26.9% - Total deposits equaled $1.14 billion at December 31, 2018, an increase of $241.4 million or 26.9% since December 31, 2017. Total Deposits increased $51.7 million or 18.9% (annualized) since September 30, 2018.
- Outstanding Asset Quality – Net charge-offs to average loans (annualized) was 0.06% for the three months ended December 31, 2018, compared to 0.13% for the three months ended December 31, 2017. Non-performing assets represented 0.03% of total assets as of December 31, 2018, compared to 0.09% at December 31, 2017. The Company had no loans 30 days or more past due and no non-accrual loans as of December 31, 2018.
- Improved Funding Composition - Non-interest bearing deposits grew $47.6 million or 27.3% during 2018 and represented 19.5% of total deposits at December 31, 2018. In addition, wholesale funding decreased $13.3 million or 7.2% year-over-year from December 31, 2017 to December 31, 2018. Wholesale funding represented 13.8% of total funding sources at December 31, 2018 compared to 17.9% at December 31, 2017.
- Record Quarterly Net Interest Income – The Company reported Net Interest Income of $11.6 million for the 4th quarter of 2018, a 10.0% increase from $10.6 million for the 4th quarter of 2017. On a year-to-date basis, total funding sources growth has exceeded Net Loan growth by $52.7 million. The Company believes interest income will improve as the balances in interest-bearing deposits in banks are deployed to fund higher yielding loans.
Chris Bergstrom, President and Chief Executive Officer, commented “It was most gratifying to conclude 2018 with strong fourth quarter balance sheet growth, earnings performance and exceptional asset quality. We hired several experienced local banking professionals and expanded our footprint to new locations, including a loan production office in Arlington, a full service branch in Washington, DC, our Tysons Corner, Virginia loan production office which moved into a larger space and converted to a full service branch and our branch in Woodbridge, Virginia. These investments have improved our liquidity and funding composition and positioned the Company well for continued loan growth. We are pleased with the results, but realize that we need to continue to lever these investments to enhance returns.”
Balance Sheet Review
Assets
Total assets were $1.39 billion at December 31, 2018, $1.32 billion at September 30, 2018 and $1.18 billion at December 31, 2017. During the fourth quarter of 2018 assets increased $71.6 million, or 5.4%. Year-over-year asset growth, from December 31, 2017 to December 31, 2018, was $219.6 million, or 18.7%.
Loans
Gross loans were $1.163 billion at December 31, 2018, $1.108 billion at September 30, 2018 and $1.009 billion at December 31, 2017. During the fourth quarter, gross loans grew $54.7 million or 4.9%. Year-over-year gross loans increased $154.5 million, or 15.3% from December 31, 2017 to December 31, 2018.
Investment Securities
The Company’s investment portfolio comprised of held-to-maturity and available-for-sale securities was $97.2 million at December 31, 2018, $97.7 million at September 30, 2018 and $96.3 million at December 31, 2017. Year-over-year the investment portfolio growth, from December 31, 2017 to December 31, 2018, was $963 thousand, or 1.0%. As of December 31, 2018, the Company held $36.2 million of its investment portfolio as held-to-maturity, and $61.1 million as available-for-sale. The Company also had restricted securities totaling $7.3 million at December 31, 2018 and September 30, 2018 and $8.4 million at December 31, 2017.
Interest Bearing Deposits in Banks
Interest-bearing deposits in banks were $93.7 million at December 31, 2018, $75.0 million at September 30, 2018 and $30.9 million at December 31, 2017. The higher cash balances at the period ending December 31, 2018 are a result of the deposit growth and will continue to be deployed into higher earning assets.
Deposits
Total deposits were $1.138 billion at December 31, 2018, $1.087 billion at September 30, 2018 and $896.9 million at December 31, 2017. During the fourth quarter, deposits grew $51.7 million or 4.8%. Year-over-year deposit growth, from December 31, 2017 to December 31, 2018, was $241.4 million, or 26.9%. Core customer funding was $1.050 billion at December 31, 2018, $1.008 billion at September 30, 2018 and $829.8 million at December 31, 2017. Year-over-year core customer funding sources, which include ICS and CDARs, increased by $219.8 million, or 26.5%, from December 31, 2017 to December 31, 2018. The Company continues to focus on the growth of core deposits.
QwickRate certificates of deposit were $20.6 million at December 31, 2018, $24.1 million at September 30, 2018 and $24.7 million at December 31, 2017. Year-over-year QwickRate certificates of deposit decreased $4.1 million from December 31, 2017 to December 31, 2018. ICS deposits were $135.1 million at December 31, 2018, $94.1 million at September 30, 2018 and $65.3 million at December 31, 2017. Year-over-year, ICS deposits increased $69.8 million from December 31, 2017 to December 31, 2018. CDARs were $112.2 million at December 31, 2018, $112.9 million at September 30, 2018 and $77.5 million at December 31, 2017. Year-over-year CDARs increased $34.7 million from December 31, 2017 to December 31, 2018. Brokered deposits were $68.2 million at December 31, 2018, $55.0 million at September 30, 2018 and $42.4 million at December 31, 2017. Brokered deposits increased $25.8 million from December 31, 2017 to December 31, 2018. Brokered deposits were used to replace certain FHLB advances at more attractive rates.
Borrowings
Total borrowings, consisting of Federal Home Loan Bank advances and Federal funds purchased, were $83.5 million at December 31, 2018, $69.0 million at September 30, 2018 and $118.5 million at December 31, 2017. Total borrowings decreased $35.0 million, or 29.5%, from December 31, 2017 to December 31, 2018. Federal Home Loan Bank advances were $68.5 million at December 31, 2018, $69.0 million at September 30, 2018 and $108.5 million at December 31, 2017. The 29.5% decrease year-over-year 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 December 31, 2018 and September 30, 2018 and $24.5 million at December 31, 2017. The notes qualify as Tier 2 capital for the Company for regulatory purposes.
Shareholders’ Equity and Capital Levels
Total shareholders’ equity was $142.0 million at December 31, 2018, $138.0 million at September 30, 2018 and $128.9 million at December 31, 2017. Year-over-year shareholders’ equity increased by $13.2 million, or 10.2%. Total common shares outstanding increased from 12,824,233, including 85,007 unvested shares, at December 31, 2017, to 12,900,125, including 86,400 unvested shares, at December 31, 2018.
The Company’s capital ratios remain well above regulatory minimums for well capitalized banks. As of December 31, 2018, the Company’s total risk-based capital ratio was 13.9%, compared to 14.5% at December 31, 2017.
Income Statement Review
Net Interest Income
Net interest income, the Company’s primary source of revenue, was $11.6 million for the three months ended December 31, 2018, up 10.0% from $10.6 million for the three months ended December 31, 2017. The net interest margin was 3.50% for the three months ended December 31, 2018 as compared to 3.68% for the three months ended December 31, 2017. Average net loans increased $147.1 million compared to the three months ended December 31, 2017, with a 22 basis point increase in yield. Average interest-bearing deposits in other banks increased $30.9 million compared to the three months ended December 31, 2017, with a 91 basis point increase in yield. Higher interest-bearing deposit balances continue to be deployed into higher earning assets. The average cost of interest bearing liabilities increased 57 basis points when comparing the quarter ended December 31, 2017 to the quarter ended December 31, 2018. Average interest bearing deposits increased $158.0 million with a 63 basis point increase. During 2018, the Federal Reserve increased rates by 100 basis points to a target of 2.25% to 2.50%. The increase in short-term interest rates continues to have an impact on the cost of deposits.
For the year ended December 31, 2018, net interest income was $43.7 million, up 7.8% from $40.5 million for the year ended December 31, 2017. The net interest margin was 3.51% during year ended December 31, 2018, compared to 3.72% during the same period in 2017. The increase in the cost of liabilities during 2018 was related to a full year of interest expense related to the Company’s issuance of subordinated debt versus six months of expense in 2017 as well as increased cost on interest bearing liabilities. Despite the decline in the net interest margin over the past year, net interest income increased by 7.8% during 2018, compared to the twelve months ended December 31, 2017, resulting primarily from a $155.4 million, or 14.3%, increase in average earning assets during 2018, compared to the same period in 2017.
Provision for Loan Losses
The Company had a $403 thousand provision for loan losses for the three months ended December 31, 2018, compared to a provision of $235 thousand for the same period in 2017. The Company had $180 thousand in net loan charge-offs during the fourth quarter of 2018, compared to net loan charge-offs of $324 thousand in the fourth quarter of 2017.
The Company recognized a provision for loan losses of $1.1 million for the year ended December 31, 2018, compared to a provision of $1.4 million for the same period in 2017. The Company reported $265 thousand in net loan charge-offs in 2018, compared to $655 thousand in net loan charge-offs during 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 December 31, 2018, the Company reported total noninterest income of $303 thousand, compared to $266 thousand during the three months ended December 31, 2017. Service charges on deposit accounts increased $38 thousand, or 37.6%, for the three months ended December 31, 2018 as compared to the same period in the prior year. Other service charges and fees increased $16 thousand for the three months ended December 31, 2018 as compared to the same period in the prior year. The increase in other service charges and fees was related to higher fees earned on CDARs balances.
The Company reported total noninterest income of $1.2 million for both the years ended December 31, 2018 and December 31, 2017. Service charges on deposit accounts increased $125 thousand, or 32.6%, for the year ended December 31, 2018 as compared to the same period in the prior year. Other service charges and fees increased $89 thousand for the year ended December 31, 2018 as compared to the same period in the prior year. In 2017, we reported gains on sales of securities totaling $134 thousand. There was no gain on sale of securities in 2018.
Noninterest Expense
For the three months ended December 31, 2018, salaries and employee benefits expense increased 23.1% to $4.9 million, compared to $4.0 million for the same period in 2017. All other noninterest expenses increased by 15.9%, or $382 thousand, during the fourth quarter of 2018, compared to the same period in 2017.
For the year ended December 31, 2018, salaries and employee benefits expense increased by 23.7%, to $18.3 million, compared to $14.8 million during the same period in 2017. All other operating expenses increased by 9.6%, or $889 thousand, to $10.2 million, for the twelve months ended 2018, compared to $9.3 million during the twelve months ended 2017.
The increase in salaries and benefits for both the three and twelve month periods ended December 31, 2018 was primarily attributable to the increased employee count year-over-year, including staff for: expansion of our Arlington office space owing to growth, our full service branch in Washington, DC, our branch in Woodbridge, Virginia and our Tysons Corner, Virginia loan production office which moved into a larger space and converted to a branch. 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
The Company had no non-accrual loans and no loans 30 days or more past due as of December 31, 2018. As of December 31, 2017, non-accrual loans totaled $639 thousand and there were $1.2 million in loans 30-89 days past due and still accruing interest. Non-performing assets were 0.03% of total assets at December 31, 2018, compared to 0.09% at December 31, 2017. The Company’s allowance for loan losses covered non-performing loans by 14.0 times as of December 31, 2017.
Troubled debt restructurings were $853 thousand at December 31, 2018, compared to $495 thousand at December 31, 2017. All troubled debt restructurings were performing in accordance with modified terms as of December 31, 2018. The Company had $379 thousand in other real estate owned as of December 31, 2018, September 30, 2018 and December 31, 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 eight full-service banking centers located in Reston, Leesburg, Arlington Alexandria, Tysons Corner and Woodbridge, Virginia; Rockville, Maryland; Washington, DC and one loan production office in Arlington, 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 Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Selected Balance Sheet Data | ||||||||||||||||
Cash and cash equivalents | $ | 7,853 | $ | 7,256 | 7,853 | 7,256 | ||||||||||
Total investment securitites | 104,635 | 104,716 | 104,635 | 104,716 | ||||||||||||
Total loans, net of deferred fees | 1,161,455 | 1,006,872 | 1,161,455 | 1,006,872 | ||||||||||||
Allowance for loan losses | 9,731 | 8,927 | 9,731 | 8,927 | ||||||||||||
Total assets | 1,394,621 | 1,175,025 | 1,394,621 | 1,175,025 | ||||||||||||
Non-interest bearing demand deposits | 222,299 | 174,686 | 222,299 | 174,686 | ||||||||||||
Interest bearing deposits | 916,069 | 722,255 | 916,069 | 722,255 | ||||||||||||
Total deposits | 1,138,368 | 896,941 | 1,138,368 | 896,941 | ||||||||||||
Shareholders' equity | 142,018 | 128,867 | 142,018 | 128,867 | ||||||||||||
Summary Results of Operations | ||||||||||||||||
Interest income | $ | 16,063 | $ | 13,211 | $ | 57,890 | $ | 49,318 | ||||||||
Interest expense | 4,415 | 2,621 | 14,190 | 8,793 | ||||||||||||
Net interest income | 11,648 | 10,590 | 43,700 | 40,525 | ||||||||||||
Provision for loan losses | 403 | 235 | 1,069 | 1,380 | ||||||||||||
Net interest income after provision for loan losses | 11,245 | 10,355 | 42,631 | 39,145 | ||||||||||||
Noninterest income | 303 | 266 | 1,237 | 1,229 | ||||||||||||
Noninterest expense | 7,702 | 6,398 | 28,522 | 24,126 | ||||||||||||
Net income before income taxes | 3,846 | 4,223 | 15,346 | 16,248 | ||||||||||||
Net income | 3,031 | 1,118 | 12,174 | 8,984 | ||||||||||||
Per share Data and Shares Outstanding | ||||||||||||||||
Earnings per share - basic | $ | 0.24 | $ | 0.09 | $ | 0.95 | $ | 0.70 | ||||||||
Earnings per share - diluted | $ | 0.22 | $ | 0.08 | $ | 0.89 | $ | 0.66 | ||||||||
Tangible book value per share | $ | 11.01 | $ | 10.05 | $ | 11.01 | $ | 10.05 | ||||||||
Weighted average common shares (basic) | 12,803,202 | 12,738,895 | 12,783,717 | 12,715,999 | ||||||||||||
Weighted average common shares (diluted) | 13,527,479 | 13,498,593 | 13,531,858 | 13,486,450 | ||||||||||||
Common shares outstanding at end of period | 12,900,125 | 12,824,233 | 12,900,125 | 12,824,233 | ||||||||||||
Performance Ratios | ||||||||||||||||
Return on average assets (annualized) | 0.89 | % | 0.38 | % | 0.95 | % | 0.80 | % | ||||||||
Return on average equity (annualized) | 8.57 | % | 3.40 | % | 8.98 | % | 7.14 | % | ||||||||
Net interest margin | 3.50 | % | 3.68 | % | 3.51 | % | 3.72 | % | ||||||||
Noninterest income as a percentage of average assets (annualized) | 0.09 | % | 0.09 | % | 0.10 | % | 0.11 | % | ||||||||
Noninterest expense to average assets (annualized) | 2.26 | % | 2.16 | % | 2.23 | % | 2.15 | % | ||||||||
Efficiency ratio | 64.4 | % | 58.9 | % | 63.5 | % | 57.8 | % | ||||||||
Asset Quality | ||||||||||||||||
Non-performing assets to total assets | 0.03 | % | 0.09 | % | 0.03 | % | 0.09 | % | ||||||||
Non-performing loans to total loans | 0.00 | % | 0.06 | % | 0.00 | % | 0.06 | % | ||||||||
Allowance for loan losses to non-performing loans | N/M | 14.0x | N/M | 14.0x | ||||||||||||
Allowance for loan losses to total loans | 0.84 | % | 0.89 | % | 0.84 | % | 0.89 | % | ||||||||
Net charge-offs to average loans (annualized) | 0.06 | % | 0.13 | % | 0.03 | % | 0.07 | % | ||||||||
Loans 30-89 days past due and accruing interest | $ | - - | $ | 1,189 | $ | - - | $ | 1,189 | ||||||||
Non-accrual loans | $ | - - | $ | 639 | $ | - - | $ | 639 | ||||||||
Other real estate owned | $ | 379 | $ | 379 | $ | 379 | $ | 379 | ||||||||
Non-performing assets (1) | $ | 379 | $ | 1,018 | $ | 379 | $ | 1,018 | ||||||||
Troubled debt restructurings (total) | $ | 853 | $ | 495 | $ | 853 | $ | 495 | ||||||||
Performing in accordance with modified terms | $ | 853 | $ | 495 | $ | 853 | $ | 495 | ||||||||
Not performing in accordance with modified terms | $ | - - | $ | - - | $ | - - | $ | - - | ||||||||
Capital Ratios | ||||||||||||||||
Tangible equity / tangible assets | 10.2 | % | 11.0 | % | 10.2 | % | 11.0 | % | ||||||||
Total risk-based capital ratio | 13.9 | % | 14.5 | % | 13.9 | % | 14.5 | % | ||||||||
Tier 1 risk-based capital ratio | 11.2 | % | 11.5 | % | 11.2 | % | 11.5 | % | ||||||||
Leverage ratio | 11.2 | % | 11.5 | % | 11.2 | % | 11.5 | % | ||||||||
Common equity tier 1 ratio | 11.2 | % | 11.0 | % | 11.2 | % | 11.0 | % | ||||||||
Other Information | ||||||||||||||||
Number of full time equivalent employees | 140 | 125 | 140 | 125 | ||||||||||||
# Full service branch offices | 8 | 5 | 8 | 5 | ||||||||||||
# Loan production or limited service branch offices | 1 | 3 | 1 | 3 |
(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 | ||||||||||||||||||
December 31, | September 30, | December 31, | Last Three | Year Over | ||||||||||||||
2018 | 2018 | 2017 | Months | Year | ||||||||||||||
Assets | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Cash and due from banks | $ | 7,853 | $ | 9,918 | $ | 7,256 | -20.8 | % | 8.2 | % | ||||||||
Federal funds sold | 126 | 96 | 40 | 31.3 | % | 215.0 | % | |||||||||||
Interest-bearing deposits in banks | 93,716 | 74,982 | 30,873 | 25.0 | % | 203.6 | % | |||||||||||
Securities available-for-sale, at fair value | 61,055 | 60,915 | 54,699 | 0.2 | % | 11.6 | % | |||||||||||
Securities held-to-maturity, fair value of $35,589 at 12/31/2018, $35,730 at 9/30/2018 and $41,500 at 12/31/2017 | 36,177 | 36,803 | 41,570 | -1.7 | % | -13.0 | % | |||||||||||
Restricted securities, at cost | 7,283 | 7,339 | 8,447 | -0.8 | % | -13.8 | % | |||||||||||
Equity securitites, at fair value | 120 | 102 | - - | 17.6 | % | N/M | ||||||||||||
Loans, net of allowance for loan losses of $9,731 at 12/31/2018, $9,508 at 9/30/2018 and $8,927 at 12/31/2017 | 1,151,724 | 1,097,102 | 997,945 | 5.0 | % | 15.4 | % | |||||||||||
Bank premises and equipment, net | 2,852 | 2,561 | 2,480 | 11.4 | % | 15.0 | % | |||||||||||
Accrued interest receivable | 3,623 | 3,613 | 3,263 | 0.3 | % | 11.0 | % | |||||||||||
Bank owned life insurance | 19,617 | 19,485 | 19,093 | 0.7 | % | 2.7 | % | |||||||||||
Other real estate owned | 379 | 379 | 379 | 0.0 | % | 0.0 | % | |||||||||||
Other assets | 10,096 | 9,733 | 8,980 | 3.7 | % | 12.4 | % | |||||||||||
Total assets | $ | 1,394,621 | $ | 1,323,028 | $ | 1,175,025 | 5.4 | % | 18.7 | % | ||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||
Liabilities | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Non-interest bearing demand deposits | $ | 222,299 | $ | 217,430 | $ | 174,686 | 2.2 | % | 27.3 | % | ||||||||
Interest bearing demand deposits | 367,656 | 346,146 | 258,306 | 6.2 | % | 42.3 | % | |||||||||||
Savings deposits | 6,987 | 6,724 | 6,709 | 3.9 | % | 4.1 | % | |||||||||||
Time deposits | 541,426 | 516,368 | 457,240 | 4.9 | % | 18.4 | % | |||||||||||
Total deposits | 1,138,368 | 1,086,668 | 896,941 | 4.8 | % | 26.9 | % | |||||||||||
Federal funds purchased | 15,001 | - - | 10,001 | N/M | 50.0 | % | ||||||||||||
Federal Home Loan Bank advances | 68,500 | 69,000 | 108,500 | -0.7 | % | -36.9 | % | |||||||||||
Subordinated Debt | 24,581 | 24,568 | 24,531 | 0.1 | % | 0.2 | % | |||||||||||
Accrued interest payable | 1,243 | 843 | 996 | 47.4 | % | 24.8 | % | |||||||||||
Other liabilities | 4,910 | 3,974 | 5,189 | 23.6 | % | -5.4 | % | |||||||||||
Total liabilities | 1,252,603 | 1,185,053 | 1,046,158 | 5.7 | % | 19.7 | % | |||||||||||
Shareholders' Equity | ||||||||||||||||||
Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued | - - | - - | - - | - - | - - | |||||||||||||
Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued | - - | - - | - - | - - | - - | |||||||||||||
Common stock, voting, par value $0.01 per share; authorized 20,000,000 shares; issued and outstanding, 12,900,125 at 12/31/2018 including 86,400 unvested shares, 12,888,350 shares at 9/30/2018 including 86,725 unvested shares and 12,824,233 at 12/31/17, including 85,007 unvested shares | 128 | 128 | 127 | 0.0 | % | 0.8 | % | |||||||||||
Additional paid-in capital | 85,127 | 84,828 | 83,867 | 0.4 | % | 1.5 | % | |||||||||||
Retained earnings | 57,718 | 54,574 | 45,544 | 5.8 | % | 26.7 | % | |||||||||||
Accumulated other comprehensive loss | (955 | ) | (1,555 | ) | (671 | ) | 38.6 | % | -42.3 | % | ||||||||
Total shareholders' equity | 142,018 | 137,975 | 128,867 | 2.9 | % | 10.2 | % | |||||||||||
Total liabilities and shareholders' equity | $ | 1,394,621 | $ | 1,323,028 | $ | 1,175,025 | 5.4 | % | 18.7 | % | ||||||||
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, | |||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
Interest and Dividend Income | ||||||||||||||||||||
Interest and fees on loans | $ | 14,924 | $ | 12,456 | 19.8 | % | $ | 53,716 | $ | 46,667 | 15.1 | % | ||||||||
Interest on investment securities, taxable | 490 | 392 | 25.0 | % | 1,757 | 1,445 | 21.6 | % | ||||||||||||
Interest on investment securities, tax-exempt | 79 | 85 | -7.1 | % | 330 | 269 | 22.7 | % | ||||||||||||
Dividends | 109 | 108 | 0.9 | % | 470 | 417 | 12.7 | % | ||||||||||||
Interest on federal funds sold | 1 | - - | N/M | 1 | - - | N/M | ||||||||||||||
Interest on deposits in banks | 460 | 170 | 170.6 | % | 1,616 | 520 | 210.8 | % | ||||||||||||
Total interest and dividend income | 16,063 | 13,211 | 21.6 | % | 57,890 | 49,318 | 17.4 | % | ||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 3,755 | 1,924 | 95.2 | % | 11,307 | 6,752 | 67.5 | % | ||||||||||||
Federal Home Loan Bank advances | 287 | 324 | -11.4 | % | 1,393 | 1,300 | 7.2 | % | ||||||||||||
Subordinated debt | 372 | 372 | 0.0 | % | 1,487 | 719 | 106.8 | % | ||||||||||||
Other short-term borrowings | 1 | 1 | 0.0 | % | 3 | 22 | -86.4 | % | ||||||||||||
Total interest expense | 4,415 | 2,621 | 68.4 | % | 14,190 | 8,793 | 61.4 | % | ||||||||||||
Net interest income | 11,648 | 10,590 | 10.0 | % | 43,700 | 40,525 | 7.8 | % | ||||||||||||
Provision for loan losses | 403 | 235 | 71.5 | % | 1,069 | 1,380 | -22.5 | % | ||||||||||||
Net interest income after provision for loan losses | 11,245 | 10,355 | 8.6 | % | 42,631 | 39,145 | 8.9 | % | ||||||||||||
Noninterest Income | ||||||||||||||||||||
Service charges on deposit accounts | 139 | 101 | 37.6 | % | 508 | 383 | 32.6 | % | ||||||||||||
Bank owned life insurance | 133 | 137 | -2.9 | % | 525 | 553 | -5.1 | % | ||||||||||||
Other service charges and fees | 44 | 28 | 57.1 | % | 194 | 105 | 84.8 | % | ||||||||||||
Gain on sale of securities | - - | - - | N/M | - - | 134 | N/M | ||||||||||||||
Other real estate owned | 7 | - - | N/M | 23 | - - | N/M | ||||||||||||||
Gain on sale of fixed assets | - - | - - | N/M | - - | 1 | N/M | ||||||||||||||
Other operating income (loss) | (20 | ) | - - | N/M | (13 | ) | 53 | -124.5 | % | |||||||||||
Total noninterest income | 303 | 266 | 13.9 | % | 1,237 | 1,229 | 0.7 | % | ||||||||||||
Noninterest Expenses | ||||||||||||||||||||
Salaries and employee benefits | 4,914 | 3,992 | 23.1 | % | 18,327 | 14,820 | 23.7 | % | ||||||||||||
Occupancy expense of premises | 529 | 499 | 6.0 | % | 2,030 | 1,843 | 10.1 | % | ||||||||||||
Furniture and equipment expenses | 351 | 315 | 11.4 | % | 1,307 | 1,183 | 10.5 | % | ||||||||||||
Other real estate owned expenses | 2 | 20 | N/M | 5 | 20 | N/M | ||||||||||||||
Other operating expenses | 1,906 | 1,572 | 21.2 | % | 6,853 | 6,260 | 9.5 | % | ||||||||||||
Total noninterest expenses | 7,702 | 6,398 | 20.4 | % | 28,522 | 24,126 | 18.2 | % | ||||||||||||
Income before income taxes | 3,846 | 4,223 | -8.9 | % | 15,346 | 16,248 | -5.6 | % | ||||||||||||
Income tax expense | 815 | 3,105 | -73.8 | % | 3,172 | 7,264 | -56.3 | % | ||||||||||||
Net income | $ | 3,031 | $ | 1,118 | 171.1 | % | $ | 12,174 | $ | 8,984 | 35.5 | % | ||||||||
Earnings Per Share | ||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.09 | 166.7 | % | $ | 0.95 | $ | 0.70 | 35.7 | % | ||||||||
Diluted | $ | 0.22 | $ | 0.08 | 175.0 | % | $ | 0.89 | $ | 0.66 | 34.8 | % | ||||||||
John Marshall Bancorp, Inc. | ||||||||||||||||||||||||||||||||||||||||||
Loan, Deposit and Borrowing Detail (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | Percentage Change | |||||||||||||||||||||||||||||||||||||||
Loans | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 3 Mos | Last 12 Mos | ||||||||||||||||||||||||||||||||||
Mortgage loans on real estate | ||||||||||||||||||||||||||||||||||||||||||
Commercial | $ | 747,342 | 64.2 | % | $ | 683,259 | 61.6 | % | $ | 577,016 | 57.1 | % | 9.4 | % | 29.5 | % | ||||||||||||||||||||||||||
Construction and land development | 204,986 | 17.6 | % | 216,242 | 19.5 | % | 218,538 | 21.7 | % | -5.2 | % | -6.2 | % | |||||||||||||||||||||||||||||
Residential | 143,811 | 12.4 | % | 136,038 | 12.3 | % | 135,791 | 13.5 | % | 5.7 | % | 5.9 | % | |||||||||||||||||||||||||||||
Total mortgage loans on real estate | $ | 1,096,139 | 94.2 | % | $ | 1,035,539 | 93.4 | % | $ | 931,345 | 92.3 | % | 5.9 | % | 17.7 | % | ||||||||||||||||||||||||||
Commercial loans | 65,815 | 5.7 | % | 71,258 | 6.4 | % | 76,573 | 7.6 | % | -7.6 | % | -14.0 | % | |||||||||||||||||||||||||||||
Consumer loans | 1,198 | 0.1 | % | 1,686 | 0.2 | % | 777 | 0.1 | % | -28.9 | % | 54.2 | % | |||||||||||||||||||||||||||||
Total loans | $ | 1,163,152 | 100.0 | % | $ | 1,108,483 | 100.0 | % | $ | 1,008,695 | 100.0 | % | 4.9 | % | 15.3 | % | ||||||||||||||||||||||||||
Less: Allowance for loan losses | (9,731 | ) | (9,508 | ) | (8,927 | ) | ||||||||||||||||||||||||||||||||||||
Net deferred loan fees | (1,697 | ) | (1,873 | ) | (1,823 | ) | ||||||||||||||||||||||||||||||||||||
Net loans | $ | 1,151,724 | $ | 1,097,102 | $ | 997,945 | ||||||||||||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | Percentage Change | |||||||||||||||||||||||||||||||||||||||
Deposits | $ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 3 Mos | Last 12 Mos | ||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 222,299 | 19.5 | % | $ | 217,430 | 20.0 | % | $ | 174,686 | 19.5 | % | 2.2 | % | 27.3 | % | ||||||||||||||||||||||||||
Interest-bearing demand deposits: | ||||||||||||||||||||||||||||||||||||||||||
NOW accounts | 44,884 | 3.9 | % | 50,541 | 4.6 | % | 33,505 | 3.7 | % | -11.2 | % | 34.0 | % | |||||||||||||||||||||||||||||
Money market accounts | 186,626 | 16.4 | % | 200,503 | 18.5 | % | 159,508 | 17.8 | % | -6.9 | % | 17.0 | % | |||||||||||||||||||||||||||||
Savings accounts | 6,987 | 0.6 | % | 6,724 | 0.6 | % | 6,709 | 0.8 | % | 3.9 | % | 4.1 | % | |||||||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||||||||||||||||||
$250,000 or more | 232,491 | 20.4 | % | 217,549 | 20.0 | % | 199,161 | 22.2 | % | 6.9 | % | 16.7 | % | |||||||||||||||||||||||||||||
Less than $250,000 | 108,911 | 9.6 | % | 107,900 | 9.9 | % | 113,374 | 12.6 | % | 0.9 | % | -3.9 | % | |||||||||||||||||||||||||||||
QwickRate® Certificates of deposit | 20,642 | 1.8 | % | 24,076 | 2.2 | % | 24,735 | 2.8 | % | -14.3 | % | -16.5 | % | |||||||||||||||||||||||||||||
ICS® | 135,135 | 11.9 | % | 94,095 | 8.7 | % | 65,293 | 7.3 | % | 43.6 | % | 107.0 | % | |||||||||||||||||||||||||||||
CDARS® | 112,196 | 9.9 | % | 112,870 | 10.4 | % | 77,531 | 8.6 | % | -0.6 | % | 44.7 | % | |||||||||||||||||||||||||||||
Brokered deposits | 68,197 | 6.0 | % | 54,980 | 5.1 | % | 42,439 | 4.7 | % | 24.0 | % | 60.7 | % | |||||||||||||||||||||||||||||
Total deposits | $ | 1,138,368 | 100.0 | % | $ | 1,086,668 | 100.0 | % | $ | 896,941 | 100.0 | % | 4.8 | % | 26.9 | % | ||||||||||||||||||||||||||
Borrowings | ||||||||||||||||||||||||||||||||||||||||||
Federal funds purchased | $ | 15,001 | 13.9 | % | $ | - - | 0.0 | % | $ | 10,001 | 7.0 | % | N/M | 50.0 | % | |||||||||||||||||||||||||||
Federal Home Loan Bank advances | 68,500 | 63.4 | % | 69,000 | 73.7 | % | 108,500 | 75.9 | % | -0.7 | % | -36.9 | % | |||||||||||||||||||||||||||||
Subordinated debt | 24,581 | 22.7 | % | 24,568 | 26.3 | % | 24,531 | 17.2 | % | 0.1 | % | 0.2 | % | |||||||||||||||||||||||||||||
Total borrowings | $ | 108,082 | 100.0 | % | $ | 93,568 | 100.0 | % | $ | 143,032 | 100.0 | % | 15.5 | % | -24.4 | % | ||||||||||||||||||||||||||
Total deposits and borrowings | $ | 1,246,450 | $ | 1,180,236 | $ | 1,039,973 | 5.6 | % | 19.9 | % | ||||||||||||||||||||||||||||||||
Core customer funding sources (1) | $ | 1,049,529 | 84.2 | % | $ | 1,007,612 | 85.4 | % | $ | 829,767 | 79.8 | % | 4.2 | % | 26.5 | % | ||||||||||||||||||||||||||
Wholesale funding sources (2) | 172,340 | 13.8 | % | 148,056 | 12.5 | % | 185,675 | 17.9 | % | 16.4 | % | -7.2 | % | |||||||||||||||||||||||||||||
Subordinated debt (3) | 24,581 | 2.0 | % | 24,568 | 2.1 | % | 24,531 | 2.4 | % | 0.1 | % | 0.2 | % | |||||||||||||||||||||||||||||
Total funding sources | $ | 1,246,450 | 100.0 | % | $ | 1,180,236 | 100.0 | % | $ | 1,039,973 | 100.0 | % | 5.6 | % | 19.5 | % | ||||||||||||||||||||||||||
(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 December 31, 2018 | Three Months Ended December 31, 2017 | ||||||||||||||||||||||||
Interest | Average | Interest | Average | ||||||||||||||||||||||
Average | Income- | Yields | Average | Income- | Yields | ||||||||||||||||||||
Balance | Expense | /Rates | Balance | Expense | /Rates | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Securities | $ | 104,961 | $ | 678 | 2.56 | % | $ | 104,081 | $ | 585 | 2.23 | % | |||||||||||||
Loans, net of unearned income | 1,134,841 | 14,924 | 5.22 | % | 987,726 | 12,456 | 5.00 | % | |||||||||||||||||
Interest-bearing deposits in other banks | 80,437 | 460 | 2.27 | % | 49,537 | 170 | 1.36 | % | |||||||||||||||||
Federal funds sold | 128 | 1 | 3.10 | % | 59 | - | 0.00 | % | |||||||||||||||||
Total interest-earning assets | $ | 1,320,367 | $ | 16,063 | 4.83 | % | $ | 1,141,403 | $ | 13,211 | 4.59 | % | |||||||||||||
Other assets | 33,632 | 33,469 | |||||||||||||||||||||||
Total assets | $ | 1,353,999 | $ | 1,174,872 | |||||||||||||||||||||
Liabilities & Shareholders' equity | |||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||
NOW accounts | $ | 91,449 | $ | 235 | 1.02 | % | $ | 72,977 | $ | 73 | 0.40 | % | |||||||||||||
Money market accounts | 268,554 | 973 | 1.44 | % | 204,952 | 338 | 0.65 | % | |||||||||||||||||
Savings accounts | 7,302 | 4 | 0.22 | % | 7,482 | 4 | 0.21 | % | |||||||||||||||||
Time deposits | 527,178 | 2,543 | 1.91 | % | 451,037 | 1,509 | 1.33 | % | |||||||||||||||||
Total interest-bearing deposits | $ | 894,483 | $ | 3,755 | 1.67 | % | $ | 736,448 | $ | 1,924 | 1.04 | % | |||||||||||||
Federal funds purchased | $ | 163 | $ | 1 | 2.43 | % | $ | 335 | $ | 1 | 1.18 | % | |||||||||||||
Subordinated debt | 24,573 | 372 | 6.01 | % | 24,523 | 372 | 6.02 | % | |||||||||||||||||
Other borrowed funds | 64,022 | 287 | 1.78 | % | 96,201 | 324 | 1.34 | % | |||||||||||||||||
Total interest-bearing liabilities | $ | 983,241 | $ | 4,415 | 1.78 | % | $ | 857,507 | $ | 2,621 | 1.21 | % | |||||||||||||
Demand deposits and other liabilities | 230,384 | 186,919 | |||||||||||||||||||||||
Total liabilities | $ | 1,213,625 | $ | 1,044,426 | |||||||||||||||||||||
Shareholders' equity | 140,374 | 130,446 | |||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,353,999 | $ | 1,174,872 | |||||||||||||||||||||
Interest rate spread | 3.05 | % | 3.38 | % | |||||||||||||||||||||
Net interest income and margin | $ | 11,648 | 3.50 | % | $ | 10,590 | 3.68 | % | |||||||||||||||||
Twelve Months Ended December 31, 2018 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||||
Interest | Average | Interest | Average | ||||||||||||||||||||||
Average | Income- | Yields | Average | Income- | Yields | ||||||||||||||||||||
Balance | Expense | /Rates | Balance | Expense | /Rates | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Securities | $ | 104,214 | $ | 2,557 | 2.45 | % | $ | 98,170 | $ | 2,131 | 2.17 | % | |||||||||||||
Loans, net of unearned income | 1,056,324 | 53,716 | 5.09 | % | 947,287 | 46,667 | 4.93 | % | |||||||||||||||||
Interest-bearing deposits in other banks | 83,935 | 1,616 | 1.93 | % | 43,662 | 520 | 1.19 | % | |||||||||||||||||
Federal funds sold | 83 | 1 | 1.20 | % | 58 | - | 0.00 | % | |||||||||||||||||
Total interest-earning assets | $ | 1,244,556 | $ | 57,890 | 4.65 | % | $ | 1,089,177 | $ | 49,318 | 4.53 | % | |||||||||||||
Other assets | 32,479 | 32,839 | |||||||||||||||||||||||
Total assets | $ | 1,277,035 | $ | 1,122,016 | |||||||||||||||||||||
Liabilities & Shareholders' equity | |||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||
NOW accounts | $ | 75,301 | $ | 555 | 0.74 | % | $ | 44,269 | $ | 181 | 0.41 | % | |||||||||||||
Money market accounts | 234,173 | 2,577 | 1.10 | % | 201,501 | 1,181 | 0.59 | % | |||||||||||||||||
Savings accounts | 6,953 | 16 | 0.23 | % | 7,250 | 17 | 0.23 | % | |||||||||||||||||
Time deposits | 495,206 | 8,159 | 1.65 | % | 435,923 | 5,373 | 1.23 | % | |||||||||||||||||
Total interest-bearing deposits | $ | 811,633 | $ | 11,307 | 1.39 | % | $ | 688,943 | $ | 6,752 | 0.98 | % | |||||||||||||
Federal funds purchased | $ | 123 | $ | 3 | 2.44 | % | $ | 4,997 | $ | 22 | 0.44 | % | |||||||||||||
Subordinated debt | 24,554 | 1,487 | 6.06 | % | 12,026 | 719 | 5.98 | % | |||||||||||||||||
Other borrowed funds | 87,503 | 1,393 | 1.59 | % | 103,095 | 1,300 | 1.26 | % | |||||||||||||||||
Total interest-bearing liabilities | $ | 923,813 | $ | 14,190 | 1.54 | % | $ | 809,061 | $ | 8,793 | 1.09 | % | |||||||||||||
Demand deposits and other liabilities | 217,712 | 187,197 | |||||||||||||||||||||||
Total liabilities | $ | 1,141,525 | $ | 996,258 | |||||||||||||||||||||
Shareholders' equity | 135,510 | 125,758 | |||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,277,035 | $ | 1,122,016 | |||||||||||||||||||||
Interest rate spread | 3.11 | % | 3.44 | % | |||||||||||||||||||||
Net interest income and margin | $ | 43,700 | 3.51 | % | $ | 40,525 | 3.72 | % | |||||||||||||||||
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