Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries John Marshall Bancorp, Inc. Reports 24.9% Annual Earnings Increase, 14.8% Quarterly Loan Growth Annualized and Superior Asset Quality By: John Marshall via Business Wire January 18, 2023 at 09:00 AM EST John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported its financial results for the three and twelve months ended December 31, 2022. Fourth Quarter and Year-to-Date Highlights Record Earnings – The Company reported its sixteenth consecutive quarter of record earnings. Net income of $8.2 million for the fourth quarter of 2022 represented a $655 thousand or 8.7% increase over the $7.5 million reported for the fourth quarter of 2021. Earnings per diluted share for the three months ended December 31, 2022 were $0.58, a 7.4% increase over the $0.54 reported for the three months ended December 31, 2021. The Company reported record net income of $31.8 million for the year ended December 31, 2022, a $6.3 million or 24.9% increase over the $25.5 million reported for the same period of 2021. Earnings per diluted share for the year ended December 31, 2022 were $2.25, a 22.9% increase over the $1.83 reported for the same period of 2021. Robust Core Loan Growth – Excluding Paycheck Protection Program (“PPP”) loans, gross loans net of unearned income (“Core Loans”) grew $190.6 million or 11.9% from December 31, 2021 to December 31, 2022. Core Loans increased $64.4 million during the quarter ended December 31, 2022 or 14.8% annualized from September 30, 2022. The Company remains steadfast in adhering to our strict underwriting standards to maintain pristine asset quality. Consistently Strong Returns – Annualized Return on Average Assets (“ROAA”) was 1.40% and annualized Return on Average Equity (“ROAE”) was 15.65% for the three months ended December 31, 2022. ROAA and ROAE were 1.41% and 14.52%, respectively, for the three months ended December 31, 2021. Commitment to Cost Conscious Growth – Revenues (net interest income plus non-interest income) grew 16.8% annualized for the three months ended December 31, 2022 relative to the three months ended December 31, 2021. Over the same period, overhead decreased 11.9% annualized. The ratio of annualized non-interest expense to average assets was 1.27% for the fourth quarter of 2022 compared to 1.44% for the fourth quarter of 2021. The efficiency ratio for the fourth quarter of 2022 was 40.9% compared to 43.9% for the fourth quarter of 2021. No Non-performing Assets; No Loans More Than 30 Days Past Due – For the thirteenth consecutive quarter, the Company had no nonperforming loans, no other real estate owned, and no loans 30 days or more past due. There were no charge-offs during the quarter. The Company believes its allowance for loan losses is appropriate for the inherent risks and uncertainties associated with the portfolio. Chris Bergstrom, President and Chief Executive Officer, commented, “2022 was a remarkable year for John Marshall. We registered our shares with the SEC, listed our stock on Nasdaq, gained inclusion in the Russell 2000 Index, refinanced our subordinated debt to a lower rate, paid our first cash dividend, broadened our customer service and fee income capabilities by implementing an interest rate swap program, decreased overhead, maintained our outstanding asset quality and delivered our fourth consecutive year of record earnings. On behalf of the Company, I want to express appreciation for our employees and customers who made these many strategic goals reality. Looking forward, each year holds its own set of challenges and early signs indicate that 2023 will be no different. As interest rates have risen, depositors have many investment alternatives from which to choose and, as a result, deposit costs are rising. Certain economic data seem to point to a recession, which could moderate loan growth and impact borrowers’ ability to service their loans. Despite these potential hurdles, I remain confident in our people and our business model. We believe with our liquid, well-capitalized balance sheet, strong asset quality, robust underwriting and conservative culture that we are well prepared to manage for the potential challenges ahead.” Balance Sheet and Credit Quality Total assets were $2.35 billion at December 31, 2022, $2.31 billion at September 30, 2022 and $2.15 billion at December 31, 2021. During the fourth quarter of 2022, assets increased $42.7 million or 7.4% annualized primarily due to an increase in loans. Asset growth from December 31, 2021 to December 31, 2022 was $198.9 million or 9.3%. Total loans, net of unearned income, increased by 7.4% to $1.79 billion at December 31, 2022, compared to $1.67 billion at December 31, 2021. The year-over-year increase in the loan portfolio was primarily attributable to growth in the investor real estate and residential mortgage portfolios. Total loans, net of unearned income, increased $64.4 million during the quarter ended December 31, 2022 or 14.8% annualized from $1.73 billion at September 30, 2022. The increase in loans was primarily attributable to growth in the investor real estate, residential mortgage, and commercial owner-occupied real estate loan portfolios. The Company’s portfolio of investments in fixed income securities was $457.0 million at December 31, 2022, $467.1 million at September 30, 2022, and $344.8 million at December 31, 2021. All but $11.3 million of the fixed income portfolio is backed by the explicit or implicit guarantees of the United States Government or one of its agencies. Nearly 70% of the fixed income portfolio is invested in amortizing investments, which provides the Company with a source of steady cash flow to reinvest each month. For 2023, the Company anticipates primarily reinvesting fixed income cash flows into loans. At December 31, 2022, the fixed income portfolio had an estimated weighted average life of 4.5 years. The Company’s balance sheet remains highly liquid. In addition to deposits in banks and cash flows from fixed income securities, liquidity needs are also met with cash and cash equivalents and unencumbered securities classified as available-for-sale. Liquid assets totaled $335.8 million as of December 31, 2022 compared to $299.3 million at December 31, 2021. These amounts represented 14.3% and 16.8% of total assets as of December 31, 2022 and December 31, 2021, respectively. In addition, the Bank had secured borrowing capacity of $388 million at December 31, 2022. Total deposits were $2.07 billion at December 31, 2022, $2.06 billion at September 30, 2022, and $1.88 billion at December 31, 2021. Deposit growth was 9.9% during the past twelve months, as time deposits grew 22.3% and interest-bearing demand deposits grew 9.2%. Total borrowings, defined as federal funds purchased, Federal Home Loan Bank advances, and subordinated debt, increased by $25.5 million to $50.1 million at December 31, 2022 compared to $24.6 million at September 30, 2022. The increase during the quarter was due to $25.5 million in federal funds purchased. Federal Home Loan Bank advances decreased from $18.0 million at December 31, 2021 to zero at December 31, 2022 and were unchanged from September 30, 2022. Shareholders’ equity increased $4.3 million or 2.1% to $212.8 million at December 31, 2022 compared to $208.5 million at December 31, 2021, as a result of increases in retained earnings and additional paid-in capital, which were partially offset by the increase in the unrealized loss on our available-for-sale investment portfolio. Book value per share was $15.09 as of December 31, 2022 compared to $15.17 as of December 31, 2021. The year-over-year change in book value per share was primarily due to increased accumulated other comprehensive loss, increased share count from shareholder option exercises and restricted share award issuances, and cash dividends paid, partially offset by the Company’s earnings over the previous twelve months. The increase in accumulated other comprehensive loss was primarily attributable to increases in unrealized losses on our available-for-sale investment portfolio due to market value changes as a result of rising interest rates. Book value per share, excluding accumulated other comprehensive loss (a non-GAAP financial measure which is defined in the tables below) was $17.13 at December 31, 2022 compared to $15.20 at December 31, 2021. The Bank’s capital ratios remain well above regulatory thresholds for well-capitalized banks. As of December 31, 2022, the Bank’s total risk-based capital ratio was 15.6%, compared to 15.3% at December 31, 2021. The Company recorded no net charge-offs during the fourth quarter of 2022, the third quarter of 2022, and the fourth quarter of 2021. As of December 31, 2022, the Company had no non-accrual loans, no loans more than 30 days past due, and no other real estate owned assets. At December 31, 2022, the allowance for loan losses was $20.2 million or 1.13% of outstanding loans, net of unearned income, compared to $20.0 million or 1.20% of outstanding loans, net of unearned income, at September 30, 2022. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, was primarily due to changes in the loan portfolio’s composition as well as net changes in qualitative adjustments. As of December 31, 2022, the Company continued to account for its allowance using an incurred loss model. Beginning on January 1, 2023, and in all subsequent periods, the Company will determine its allowance using the current expected credit losses standard (ASC 326). Income Statement Review Quarterly Results Net income for the fourth quarter of 2022 increased $655 thousand or 8.7% to $8.2 million compared to $7.5 million for the fourth quarter of 2021. Net interest income for the fourth quarter of 2022 increased $536 thousand or 3.2% compared to the fourth quarter of 2021, driven primarily by higher yields on interest-earning assets and growth in the Company’s loan and investment portfolios. The yield on interest earning assets was 4.10% for the fourth quarter of 2022 compared to 3.56% for the same period in 2021. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and investment portfolios and deposits in banks as a result of increases in interest rates during the year. The cost of interest-bearing liabilities was 1.53% for the fourth quarter of 2022 compared to 0.48% for the same quarter of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to a 1.08% increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW, and savings deposit accounts during the year. The annualized net interest margin for the fourth quarter of 2022 was 3.05% as compared to 3.23% for the same quarter of the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company’s loan and investment portfolios. The Company recorded a $175 thousand provision for loan losses for the fourth quarter of 2022, compared to a $325 thousand provision for the fourth quarter of 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy. Non-interest income increased $205 thousand or 40.0% during the fourth quarter of 2022 compared to the fourth quarter of 2021. The increase in non-interest income was primarily due to swap fee income of $127 thousand recognized during the quarter on the Company’s first back-to-back loan interest rate swap (“swap”). The Company enters into swaps with commercial loan customers to provide a facility for customers to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in exact offsetting terms to swaps that the Company enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities in the Consolidated Balance Sheet. The increase in non-interest income was also attributable to mark-to-market adjustments of $35 thousand resulting from an increase in value of investments related to the Company’s nonqualified deferred compensation plan, and increases in services charges and fees on deposit accounts. The increase was partially offset by modest decreases in insurance commissions and bank owned life insurance (“BOLI”) income. Non-interest expense decreased $230 thousand or 3.0% for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. The decrease in non-interest expense was primarily due to decreases in salaries and employee benefits expense, occupancy expense, furniture and equipment expense, marketing expense, and a release in unfunded commitment reserves during the quarter. The decrease in salaries and employee benefits was driven by a decrease in incentive and deferred compensation expense when compared to the prior year quarter due to changes in staffing. Two of the Company’s former senior executive vice presidents became advisors to the Chief Executive Officer effective June 1, 2022. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The decrease in marketing expense was primarily due to lower marketing vendor related expenses incurred. The release in unfunded commitment reserves was primarily due to a decrease in unfunded commitment balances year-over-year as a result of credit line utilization. The decrease in non-interest expense was partially offset by increases in data processing fees and professional service fees. The increase in data processing fees was due to new investments in technology solutions to support our operations. The Company regularly evaluates technology and invests in applications enabling greater efficiencies or customer experience. The increase in professional service fees was due to expenses incurred in conjunction with the back-to-back loan interest rate swap, as well as increased vendor services supporting our public company reporting requirements that did not exist in the prior year. For the three months ended December 31, 2022, annualized non-interest expense to average assets was 1.27% compared to 1.44% for the three months ended December 31, 2021. The decrease was primarily due to lower salaries and employee benefit expense coupled with continued cost consciousness. For the three months ended December 31, 2022, the annualized efficiency ratio was 40.9% compared to 43.9% for the three months ended December 31, 2021. The decrease was primarily due to increases in net interest income and non-interest income as well as a decrease in non-interest expense. Year-to-Date Results Net income for the year ended December 31, 2022 increased $6.3 million or 24.9% to $31.8 million compared to $25.5 million for the year ended December 31, 2021. The results for the year ended December 31, 2022 reflect a combination of the impact of an increase in net interest income, a decrease in provision for loan loss expense, and a decrease in non-interest expense, which were partially offset by a decrease in non-interest income. Net interest income for the year ended December 31, 2022 increased $4.5 million or 6.8% compared to the year ended December 31, 2021 and was driven primarily by growth in the Company’s loan and investment portfolios. The yield on interest earning assets was 3.77% for the year ended December 31, 2022 compared to 3.69% for the same period in 2021. The increase in yield on interest earning assets was primarily due to an increase in interest rates during the year. The cost of interest-bearing liabilities was 0.89% for the year ended December 31, 2022 compared to 0.59% for the same period of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to increases in the cost of interest-bearing deposits as a result of an increase in rates offered on time, savings, money market, and NOW deposit accounts during the second half of 2022. Net interest margin for the year ended December 31, 2022 was 3.16% as compared to 3.29% for the same period of the prior year. The decrease in net interest margin was primarily due to increases in the cost of interest-bearing deposits and accelerated recognition of prior debt issuance costs associated with the refinancing of the subordinated debt, which was partially offset by an increase in yield on all interest-earning assets. The Company recorded a $175 thousand provision for loan losses for the year ended December 31, 2022, compared to a $3.1 million provision for the year ended December 31, 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy. Non-interest income decreased $28 thousand or 1.6% during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in non-interest income was primarily due to mark-to-market adjustments of $(548) thousand resulting from a reduction in value of investments related to the Company’s nonqualified deferred compensation plan. The decrease in non-interest income was partially offset by a non-recurring BOLI related benefit claim realized and interest rate swap fee income recognized, as well as increases in insurance commissions and interchange and other fee income due to higher production and increased customer activity, respectively. During the year ended December 31, 2021, the Company also realized a $10 thousand gain on a called security. Excluding the impacts of the gain on the called security, mark-to-market adjustments, and BOLI related benefit claim, non-interest income increased $373 thousand or 24.6%. Non-interest expense decreased $388 thousand or 1.2% during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in non-interest expense was primarily due to non-recurring legal and professional fees incurred in 2021, as well as decreases in marketing expense, FDIC insurance fees, and salaries and benefit expense. The decrease in marketing expense was primarily due to lower marketing vendor related expenses. The decrease in FDIC insurance fees was primarily due to lower insurance premiums. The decrease in salaries and benefit expense was primarily due to lower accruals related to deferred compensation and employer health insurance fees. The decrease in non-interest expense was partially offset by increases in state franchise taxes as a result of an increase in the Bank’s equity year-over-year and data processing fees due to new investments in technology solutions to support our operations. For the year ended December 31, 2022, non-interest expense to average assets was 1.40% compared to 1.58% for the year ended December 31, 2021. The decrease was primarily due to non-recurring legal and professional fees incurred in 2021 as well as decreases in marketing expense and FDIC insurance premiums. For the year ended December 31, 2022, the efficiency ratio was 44.2% compared to 47.7% for the year ended December 31, 2021. The decrease was primarily due to the increase in net interest income coupled with a decrease in non-interest expense. The decrease was partially offset by a modest decrease in non-interest income. About John Marshall Bancorp, Inc. John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is a $2.35 billion bank headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. with one loan production office in Arlington, Virginia. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington D.C. Metro area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated Relationship Managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including Charter and Private Schools, Government Contractors, Health Services, Nonprofits and Associations, Professional Services, Property Management Companies, and Title Companies. Learn more at www.johnmarshallbank.com. In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiary include, but are not limited to the following: changes in interest rates, general economic conditions, public health crises (such as the governmental, social and economic effects of COVID-19), levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines, and other conditions which by their nature are not susceptible to accurate forecast, and are subject to significant uncertainty. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. John Marshall Bancorp, Inc. Financial Highlights (Unaudited) (Dollar amounts in thousands, except per share data) At or For the Three Months Ended At or For the Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Selected Balance Sheet Data Cash and cash equivalents $ 61,599 $ 105,799 $ 61,599 $ 105,799 Total investment securities 463,531 351,629 463,531 351,629 Loans, net of unearned income 1,789,508 1,666,469 1,789,508 1,666,469 Allowance for loan losses (20,208) (20,032) (20,208) (20,032) Total assets 2,348,235 2,149,309 2,348,235 2,149,309 Non-interest bearing demand deposits 476,697 488,838 476,697 488,838 Interest bearing deposits 1,591,043 1,392,715 1,591,043 1,392,715 Total deposits 2,067,740 1,881,553 2,067,740 1,881,553 Shareholders' equity 212,800 208,470 212,800 208,470 Summary Results of Operations Interest income $ 23,557 $ 18,703 $ 84,066 $ 74,119 Interest expense 6,052 1,734 13,645 8,211 Net interest income 17,505 16,969 70,421 65,908 Provision for loan losses 175 325 175 3,105 Net interest income after provision for loan losses 17,330 16,644 70,246 62,803 Non-interest income 718 513 1,691 1,719 Non-interest expense 7,449 7,679 31,874 32,262 Income before income taxes 10,599 9,478 40,063 32,260 Net income 8,202 7,547 31,803 25,461 Per Share Data and Shares Outstanding Earnings per share - basic $ 0.58 $ 0.55 $ 2.27 $ 1.87 Earnings per share - diluted $ 0.58 $ 0.54 $ 2.25 $ 1.83 Book value per share $ 15.09 $ 15.17 $ 15.09 $ 15.17 Book value per share, excluding accumulated other comprehensive loss (1) $ 17.13 $ 15.20 $ 17.13 $ 15.20 Weighted average common shares (basic) 14,019,429 13,614,760 13,931,841 13,581,586 Weighted average common shares (diluted) 14,131,352 13,914,724 14,084,427 13,879,595 Common shares outstanding at end of period 14,098,986 13,745,598 14,098,986 13,745,598 Performance Ratios Return on average assets (annualized) 1.40 % 1.41 % 1.40 % 1.25 % Return on average equity (annualized) 15.65 % 14.52 % 15.18 % 12.90 % Net interest margin 3.05 % 3.23 % 3.16 % 3.29 % Non-interest income as a percentage of average assets (annualized) 0.12 % 0.10 % 0.07 % 0.08 % Non-interest expense to average assets (annualized) 1.27 % 1.44 % 1.40 % 1.58 % Efficiency ratio 40.9 % 43.9 % 44.2 % 47.7 % Asset Quality Non-performing assets to total assets - - % - - % - - % - - % Non-performing loans to total loans - - % - - % - - % - - % Allowance for loan losses to non-performing loans N/M N/M N/M N/M Allowance for loan losses to total loans (2) 1.13 % 1.20 % 1.13 % 1.20 % Net charge-offs (recoveries) to average loans (annualized) - - % - - % - - % - - % Loans 30-89 days past due and accruing interest $ - - $ - - $ - - $ - - Non-accrual loans - - - - - - - - Other real estate owned - - - - - - - - Non-performing assets (3) - - - - - - - - Troubled debt restructurings (total) 418 549 418 549 Performing in accordance with modified terms 418 549 418 549 Not performing in accordance with modified terms - - - - - - - - Capital Ratios (Bank Level) Equity / assets 10.0 % 10.8 % 10.0 % 10.8 % Total risk-based capital ratio 15.6 % 15.3 % 15.6 % 15.3 % Tier 1 risk-based capital ratio 14.4 % 14.0 % 14.4 % 14.0 % Leverage ratio 11.3 % 11.0 % 11.3 % 11.0 % Common equity tier 1 ratio 14.4 % 14.0 % 14.4 % 14.0 % Other Information Number of full time equivalent employees 139 138 139 138 # Full service branch offices 8 8 8 8 # Loan production or limited service branch offices 1 1 1 1 (1) Book value per share excluding accumulated other comprehensive loss, is a non-GAAP financial measure. It is calculated by dividing the total of shareholders’ equity less the entirety of the balance of our accumulated other comprehensive loss by the number of shares outstanding as of the measurement date. (2) The allowance for loan losses to total loans, excluding PPP loans, net of unearned income of $132 thousand, was 1.13% at December 31, 2022. The allowance for loan losses to total loans, excluding PPP loans, net of unearned income of $67.7 million, was 1.25% at December 31, 2021. PPP loans received no allocations in the allowance estimate due to the underlying guarantees. (3) Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings 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 2022 2022 2021 Months Year Assets (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 6,583 $ 14,957 $ 2,920 (56.0) % 125.4 % Interest-bearing deposits in banks 55,016 59,799 102,879 (8.0) % (46.5) % Securities available-for-sale, at fair value 357,576 366,546 239,300 (2.4) % 49.4 % Securities held-to-maturity, fair value of $81,161, $81,765, and $103,258 at 12/31/2022, 9/30/2022, and 12/31/2021, respectively. 99,415 100,598 105,509 (1.2) % (5.8) % Restricted securities, at cost 4,425 4,421 4,951 0.1 % (10.6) % Equity securities, at fair value 2,115 1,913 1,869 10.6 % 13.2 % Loans, net of unearned income 1,789,508 1,725,114 1,666,469 3.7 % 7.4 % Allowance for loan losses (20,208) (20,032) (20,032) 0.9 % 0.9 % Net loans 1,769,300 1,705,082 1,646,437 3.8 % 7.5 % Bank premises and equipment, net 1,219 1,331 1,620 (8.4) % (24.8) % Accrued interest receivable 5,531 4,744 4,943 16.6 % 11.9 % Bank owned life insurance 21,170 21,071 20,998 0.5 % 0.8 % Right of use assets 4,611 3,936 4,913 17.1 % (6.1) % Other assets 21,274 21,142 12,970 0.6 % 64.0 % Total assets $ 2,348,235 $ 2,305,540 $ 2,149,309 1.9 % 9.3 % Liabilities and Shareholders' Equity Liabilities Deposits: Non-interest bearing demand deposits $ 476,697 $ 535,186 $ 488,838 (10.9) % (2.5) % Interest-bearing demand deposits 691,945 705,593 633,901 (1.9) % 9.2 % Savings deposits 95,241 102,909 101,376 (7.5) % (6.1) % Time deposits 803,857 719,653 657,438 11.7 % 22.3 % Total deposits 2,067,740 2,063,341 1,881,553 0.2 % 9.9 % Federal funds purchased 25,500 - - - - N/M N/M Federal Home Loan Bank advances - - - - 18,000 N/M N/M Subordinated debt 24,624 24,603 24,728 0.1 % (0.4) % Accrued interest payable 1,035 643 843 61.0 % 22.8 % Lease liabilities 4,858 4,186 5,182 16.1 % (6.3) % Other liabilities 11,678 10,555 10,533 10.6 % 10.9 % Total liabilities 2,135,435 2,103,328 1,940,839 1.5 % 10.0 % Shareholders' Equity Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued - - - - - - N/M N/M Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued - - - - - - N/M N/M Common stock, voting, par value $0.01 per share; authorized 30,000,000 shares; issued and outstanding, 14,098,986 at 12/31/2022 including 55,185 unvested shares, 14,070,080 shares at 9/30/2022 including 58,046 unvested shares and 13,745,598 at 12/31/2021, including 75,826 unvested shares 141 140 137 0.7 % 2.9 % Additional paid-in capital 94,726 94,560 91,107 0.2 % 4.0 % Retained earnings 146,630 138,428 117,626 5.9 % 24.7 % Accumulated other comprehensive loss (28,697) (30,916) (400) N/M N/M Total shareholders' equity 212,800 202,212 208,470 5.2 % 2.1 % Total liabilities and shareholders' equity $ 2,348,235 $ 2,305,540 $ 2,149,309 1.9 % 9.3 % 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, 2022 2021 % Change 2022 2021 % Change (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest and Dividend Income Interest and fees on loans $ 20,541 $ 17,340 18.5 % $ 74,281 $ 69,415 7.0 % Interest on investment securities, taxable 2,337 1,225 90.8 % 7,934 4,146 91.4 % Interest on investment securities, tax-exempt 30 30 0.0 % 120 120 0.0 % Dividends 64 67 (4.5) % 249 263 (5.3) % Interest on deposits in banks 585 41 N/M 1,482 175 N/M Total interest and dividend income 23,557 18,703 26.0 % 84,066 74,119 13.4 % Interest Expense Deposits 5,688 1,331 327.3 % 11,778 6,599 78.5 % Federal funds purchased 15 - - N/M 15 - - N/M Federal Home Loan Bank advances - - 31 N/M 42 125 (66.4) % Subordinated debt 349 372 (6.2) % 1,810 1,487 21.7 % Total interest expense 6,052 1,734 249.0 % 13,645 8,211 66.2 % Net interest income 17,505 16,969 3.2 % 70,421 65,908 6.8 % Provision for Loan Losses 175 325 (46.2) % 175 3,105 (94.4) % Net interest income after provision for loan losses 17,330 16,644 4.1 % 70,246 62,803 11.9 % Non-interest Income Service charges on deposit accounts 84 74 13.5 % 324 544 (40.4) % Bank owned life insurance 99 102 (2.9) % 544 411 32.4 % Other service charges and fees 187 138 35.5 % 656 195 236.4 % Gains on securities - - - - N/M - - 10 N/M Insurance commissions 70 79 (11.4) % 382 284 34.5 % Other income (loss) 278 120 131.7 % (215) 275 N/M Total non-interest income 718 513 40.0 % 1,691 1,719 (1.6) % Non-interest Expenses Salaries and employee benefits 4,436 4,765 (6.9) % 20,190 20,411 (1.1) % Occupancy expense of premises 458 480 (4.6) % 1,893 1,985 (4.6) % Furniture and equipment expenses 336 363 (7.4) % 1,325 1,436 (7.7) % Other expenses 2,219 2,071 7.1 % 8,466 8,430 0.4 % Total non-interest expense 7,449 7,679 (3.0) % 31,874 32,262 (1.2) % Income before income taxes 10,599 9,478 11.8 % 40,063 32,260 24.2 % Income tax Expense 2,397 1,931 24.1 % 8,260 6,799 21.5 % Net income $ 8,202 $ 7,547 8.7 % $ 31,803 $ 25,461 24.9 % Earnings Per Share Basic $ 0.58 $ 0.55 5.5 % $ 2.27 $ 1.87 21.5 % Diluted $ 0.58 $ 0.54 7.4 % $ 2.25 $ 1.83 22.9 % John Marshall Bancorp, Inc. Historical Trends - Quarterly Financial Data (Unaudited) (Dollar amounts in thousands, except per share data) 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Profitability for the Quarter: Interest income $ 23,557 $ 21,208 $ 19,555 $ 19,745 $ 18,703 $ 18,042 $ 18,627 $ 18,747 Interest expense 6,052 3,516 2,247 1,829 1,734 1,876 2,136 2,465 Net interest income 17,505 17,692 17,308 17,916 16,969 16,166 16,491 16,282 Provision for loan losses 175 - - - - - - 325 325 90 2,365 Non-interest income 718 450 109 414 513 325 417 464 Non-interest expense 7,449 7,958 7,681 8,786 7,679 7,623 9,067 7,893 Income before income taxes 10,599 10,184 9,736 9,544 9,478 8,543 7,751 6,488 Income tax expense 2,397 2,139 1,854 1,870 1,931 1,782 1,672 1,414 Net income $ 8,202 $ 8,045 $ 7,882 $ 7,674 $ 7,547 $ 6,761 $ 6,079 $ 5,074 Financial Performance: Return on average assets (annualized) 1.40 % 1.38 % 1.41 % 1.40 % 1.41 % 1.30 % 1.20 % 1.05 % Return on average equity (annualized) 15.65 % 15.07 % 15.28 % 14.76 % 14.52 % 13.35 % 12.64 % 10.89 % Net interest margin 3.05 % 3.10 % 3.16 % 3.34 % 3.23 % 3.15 % 3.32 % 3.44 % Non-interest income as a percentage of average assets (annualized) 0.12 % 0.08 % 0.02 % 0.08 % 0.10 % 0.06 % 0.08 % 0.10 % Non-interest expense to average assets (annualized) 1.27 % 1.36 % 1.38 % 1.61 % 1.44 % 1.46 % 1.79 % 1.64 % Efficiency ratio 40.9 % 43.9 % 44.1 % 47.9 % 43.9 % 46.2 % 53.6 % 47.1 % Per Share Data: Earnings per share - basic $ 0.58 $ 0.57 $ 0.56 $ 0.55 $ 0.55 $ 0.50 $ 0.45 $ 0.37 Earnings per share - diluted $ 0.58 $ 0.57 $ 0.56 $ 0.55 $ 0.54 $ 0.48 $ 0.44 $ 0.37 Book value per share $ 15.09 $ 14.37 $ 14.80 $ 14.68 $ 15.17 $ 14.82 $ 14.32 $ 13.85 Dividends declared per share $ - - $ - - $ - - $ 0.20 $ - - $ - - $ - - $ - - Weighted average common shares (basic) 14,019,429 13,989,414 13,932,256 13,783,034 13,614,760 13,580,538 13,572,779 13,557,779 Weighted average common shares (diluted) 14,131,352 14,108,286 14,085,160 13,991,692 13,914,724 13,883,104 13,868,147 13,809,751 Common shares outstanding at end of period 14,098,986 14,070,080 14,026,589 13,950,570 13,745,598 13,644,985 13,639,173 13,634,754 Non-interest Income: Service charges on deposit accounts $ 84 $ 79 $ 84 $ 77 $ 74 $ 70 $ 60 $ 58 Bank owned life insurance 99 255 95 95 102 102 100 107 Other service charges and fees 187 175 157 137 138 120 115 104 Gains on securities - - - - - - - - - - - - - - 10 Insurance commissions 70 47 44 221 79 28 22 155 Other income (loss) 278 (106) (271) (116) 120 5 120 30 Total non-interest income $ 718 $ 450 $ 109 $ 414 $ 513 $ 325 $ 417 $ 464 Non-interest Expenses: Salaries and employee benefits $ 4,436 $ 5,072 $ 4,655 $ 6,027 $ 4,765 $ 4,977 $ 5,680 $ 4,989 Occupancy expense of premises 458 461 482 493 480 484 514 507 Furniture and equipment expenses 336 323 341 325 363 373 378 322 Other expenses 2,219 2,102 2,203 1,941 2,071 1,789 2,495 2,075 Total non-interest expenses $ 7,449 $ 7,958 $ 7,681 $ 8,786 $ 7,679 $ 7,623 $ 9,067 $ 7,893 Balance Sheets at Quarter End: Total loans $ 1,789,508 $ 1,725,114 $ 1,692,652 $ 1,631,260 $ 1,666,469 $ 1,602,377 $ 1,567,112 $ 1,605,783 Allowance for loan losses (20,208) (20,032) (20,031) (20,031) (20,032) (19,706) (19,381) (19,381) Investment securities 463,531 473,478 473,914 409,692 351,629 348,742 306,030 219,106 Interest-earning assets 2,308,055 2,258,822 2,274,968 2,217,553 2,121,407 2,062,000 2,032,235 1,979,848 Total assets 2,348,235 2,305,540 2,316,374 2,249,609 2,149,309 2,095,504 2,065,895 2,009,988 Total deposits 2,067,740 2,063,341 2,043,741 1,983,099 1,881,553 1,837,548 1,815,032 1,761,390 Total interest-bearing liabilities 1,641,167 1,552,758 1,581,017 1,530,133 1,435,443 1,416,396 1,379,031 1,388,286 Total shareholders' equity 212,800 202,212 207,530 204,855 208,470 202,222 195,246 188,904 Quarterly Average Balance Sheets: Total gross loans $ 1,759,747 $ 1,684,796 $ 1,641,914 $ 1,620,533 $ 1,629,124 $ 1,580,695 $ 1,602,125 $ 1,575,847 Allowance for loan losses (20,042) (20,032) (20,031) (20,032) (19,889) (19,525) (19,530) (17,816) Investment securities 468,956 488,860 447,688 376,608 356,007 325,027 256,671 180,180 Interest-earning assets 2,289,061 2,277,325 2,204,709 2,183,897 2,090,052 2,038,384 1,996,555 1,922,835 Total assets 2,330,307 2,314,825 2,240,119 2,216,131 2,121,980 2,069,143 2,027,364 1,954,088 Total deposits 2,079,161 2,057,640 1,980,231 1,946,882 1,857,782 1,812,635 1,820,939 1,709,678 Total interest-bearing liabilities 1,566,902 1,547,766 1,504,574 1,505,854 1,419,679 1,384,867 1,381,583 1,350,742 Total shareholders' equity 207,906 212,147 206,967 210,900 206,237 200,990 192,918 188,995 Financial Measures: Average equity to average assets 8.9 % 9.2 % 9.2 % 9.5 % 9.7 % 9.7 % 9.5 % 9.7 % Investment securities to earning assets 20.1 % 21.0 % 20.8 % 18.5 % 16.6 % 16.9 % 15.1 % 11.1 % Loans to earning assets 77.5 % 76.4 % 74.4 % 73.6 % 78.6 % 77.7 % 77.1 % 81.1 % Loans to assets 76.2 % 74.8 % 73.1 % 72.5 % 77.5 % 76.5 % 75.9 % 79.9 % Loans to deposits 86.5 % 83.6 % 82.8 % 82.3 % 88.6 % 87.2 % 86.3 % 91.2 % Capital Ratios (Bank Level): Equity / assets 10.0 % 9.7 % 9.9 % 10.2 % 10.8 % 10.8 % 10.6 % 10.5 % Total risk-based capital ratio 15.6 % 15.4 % 15.1 % 15.4 % 15.3 % 15.2 % 15.0 % 14.6 % Tier 1 risk-based capital ratio 14.4 % 14.3 % 14.0 % 14.2 % 14.0 % 14.0 % 13.9 % 13.4 % Leverage ratio 11.3 % 11.0 % 11.0 % 10.8 % 11.0 % 10.8 % 10.7 % 10.8 % Common equity tier 1 ratio 14.4 % 14.3 % 14.0 % 14.2 % 14.0 % 14.0 % 12.3 % 13.4 % John Marshall Bancorp, Inc. Loan, Deposit and Borrowing Detail (Unaudited) (Dollar amounts in thousands) 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Loans $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total Commercial business loans $ 44,788 2.5 % $ 44,967 2.6 % $ 47,654 2.8 % $ 52,569 3.2 % $ 53,378 3.2 % $ 53,166 3.3 % $ 55,375 3.5 % $ 60,637 3.8 % Commercial PPP loans 136 0.0 % 138 0.0 % 224 0.0 % 7,781 0.5 % 69,567 4.2 % 75,496 4.7 % 82,190 5.2 % 117,796 7.3 % Commercial owner-occupied real estate loans 366,131 20.5 % 362,346 21.1 % 378,457 22.4 % 339,933 20.9 % 345,272 20.7 % 326,585 20.4 % 320,519 20.4 % 307,918 19.2 % Total business loans 411,055 23.0 % 407,451 23.7 % 426,335 25.2 % 400,283 24.6 % 468,217 28.1 % 455,247 28.4 % 458,084 29.2 % 486,351 30.3 % Investor real estate loans 662,769 37.1 % 622,415 36.1 % 598,501 35.5 % 553,093 34.0 % 523,038 31.4 % 519,384 32.4 % 505,605 32.3 % 502,940 31.3 % Construction & development loans 195,027 11.0 % 199,324 11.6 % 189,644 11.2 % 219,160 13.4 % 231,090 13.9 % 228,993 14.3 % 219,175 14.0 % 250,208 15.6 % Multi-family loans 89,227 5.0 % 106,460 6.2 % 106,236 6.3 % 99,100 6.1 % 100,132 6.0 % 81,226 5.1 % 92,203 5.9 % 84,689 5.3 % Total commercial real estate loans 947,023 53.1 % 928,199 53.9 % 894,381 53.0 % 871,353 53.5 % 854,260 51.3 % 829,603 51.8 % 816,983 52.1 % 837,837 52.2 % Residential mortgage loans 426,841 23.9 % 385,696 22.4 % 368,370 21.8 % 356,331 21.9 % 342,491 20.6 % 316,549 19.8 % 291,615 18.6 % 281,964 17.5 % Consumer loans 529 0.0 % 585 0.0 % 651 0.0 % 513 0.0 % 586 0.0 % 631 0.0 % 916 0.1 % 793 0.0 % Total loans $ 1,785,448 100.0 % $ 1,721,931 100.0 % $ 1,689,737 100.0 % $ 1,628,480 100.0 % $ 1,665,554 100.0 % $ 1,602,030 100.0 % $ 1,567,598 100.0 % $ 1,606,945 100.0 % Less: Allowance for loan losses (20,208) (20,032) (20,031) (20,031) (20,032) (19,706) (19,381) (19,381) Net deferred loan costs (fees) 4,060 3,183 2,915 2,780 915 347 (486) (1,162) Net loans $ 1,769,300 $ 1,705,082 $ 1,672,621 $ 1,611,229 $ 1,646,437 $ 1,582,671 $ 1,547,731 $ 1,586,402 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Deposits $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total Non-interest bearing demand deposits $ 476,697 23.1 % $ 535,186 25.9 % $ 512,284 25.1 % $ 495,811 25.0 % $ 488,838 26.0 % $ 463,868 25.2 % $ 478,705 26.4 % $ 419,796 23.8 % Interest-bearing demand deposits: NOW accounts(1) 253,148 12.3 % 293,558 14.2 % 338,789 16.6 % 345,087 17.4 % 267,594 14.2 % 294,261 16.0 % 254,060 14.0 % 245,274 13.9 % Money market accounts(1) 438,797 21.2 % 412,035 20.0 % 399,877 19.6 % 414,987 20.9 % 366,306 19.4 % 336,651 18.3 % 333,818 18.4 % 344,807 19.6 % Savings accounts 95,241 4.6 % 102,909 5.0 % 112,276 5.4 % 114,427 5.8 % 101,376 5.4 % 94,840 5.2 % 79,119 4.4 % 72,102 4.1 % Certificates of deposit $250,000 or more 314,738 15.2 % 280,027 13.6 % 255,411 12.5 % 241,230 12.1 % 250,204 13.3 % 232,722 12.7 % 243,662 13.4 % 265,772 15.1 % Less than $250,000 89,247 4.3 % 88,421 4.3 % 87,505 4.3 % 91,050 4.6 % 103,084 5.5 % 104,463 5.7 % 112,991 6.2 % 119,828 6.8 % QwickRate® certificates of deposit 22,163 1.1 % 20,154 1.0 % 20,154 1.0 % 23,136 1.2 % 25,122 1.3 % 28,998 1.6 % 31,481 1.7 % 38,565 2.2 % IntraFi® certificates of deposit 25,757 1.2 % 46,305 2.2 % 32,686 1.6 % 39,628 2.0 % 61,281 3.3 % 66,926 3.6 % 60,761 3.3 % 38,284 2.2 % Brokered deposits 351,952 17.0 % 284,746 13.8 % 284,759 13.9 % 217,743 11.0 % 217,748 11.6 % 214,819 11.7 % 220,435 12.1 % 216,962 12.3 % Total deposits $ 2,067,740 100.0 % $ 2,063,341 100.0 % $ 2,043,741 100.0 % $ 1,983,099 100.0 % $ 1,881,553 100.0 % $ 1,837,548 100.0 % $ 1,815,032 100.0 % $ 1,761,390 100.0 % Borrowings Federal funds purchased $ 25,500 50.9 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % Federal Home Loan Bank advances - - 0.0 % - - 0.0 % - - 0.0 % 18,000 42.0 % 18,000 42.1 % 18,000 42.1 % 18,000 42.2 % 22,000 47.1 % Subordinated debt 24,624 49.1 % 24,603 100.0 % 49,560 100.0 % 24,845 58.0 % 24,728 57.9 % 24,716 57.9 % 24,704 57.8 % 24,692 52.9 % Total borrowings $ 50,124 100.0 % $ 24,603 100.0 % $ 49,560 100.0 % $ 42,845 100.0 % $ 42,728 100.0 % $ 42,716 100.0 % $ 42,704 100.0 % $ 46,692 100.0 % Total deposits and borrowings $ 2,117,864 $ 2,087,944 $ 2,093,301 $ 2,025,944 $ 1,924,281 $ 1,880,264 $ 1,857,736 $ 1,808,082 Core customer funding sources (2) $ 1,693,625 80.9 % $ 1,758,441 85.2 % $ 1,738,828 85.1 % $ 1,742,220 87.1 % $ 1,638,683 86.3 % $ 1,593,731 85.9 % $ 1,563,116 85.3 % $ 1,505,863 84.4 % Wholesale funding sources (3) 399,615 19.1 % 304,900 14.8 % 304,913 14.9 % 258,879 12.9 % 260,870 13.7 % 261,817 14.1 % 269,916 14.7 % 277,527 15.6 % Total funding sources $ 2,093,240 100.0 % $ 2,063,341 100.0 % $ 2,043,741 100.0 % $ 2,001,099 100.0 % $ 1,899,553 100.0 % $ 1,855,548 100.0 % $ 1,833,032 100.0 % $ 1,783,390 100.0 % (1) Includes IntraFi® accounts. (2) Includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits, which are maintained by customers. (3) Consists of QwickRate® certificates of deposit, brokered deposits, federal funds purchased and Federal Home Loan Bank advances. John Marshall Bancorp, Inc. Average Balance Sheets, Interest and Rates (unaudited) (Dollar amounts in thousands) Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Interest Income / Average Interest Income / Average Average Balance Expense Rate Average Balance Expense Rate Assets: Securities: Taxable $ 440,899 $ 8,183 1.86 % $ 275,071 $ 4,409 1.60 % Tax-exempt(1) 5,001 152 3.04 % 5,007 152 3.04 % Total securities $ 445,900 $ 8,335 1.87 % $ 280,078 $ 4,561 1.63 % Loans, net of unearned income(2): Taxable 1,652,940 73,497 4.45 % 1,577,418 68,685 4.35 % Tax-exempt(1) 24,211 993 4.10 % 19,631 924 4.71 % Total loans, net of unearned income $ 1,677,151 $ 74,490 4.44 % $ 1,597,049 $ 69,609 4.36 % Interest-bearing deposits in other banks $ 116,092 $ 1,482 1.28 % $ 135,360 $ 175 0.13 % Total interest-earning assets $ 2,239,143 $ 84,307 3.77 % $ 2,012,487 $ 74,345 3.69 % Total non-interest earning assets 36,624 31,132 Total assets $ 2,275,767 $ 2,043,619 Liabilities & Shareholders’ Equity: Interest-bearing deposits NOW accounts $ 311,950 $ 1,359 0.44 % $ 262,319 $ 798 0.30 % Money market accounts 395,369 3,340 0.84 % 337,993 1,256 0.37 % Savings accounts 108,178 504 0.47 % 83,032 300 0.36 % Time deposits 682,674 6,575 0.96 % 657,986 4,245 0.65 % Total interest-bearing deposits $ 1,498,171 $ 11,778 0.79 % $ 1,341,330 $ 6,599 0.49 % Federal funds purchased 386 15 3.89 % — — 0.00 % Subordinated debt 26,754 1,810 6.77 % 24,702 1,487 6.02 % Other borrowed funds 6,175 42 0.68 % 18,375 125 0.68 % Total interest-bearing liabilities $ 1,531,486 $ 13,645 0.89 % $ 1,384,407 $ 8,211 0.59 % Demand deposits 518,284 448,723 Other liabilities 16,518 13,146 Total liabilities $ 2,066,288 $ 1,846,276 Shareholders’ equity $ 209,479 $ 197,343 Total liabilities and shareholders’ equity $ 2,275,767 $ 2,043,619 Tax-equivalent net interest income and spread $ 70,662 2.88 % $ 66,134 3.10 % Less: tax-equivalent adjustment 241 226 Net interest income $ 70,421 $ 65,908 Tax-equivalent interest income/earnings assets 3.77 % 3.69 % Interest expense/earning assets 0.61 % 0.40 % Net interest margin(3) 3.16 % 3.29 % (1) Tax-equivalent income has been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $241 thousand and $226 thousand in 2022 and 2021, respectively. (2) The Company did not have any loans on non-accrual as of December 31, 2022 or December 31, 2021. (3) The net interest margin has been calculated on a tax-equivalent basis. John Marshall Bancorp, Inc. Average Balance Sheets, Interest and Rates (unaudited) (Dollar amounts in thousands) Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Interest Income / Average Interest Income / Average Average Balance Expense Rate Average Balance Expense Rate Assets: Securities: Taxable $ 463,961 $ 2,401 2.05 % $ 350,997 $ 1,292 1.46 % Tax-exempt(1) 4,995 38 3.02 % 5,010 38 3.01 % Total securities $ 468,956 $ 2,439 2.06 % $ 356,007 $ 1,330 1.48 % Loans, net of unearned income(2): Taxable 1,730,921 20,305 4.65 % 1,606,103 17,152 4.24 % Tax-exempt(1) 28,826 299 4.12 % 23,021 239 4.12 % Total loans, net of unearned income $ 1,759,747 $ 20,604 4.65 % $ 1,629,124 $ 17,391 4.24 % Interest-bearing deposits in other banks $ 60,358 $ 585 3.85 % $ 104,921 $ 41 0.16 % Total interest-earning assets $ 2,289,061 $ 23,628 4.10 % $ 2,090,052 $ 18,762 3.56 % Total non-interest earning assets 41,246 31,928 Total assets $ 2,330,307 $ 2,121,980 Liabilities & Shareholders’ Equity: Interest-bearing deposits NOW accounts $ 271,306 $ 530 0.78 % $ 281,690 $ 204 0.29 % Money market accounts 412,682 1,824 1.75 % 351,723 329 0.37 % Savings accounts 103,542 220 0.84 % 101,199 89 0.35 % Time deposits 753,228 3,114 1.64 % 642,346 709 0.44 % Total interest-bearing deposits $ 1,540,758 $ 5,688 1.46 % $ 1,376,958 $ 1,331 0.38 % Federal funds purchased 1,533 15 3.88 % — — 0.00 % Subordinated debt 24,611 349 5.63 % 24,720 372 5.97 % Other borrowed funds — — 0.00 % 18,001 31 0.68 % Total interest-bearing liabilities $ 1,566,902 $ 6,052 1.53 % $ 1,419,679 $ 1,734 0.48 % Demand deposits 538,403 480,824 Other liabilities 17,096 15,240 Total liabilities $ 2,122,401 $ 1,915,743 Shareholders’ equity $ 207,906 $ 206,237 Total liabilities and shareholders’ equity $ 2,330,307 $ 2,121,980 Tax-equivalent net interest income and spread $ 17,576 2.57 % $ 17,028 3.08 % Less: tax-equivalent adjustment 71 59 Net interest income $ 17,505 $ 16,969 Tax-equivalent interest income/earnings assets 4.10 % 3.56 % Interest expense/earning assets 1.05 % 0.33 % Net interest margin(3) 3.05 % 3.23 % (1) Tax-equivalent income has been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $71 thousand and $59 thousand in 2022 and 2021, respectively. (2) The Company did not have any loans on non-accrual as of December 31, 2022 or December 31, 2021. (3) The net interest margin has been calculated on a tax-equivalent basis. View source version on businesswire.com: https://www.businesswire.com/news/home/20230118005186/en/Contacts Christopher W. Bergstrom (703) 584-0840 Kent D. Carstater (703) 289-5922 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
John Marshall Bancorp, Inc. Reports 24.9% Annual Earnings Increase, 14.8% Quarterly Loan Growth Annualized and Superior Asset Quality By: John Marshall via Business Wire January 18, 2023 at 09:00 AM EST John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported its financial results for the three and twelve months ended December 31, 2022. Fourth Quarter and Year-to-Date Highlights Record Earnings – The Company reported its sixteenth consecutive quarter of record earnings. Net income of $8.2 million for the fourth quarter of 2022 represented a $655 thousand or 8.7% increase over the $7.5 million reported for the fourth quarter of 2021. Earnings per diluted share for the three months ended December 31, 2022 were $0.58, a 7.4% increase over the $0.54 reported for the three months ended December 31, 2021. The Company reported record net income of $31.8 million for the year ended December 31, 2022, a $6.3 million or 24.9% increase over the $25.5 million reported for the same period of 2021. Earnings per diluted share for the year ended December 31, 2022 were $2.25, a 22.9% increase over the $1.83 reported for the same period of 2021. Robust Core Loan Growth – Excluding Paycheck Protection Program (“PPP”) loans, gross loans net of unearned income (“Core Loans”) grew $190.6 million or 11.9% from December 31, 2021 to December 31, 2022. Core Loans increased $64.4 million during the quarter ended December 31, 2022 or 14.8% annualized from September 30, 2022. The Company remains steadfast in adhering to our strict underwriting standards to maintain pristine asset quality. Consistently Strong Returns – Annualized Return on Average Assets (“ROAA”) was 1.40% and annualized Return on Average Equity (“ROAE”) was 15.65% for the three months ended December 31, 2022. ROAA and ROAE were 1.41% and 14.52%, respectively, for the three months ended December 31, 2021. Commitment to Cost Conscious Growth – Revenues (net interest income plus non-interest income) grew 16.8% annualized for the three months ended December 31, 2022 relative to the three months ended December 31, 2021. Over the same period, overhead decreased 11.9% annualized. The ratio of annualized non-interest expense to average assets was 1.27% for the fourth quarter of 2022 compared to 1.44% for the fourth quarter of 2021. The efficiency ratio for the fourth quarter of 2022 was 40.9% compared to 43.9% for the fourth quarter of 2021. No Non-performing Assets; No Loans More Than 30 Days Past Due – For the thirteenth consecutive quarter, the Company had no nonperforming loans, no other real estate owned, and no loans 30 days or more past due. There were no charge-offs during the quarter. The Company believes its allowance for loan losses is appropriate for the inherent risks and uncertainties associated with the portfolio. Chris Bergstrom, President and Chief Executive Officer, commented, “2022 was a remarkable year for John Marshall. We registered our shares with the SEC, listed our stock on Nasdaq, gained inclusion in the Russell 2000 Index, refinanced our subordinated debt to a lower rate, paid our first cash dividend, broadened our customer service and fee income capabilities by implementing an interest rate swap program, decreased overhead, maintained our outstanding asset quality and delivered our fourth consecutive year of record earnings. On behalf of the Company, I want to express appreciation for our employees and customers who made these many strategic goals reality. Looking forward, each year holds its own set of challenges and early signs indicate that 2023 will be no different. As interest rates have risen, depositors have many investment alternatives from which to choose and, as a result, deposit costs are rising. Certain economic data seem to point to a recession, which could moderate loan growth and impact borrowers’ ability to service their loans. Despite these potential hurdles, I remain confident in our people and our business model. We believe with our liquid, well-capitalized balance sheet, strong asset quality, robust underwriting and conservative culture that we are well prepared to manage for the potential challenges ahead.” Balance Sheet and Credit Quality Total assets were $2.35 billion at December 31, 2022, $2.31 billion at September 30, 2022 and $2.15 billion at December 31, 2021. During the fourth quarter of 2022, assets increased $42.7 million or 7.4% annualized primarily due to an increase in loans. Asset growth from December 31, 2021 to December 31, 2022 was $198.9 million or 9.3%. Total loans, net of unearned income, increased by 7.4% to $1.79 billion at December 31, 2022, compared to $1.67 billion at December 31, 2021. The year-over-year increase in the loan portfolio was primarily attributable to growth in the investor real estate and residential mortgage portfolios. Total loans, net of unearned income, increased $64.4 million during the quarter ended December 31, 2022 or 14.8% annualized from $1.73 billion at September 30, 2022. The increase in loans was primarily attributable to growth in the investor real estate, residential mortgage, and commercial owner-occupied real estate loan portfolios. The Company’s portfolio of investments in fixed income securities was $457.0 million at December 31, 2022, $467.1 million at September 30, 2022, and $344.8 million at December 31, 2021. All but $11.3 million of the fixed income portfolio is backed by the explicit or implicit guarantees of the United States Government or one of its agencies. Nearly 70% of the fixed income portfolio is invested in amortizing investments, which provides the Company with a source of steady cash flow to reinvest each month. For 2023, the Company anticipates primarily reinvesting fixed income cash flows into loans. At December 31, 2022, the fixed income portfolio had an estimated weighted average life of 4.5 years. The Company’s balance sheet remains highly liquid. In addition to deposits in banks and cash flows from fixed income securities, liquidity needs are also met with cash and cash equivalents and unencumbered securities classified as available-for-sale. Liquid assets totaled $335.8 million as of December 31, 2022 compared to $299.3 million at December 31, 2021. These amounts represented 14.3% and 16.8% of total assets as of December 31, 2022 and December 31, 2021, respectively. In addition, the Bank had secured borrowing capacity of $388 million at December 31, 2022. Total deposits were $2.07 billion at December 31, 2022, $2.06 billion at September 30, 2022, and $1.88 billion at December 31, 2021. Deposit growth was 9.9% during the past twelve months, as time deposits grew 22.3% and interest-bearing demand deposits grew 9.2%. Total borrowings, defined as federal funds purchased, Federal Home Loan Bank advances, and subordinated debt, increased by $25.5 million to $50.1 million at December 31, 2022 compared to $24.6 million at September 30, 2022. The increase during the quarter was due to $25.5 million in federal funds purchased. Federal Home Loan Bank advances decreased from $18.0 million at December 31, 2021 to zero at December 31, 2022 and were unchanged from September 30, 2022. Shareholders’ equity increased $4.3 million or 2.1% to $212.8 million at December 31, 2022 compared to $208.5 million at December 31, 2021, as a result of increases in retained earnings and additional paid-in capital, which were partially offset by the increase in the unrealized loss on our available-for-sale investment portfolio. Book value per share was $15.09 as of December 31, 2022 compared to $15.17 as of December 31, 2021. The year-over-year change in book value per share was primarily due to increased accumulated other comprehensive loss, increased share count from shareholder option exercises and restricted share award issuances, and cash dividends paid, partially offset by the Company’s earnings over the previous twelve months. The increase in accumulated other comprehensive loss was primarily attributable to increases in unrealized losses on our available-for-sale investment portfolio due to market value changes as a result of rising interest rates. Book value per share, excluding accumulated other comprehensive loss (a non-GAAP financial measure which is defined in the tables below) was $17.13 at December 31, 2022 compared to $15.20 at December 31, 2021. The Bank’s capital ratios remain well above regulatory thresholds for well-capitalized banks. As of December 31, 2022, the Bank’s total risk-based capital ratio was 15.6%, compared to 15.3% at December 31, 2021. The Company recorded no net charge-offs during the fourth quarter of 2022, the third quarter of 2022, and the fourth quarter of 2021. As of December 31, 2022, the Company had no non-accrual loans, no loans more than 30 days past due, and no other real estate owned assets. At December 31, 2022, the allowance for loan losses was $20.2 million or 1.13% of outstanding loans, net of unearned income, compared to $20.0 million or 1.20% of outstanding loans, net of unearned income, at September 30, 2022. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, was primarily due to changes in the loan portfolio’s composition as well as net changes in qualitative adjustments. As of December 31, 2022, the Company continued to account for its allowance using an incurred loss model. Beginning on January 1, 2023, and in all subsequent periods, the Company will determine its allowance using the current expected credit losses standard (ASC 326). Income Statement Review Quarterly Results Net income for the fourth quarter of 2022 increased $655 thousand or 8.7% to $8.2 million compared to $7.5 million for the fourth quarter of 2021. Net interest income for the fourth quarter of 2022 increased $536 thousand or 3.2% compared to the fourth quarter of 2021, driven primarily by higher yields on interest-earning assets and growth in the Company’s loan and investment portfolios. The yield on interest earning assets was 4.10% for the fourth quarter of 2022 compared to 3.56% for the same period in 2021. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and investment portfolios and deposits in banks as a result of increases in interest rates during the year. The cost of interest-bearing liabilities was 1.53% for the fourth quarter of 2022 compared to 0.48% for the same quarter of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to a 1.08% increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW, and savings deposit accounts during the year. The annualized net interest margin for the fourth quarter of 2022 was 3.05% as compared to 3.23% for the same quarter of the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company’s loan and investment portfolios. The Company recorded a $175 thousand provision for loan losses for the fourth quarter of 2022, compared to a $325 thousand provision for the fourth quarter of 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy. Non-interest income increased $205 thousand or 40.0% during the fourth quarter of 2022 compared to the fourth quarter of 2021. The increase in non-interest income was primarily due to swap fee income of $127 thousand recognized during the quarter on the Company’s first back-to-back loan interest rate swap (“swap”). The Company enters into swaps with commercial loan customers to provide a facility for customers to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in exact offsetting terms to swaps that the Company enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities in the Consolidated Balance Sheet. The increase in non-interest income was also attributable to mark-to-market adjustments of $35 thousand resulting from an increase in value of investments related to the Company’s nonqualified deferred compensation plan, and increases in services charges and fees on deposit accounts. The increase was partially offset by modest decreases in insurance commissions and bank owned life insurance (“BOLI”) income. Non-interest expense decreased $230 thousand or 3.0% for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. The decrease in non-interest expense was primarily due to decreases in salaries and employee benefits expense, occupancy expense, furniture and equipment expense, marketing expense, and a release in unfunded commitment reserves during the quarter. The decrease in salaries and employee benefits was driven by a decrease in incentive and deferred compensation expense when compared to the prior year quarter due to changes in staffing. Two of the Company’s former senior executive vice presidents became advisors to the Chief Executive Officer effective June 1, 2022. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The decrease in marketing expense was primarily due to lower marketing vendor related expenses incurred. The release in unfunded commitment reserves was primarily due to a decrease in unfunded commitment balances year-over-year as a result of credit line utilization. The decrease in non-interest expense was partially offset by increases in data processing fees and professional service fees. The increase in data processing fees was due to new investments in technology solutions to support our operations. The Company regularly evaluates technology and invests in applications enabling greater efficiencies or customer experience. The increase in professional service fees was due to expenses incurred in conjunction with the back-to-back loan interest rate swap, as well as increased vendor services supporting our public company reporting requirements that did not exist in the prior year. For the three months ended December 31, 2022, annualized non-interest expense to average assets was 1.27% compared to 1.44% for the three months ended December 31, 2021. The decrease was primarily due to lower salaries and employee benefit expense coupled with continued cost consciousness. For the three months ended December 31, 2022, the annualized efficiency ratio was 40.9% compared to 43.9% for the three months ended December 31, 2021. The decrease was primarily due to increases in net interest income and non-interest income as well as a decrease in non-interest expense. Year-to-Date Results Net income for the year ended December 31, 2022 increased $6.3 million or 24.9% to $31.8 million compared to $25.5 million for the year ended December 31, 2021. The results for the year ended December 31, 2022 reflect a combination of the impact of an increase in net interest income, a decrease in provision for loan loss expense, and a decrease in non-interest expense, which were partially offset by a decrease in non-interest income. Net interest income for the year ended December 31, 2022 increased $4.5 million or 6.8% compared to the year ended December 31, 2021 and was driven primarily by growth in the Company’s loan and investment portfolios. The yield on interest earning assets was 3.77% for the year ended December 31, 2022 compared to 3.69% for the same period in 2021. The increase in yield on interest earning assets was primarily due to an increase in interest rates during the year. The cost of interest-bearing liabilities was 0.89% for the year ended December 31, 2022 compared to 0.59% for the same period of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to increases in the cost of interest-bearing deposits as a result of an increase in rates offered on time, savings, money market, and NOW deposit accounts during the second half of 2022. Net interest margin for the year ended December 31, 2022 was 3.16% as compared to 3.29% for the same period of the prior year. The decrease in net interest margin was primarily due to increases in the cost of interest-bearing deposits and accelerated recognition of prior debt issuance costs associated with the refinancing of the subordinated debt, which was partially offset by an increase in yield on all interest-earning assets. The Company recorded a $175 thousand provision for loan losses for the year ended December 31, 2022, compared to a $3.1 million provision for the year ended December 31, 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy. Non-interest income decreased $28 thousand or 1.6% during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in non-interest income was primarily due to mark-to-market adjustments of $(548) thousand resulting from a reduction in value of investments related to the Company’s nonqualified deferred compensation plan. The decrease in non-interest income was partially offset by a non-recurring BOLI related benefit claim realized and interest rate swap fee income recognized, as well as increases in insurance commissions and interchange and other fee income due to higher production and increased customer activity, respectively. During the year ended December 31, 2021, the Company also realized a $10 thousand gain on a called security. Excluding the impacts of the gain on the called security, mark-to-market adjustments, and BOLI related benefit claim, non-interest income increased $373 thousand or 24.6%. Non-interest expense decreased $388 thousand or 1.2% during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in non-interest expense was primarily due to non-recurring legal and professional fees incurred in 2021, as well as decreases in marketing expense, FDIC insurance fees, and salaries and benefit expense. The decrease in marketing expense was primarily due to lower marketing vendor related expenses. The decrease in FDIC insurance fees was primarily due to lower insurance premiums. The decrease in salaries and benefit expense was primarily due to lower accruals related to deferred compensation and employer health insurance fees. The decrease in non-interest expense was partially offset by increases in state franchise taxes as a result of an increase in the Bank’s equity year-over-year and data processing fees due to new investments in technology solutions to support our operations. For the year ended December 31, 2022, non-interest expense to average assets was 1.40% compared to 1.58% for the year ended December 31, 2021. The decrease was primarily due to non-recurring legal and professional fees incurred in 2021 as well as decreases in marketing expense and FDIC insurance premiums. For the year ended December 31, 2022, the efficiency ratio was 44.2% compared to 47.7% for the year ended December 31, 2021. The decrease was primarily due to the increase in net interest income coupled with a decrease in non-interest expense. The decrease was partially offset by a modest decrease in non-interest income. About John Marshall Bancorp, Inc. John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is a $2.35 billion bank headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. with one loan production office in Arlington, Virginia. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington D.C. Metro area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated Relationship Managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including Charter and Private Schools, Government Contractors, Health Services, Nonprofits and Associations, Professional Services, Property Management Companies, and Title Companies. Learn more at www.johnmarshallbank.com. In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiary include, but are not limited to the following: changes in interest rates, general economic conditions, public health crises (such as the governmental, social and economic effects of COVID-19), levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines, and other conditions which by their nature are not susceptible to accurate forecast, and are subject to significant uncertainty. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. John Marshall Bancorp, Inc. Financial Highlights (Unaudited) (Dollar amounts in thousands, except per share data) At or For the Three Months Ended At or For the Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Selected Balance Sheet Data Cash and cash equivalents $ 61,599 $ 105,799 $ 61,599 $ 105,799 Total investment securities 463,531 351,629 463,531 351,629 Loans, net of unearned income 1,789,508 1,666,469 1,789,508 1,666,469 Allowance for loan losses (20,208) (20,032) (20,208) (20,032) Total assets 2,348,235 2,149,309 2,348,235 2,149,309 Non-interest bearing demand deposits 476,697 488,838 476,697 488,838 Interest bearing deposits 1,591,043 1,392,715 1,591,043 1,392,715 Total deposits 2,067,740 1,881,553 2,067,740 1,881,553 Shareholders' equity 212,800 208,470 212,800 208,470 Summary Results of Operations Interest income $ 23,557 $ 18,703 $ 84,066 $ 74,119 Interest expense 6,052 1,734 13,645 8,211 Net interest income 17,505 16,969 70,421 65,908 Provision for loan losses 175 325 175 3,105 Net interest income after provision for loan losses 17,330 16,644 70,246 62,803 Non-interest income 718 513 1,691 1,719 Non-interest expense 7,449 7,679 31,874 32,262 Income before income taxes 10,599 9,478 40,063 32,260 Net income 8,202 7,547 31,803 25,461 Per Share Data and Shares Outstanding Earnings per share - basic $ 0.58 $ 0.55 $ 2.27 $ 1.87 Earnings per share - diluted $ 0.58 $ 0.54 $ 2.25 $ 1.83 Book value per share $ 15.09 $ 15.17 $ 15.09 $ 15.17 Book value per share, excluding accumulated other comprehensive loss (1) $ 17.13 $ 15.20 $ 17.13 $ 15.20 Weighted average common shares (basic) 14,019,429 13,614,760 13,931,841 13,581,586 Weighted average common shares (diluted) 14,131,352 13,914,724 14,084,427 13,879,595 Common shares outstanding at end of period 14,098,986 13,745,598 14,098,986 13,745,598 Performance Ratios Return on average assets (annualized) 1.40 % 1.41 % 1.40 % 1.25 % Return on average equity (annualized) 15.65 % 14.52 % 15.18 % 12.90 % Net interest margin 3.05 % 3.23 % 3.16 % 3.29 % Non-interest income as a percentage of average assets (annualized) 0.12 % 0.10 % 0.07 % 0.08 % Non-interest expense to average assets (annualized) 1.27 % 1.44 % 1.40 % 1.58 % Efficiency ratio 40.9 % 43.9 % 44.2 % 47.7 % Asset Quality Non-performing assets to total assets - - % - - % - - % - - % Non-performing loans to total loans - - % - - % - - % - - % Allowance for loan losses to non-performing loans N/M N/M N/M N/M Allowance for loan losses to total loans (2) 1.13 % 1.20 % 1.13 % 1.20 % Net charge-offs (recoveries) to average loans (annualized) - - % - - % - - % - - % Loans 30-89 days past due and accruing interest $ - - $ - - $ - - $ - - Non-accrual loans - - - - - - - - Other real estate owned - - - - - - - - Non-performing assets (3) - - - - - - - - Troubled debt restructurings (total) 418 549 418 549 Performing in accordance with modified terms 418 549 418 549 Not performing in accordance with modified terms - - - - - - - - Capital Ratios (Bank Level) Equity / assets 10.0 % 10.8 % 10.0 % 10.8 % Total risk-based capital ratio 15.6 % 15.3 % 15.6 % 15.3 % Tier 1 risk-based capital ratio 14.4 % 14.0 % 14.4 % 14.0 % Leverage ratio 11.3 % 11.0 % 11.3 % 11.0 % Common equity tier 1 ratio 14.4 % 14.0 % 14.4 % 14.0 % Other Information Number of full time equivalent employees 139 138 139 138 # Full service branch offices 8 8 8 8 # Loan production or limited service branch offices 1 1 1 1 (1) Book value per share excluding accumulated other comprehensive loss, is a non-GAAP financial measure. It is calculated by dividing the total of shareholders’ equity less the entirety of the balance of our accumulated other comprehensive loss by the number of shares outstanding as of the measurement date. (2) The allowance for loan losses to total loans, excluding PPP loans, net of unearned income of $132 thousand, was 1.13% at December 31, 2022. The allowance for loan losses to total loans, excluding PPP loans, net of unearned income of $67.7 million, was 1.25% at December 31, 2021. PPP loans received no allocations in the allowance estimate due to the underlying guarantees. (3) Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings 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 2022 2022 2021 Months Year Assets (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 6,583 $ 14,957 $ 2,920 (56.0) % 125.4 % Interest-bearing deposits in banks 55,016 59,799 102,879 (8.0) % (46.5) % Securities available-for-sale, at fair value 357,576 366,546 239,300 (2.4) % 49.4 % Securities held-to-maturity, fair value of $81,161, $81,765, and $103,258 at 12/31/2022, 9/30/2022, and 12/31/2021, respectively. 99,415 100,598 105,509 (1.2) % (5.8) % Restricted securities, at cost 4,425 4,421 4,951 0.1 % (10.6) % Equity securities, at fair value 2,115 1,913 1,869 10.6 % 13.2 % Loans, net of unearned income 1,789,508 1,725,114 1,666,469 3.7 % 7.4 % Allowance for loan losses (20,208) (20,032) (20,032) 0.9 % 0.9 % Net loans 1,769,300 1,705,082 1,646,437 3.8 % 7.5 % Bank premises and equipment, net 1,219 1,331 1,620 (8.4) % (24.8) % Accrued interest receivable 5,531 4,744 4,943 16.6 % 11.9 % Bank owned life insurance 21,170 21,071 20,998 0.5 % 0.8 % Right of use assets 4,611 3,936 4,913 17.1 % (6.1) % Other assets 21,274 21,142 12,970 0.6 % 64.0 % Total assets $ 2,348,235 $ 2,305,540 $ 2,149,309 1.9 % 9.3 % Liabilities and Shareholders' Equity Liabilities Deposits: Non-interest bearing demand deposits $ 476,697 $ 535,186 $ 488,838 (10.9) % (2.5) % Interest-bearing demand deposits 691,945 705,593 633,901 (1.9) % 9.2 % Savings deposits 95,241 102,909 101,376 (7.5) % (6.1) % Time deposits 803,857 719,653 657,438 11.7 % 22.3 % Total deposits 2,067,740 2,063,341 1,881,553 0.2 % 9.9 % Federal funds purchased 25,500 - - - - N/M N/M Federal Home Loan Bank advances - - - - 18,000 N/M N/M Subordinated debt 24,624 24,603 24,728 0.1 % (0.4) % Accrued interest payable 1,035 643 843 61.0 % 22.8 % Lease liabilities 4,858 4,186 5,182 16.1 % (6.3) % Other liabilities 11,678 10,555 10,533 10.6 % 10.9 % Total liabilities 2,135,435 2,103,328 1,940,839 1.5 % 10.0 % Shareholders' Equity Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued - - - - - - N/M N/M Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued - - - - - - N/M N/M Common stock, voting, par value $0.01 per share; authorized 30,000,000 shares; issued and outstanding, 14,098,986 at 12/31/2022 including 55,185 unvested shares, 14,070,080 shares at 9/30/2022 including 58,046 unvested shares and 13,745,598 at 12/31/2021, including 75,826 unvested shares 141 140 137 0.7 % 2.9 % Additional paid-in capital 94,726 94,560 91,107 0.2 % 4.0 % Retained earnings 146,630 138,428 117,626 5.9 % 24.7 % Accumulated other comprehensive loss (28,697) (30,916) (400) N/M N/M Total shareholders' equity 212,800 202,212 208,470 5.2 % 2.1 % Total liabilities and shareholders' equity $ 2,348,235 $ 2,305,540 $ 2,149,309 1.9 % 9.3 % 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, 2022 2021 % Change 2022 2021 % Change (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest and Dividend Income Interest and fees on loans $ 20,541 $ 17,340 18.5 % $ 74,281 $ 69,415 7.0 % Interest on investment securities, taxable 2,337 1,225 90.8 % 7,934 4,146 91.4 % Interest on investment securities, tax-exempt 30 30 0.0 % 120 120 0.0 % Dividends 64 67 (4.5) % 249 263 (5.3) % Interest on deposits in banks 585 41 N/M 1,482 175 N/M Total interest and dividend income 23,557 18,703 26.0 % 84,066 74,119 13.4 % Interest Expense Deposits 5,688 1,331 327.3 % 11,778 6,599 78.5 % Federal funds purchased 15 - - N/M 15 - - N/M Federal Home Loan Bank advances - - 31 N/M 42 125 (66.4) % Subordinated debt 349 372 (6.2) % 1,810 1,487 21.7 % Total interest expense 6,052 1,734 249.0 % 13,645 8,211 66.2 % Net interest income 17,505 16,969 3.2 % 70,421 65,908 6.8 % Provision for Loan Losses 175 325 (46.2) % 175 3,105 (94.4) % Net interest income after provision for loan losses 17,330 16,644 4.1 % 70,246 62,803 11.9 % Non-interest Income Service charges on deposit accounts 84 74 13.5 % 324 544 (40.4) % Bank owned life insurance 99 102 (2.9) % 544 411 32.4 % Other service charges and fees 187 138 35.5 % 656 195 236.4 % Gains on securities - - - - N/M - - 10 N/M Insurance commissions 70 79 (11.4) % 382 284 34.5 % Other income (loss) 278 120 131.7 % (215) 275 N/M Total non-interest income 718 513 40.0 % 1,691 1,719 (1.6) % Non-interest Expenses Salaries and employee benefits 4,436 4,765 (6.9) % 20,190 20,411 (1.1) % Occupancy expense of premises 458 480 (4.6) % 1,893 1,985 (4.6) % Furniture and equipment expenses 336 363 (7.4) % 1,325 1,436 (7.7) % Other expenses 2,219 2,071 7.1 % 8,466 8,430 0.4 % Total non-interest expense 7,449 7,679 (3.0) % 31,874 32,262 (1.2) % Income before income taxes 10,599 9,478 11.8 % 40,063 32,260 24.2 % Income tax Expense 2,397 1,931 24.1 % 8,260 6,799 21.5 % Net income $ 8,202 $ 7,547 8.7 % $ 31,803 $ 25,461 24.9 % Earnings Per Share Basic $ 0.58 $ 0.55 5.5 % $ 2.27 $ 1.87 21.5 % Diluted $ 0.58 $ 0.54 7.4 % $ 2.25 $ 1.83 22.9 % John Marshall Bancorp, Inc. Historical Trends - Quarterly Financial Data (Unaudited) (Dollar amounts in thousands, except per share data) 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Profitability for the Quarter: Interest income $ 23,557 $ 21,208 $ 19,555 $ 19,745 $ 18,703 $ 18,042 $ 18,627 $ 18,747 Interest expense 6,052 3,516 2,247 1,829 1,734 1,876 2,136 2,465 Net interest income 17,505 17,692 17,308 17,916 16,969 16,166 16,491 16,282 Provision for loan losses 175 - - - - - - 325 325 90 2,365 Non-interest income 718 450 109 414 513 325 417 464 Non-interest expense 7,449 7,958 7,681 8,786 7,679 7,623 9,067 7,893 Income before income taxes 10,599 10,184 9,736 9,544 9,478 8,543 7,751 6,488 Income tax expense 2,397 2,139 1,854 1,870 1,931 1,782 1,672 1,414 Net income $ 8,202 $ 8,045 $ 7,882 $ 7,674 $ 7,547 $ 6,761 $ 6,079 $ 5,074 Financial Performance: Return on average assets (annualized) 1.40 % 1.38 % 1.41 % 1.40 % 1.41 % 1.30 % 1.20 % 1.05 % Return on average equity (annualized) 15.65 % 15.07 % 15.28 % 14.76 % 14.52 % 13.35 % 12.64 % 10.89 % Net interest margin 3.05 % 3.10 % 3.16 % 3.34 % 3.23 % 3.15 % 3.32 % 3.44 % Non-interest income as a percentage of average assets (annualized) 0.12 % 0.08 % 0.02 % 0.08 % 0.10 % 0.06 % 0.08 % 0.10 % Non-interest expense to average assets (annualized) 1.27 % 1.36 % 1.38 % 1.61 % 1.44 % 1.46 % 1.79 % 1.64 % Efficiency ratio 40.9 % 43.9 % 44.1 % 47.9 % 43.9 % 46.2 % 53.6 % 47.1 % Per Share Data: Earnings per share - basic $ 0.58 $ 0.57 $ 0.56 $ 0.55 $ 0.55 $ 0.50 $ 0.45 $ 0.37 Earnings per share - diluted $ 0.58 $ 0.57 $ 0.56 $ 0.55 $ 0.54 $ 0.48 $ 0.44 $ 0.37 Book value per share $ 15.09 $ 14.37 $ 14.80 $ 14.68 $ 15.17 $ 14.82 $ 14.32 $ 13.85 Dividends declared per share $ - - $ - - $ - - $ 0.20 $ - - $ - - $ - - $ - - Weighted average common shares (basic) 14,019,429 13,989,414 13,932,256 13,783,034 13,614,760 13,580,538 13,572,779 13,557,779 Weighted average common shares (diluted) 14,131,352 14,108,286 14,085,160 13,991,692 13,914,724 13,883,104 13,868,147 13,809,751 Common shares outstanding at end of period 14,098,986 14,070,080 14,026,589 13,950,570 13,745,598 13,644,985 13,639,173 13,634,754 Non-interest Income: Service charges on deposit accounts $ 84 $ 79 $ 84 $ 77 $ 74 $ 70 $ 60 $ 58 Bank owned life insurance 99 255 95 95 102 102 100 107 Other service charges and fees 187 175 157 137 138 120 115 104 Gains on securities - - - - - - - - - - - - - - 10 Insurance commissions 70 47 44 221 79 28 22 155 Other income (loss) 278 (106) (271) (116) 120 5 120 30 Total non-interest income $ 718 $ 450 $ 109 $ 414 $ 513 $ 325 $ 417 $ 464 Non-interest Expenses: Salaries and employee benefits $ 4,436 $ 5,072 $ 4,655 $ 6,027 $ 4,765 $ 4,977 $ 5,680 $ 4,989 Occupancy expense of premises 458 461 482 493 480 484 514 507 Furniture and equipment expenses 336 323 341 325 363 373 378 322 Other expenses 2,219 2,102 2,203 1,941 2,071 1,789 2,495 2,075 Total non-interest expenses $ 7,449 $ 7,958 $ 7,681 $ 8,786 $ 7,679 $ 7,623 $ 9,067 $ 7,893 Balance Sheets at Quarter End: Total loans $ 1,789,508 $ 1,725,114 $ 1,692,652 $ 1,631,260 $ 1,666,469 $ 1,602,377 $ 1,567,112 $ 1,605,783 Allowance for loan losses (20,208) (20,032) (20,031) (20,031) (20,032) (19,706) (19,381) (19,381) Investment securities 463,531 473,478 473,914 409,692 351,629 348,742 306,030 219,106 Interest-earning assets 2,308,055 2,258,822 2,274,968 2,217,553 2,121,407 2,062,000 2,032,235 1,979,848 Total assets 2,348,235 2,305,540 2,316,374 2,249,609 2,149,309 2,095,504 2,065,895 2,009,988 Total deposits 2,067,740 2,063,341 2,043,741 1,983,099 1,881,553 1,837,548 1,815,032 1,761,390 Total interest-bearing liabilities 1,641,167 1,552,758 1,581,017 1,530,133 1,435,443 1,416,396 1,379,031 1,388,286 Total shareholders' equity 212,800 202,212 207,530 204,855 208,470 202,222 195,246 188,904 Quarterly Average Balance Sheets: Total gross loans $ 1,759,747 $ 1,684,796 $ 1,641,914 $ 1,620,533 $ 1,629,124 $ 1,580,695 $ 1,602,125 $ 1,575,847 Allowance for loan losses (20,042) (20,032) (20,031) (20,032) (19,889) (19,525) (19,530) (17,816) Investment securities 468,956 488,860 447,688 376,608 356,007 325,027 256,671 180,180 Interest-earning assets 2,289,061 2,277,325 2,204,709 2,183,897 2,090,052 2,038,384 1,996,555 1,922,835 Total assets 2,330,307 2,314,825 2,240,119 2,216,131 2,121,980 2,069,143 2,027,364 1,954,088 Total deposits 2,079,161 2,057,640 1,980,231 1,946,882 1,857,782 1,812,635 1,820,939 1,709,678 Total interest-bearing liabilities 1,566,902 1,547,766 1,504,574 1,505,854 1,419,679 1,384,867 1,381,583 1,350,742 Total shareholders' equity 207,906 212,147 206,967 210,900 206,237 200,990 192,918 188,995 Financial Measures: Average equity to average assets 8.9 % 9.2 % 9.2 % 9.5 % 9.7 % 9.7 % 9.5 % 9.7 % Investment securities to earning assets 20.1 % 21.0 % 20.8 % 18.5 % 16.6 % 16.9 % 15.1 % 11.1 % Loans to earning assets 77.5 % 76.4 % 74.4 % 73.6 % 78.6 % 77.7 % 77.1 % 81.1 % Loans to assets 76.2 % 74.8 % 73.1 % 72.5 % 77.5 % 76.5 % 75.9 % 79.9 % Loans to deposits 86.5 % 83.6 % 82.8 % 82.3 % 88.6 % 87.2 % 86.3 % 91.2 % Capital Ratios (Bank Level): Equity / assets 10.0 % 9.7 % 9.9 % 10.2 % 10.8 % 10.8 % 10.6 % 10.5 % Total risk-based capital ratio 15.6 % 15.4 % 15.1 % 15.4 % 15.3 % 15.2 % 15.0 % 14.6 % Tier 1 risk-based capital ratio 14.4 % 14.3 % 14.0 % 14.2 % 14.0 % 14.0 % 13.9 % 13.4 % Leverage ratio 11.3 % 11.0 % 11.0 % 10.8 % 11.0 % 10.8 % 10.7 % 10.8 % Common equity tier 1 ratio 14.4 % 14.3 % 14.0 % 14.2 % 14.0 % 14.0 % 12.3 % 13.4 % John Marshall Bancorp, Inc. Loan, Deposit and Borrowing Detail (Unaudited) (Dollar amounts in thousands) 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Loans $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total Commercial business loans $ 44,788 2.5 % $ 44,967 2.6 % $ 47,654 2.8 % $ 52,569 3.2 % $ 53,378 3.2 % $ 53,166 3.3 % $ 55,375 3.5 % $ 60,637 3.8 % Commercial PPP loans 136 0.0 % 138 0.0 % 224 0.0 % 7,781 0.5 % 69,567 4.2 % 75,496 4.7 % 82,190 5.2 % 117,796 7.3 % Commercial owner-occupied real estate loans 366,131 20.5 % 362,346 21.1 % 378,457 22.4 % 339,933 20.9 % 345,272 20.7 % 326,585 20.4 % 320,519 20.4 % 307,918 19.2 % Total business loans 411,055 23.0 % 407,451 23.7 % 426,335 25.2 % 400,283 24.6 % 468,217 28.1 % 455,247 28.4 % 458,084 29.2 % 486,351 30.3 % Investor real estate loans 662,769 37.1 % 622,415 36.1 % 598,501 35.5 % 553,093 34.0 % 523,038 31.4 % 519,384 32.4 % 505,605 32.3 % 502,940 31.3 % Construction & development loans 195,027 11.0 % 199,324 11.6 % 189,644 11.2 % 219,160 13.4 % 231,090 13.9 % 228,993 14.3 % 219,175 14.0 % 250,208 15.6 % Multi-family loans 89,227 5.0 % 106,460 6.2 % 106,236 6.3 % 99,100 6.1 % 100,132 6.0 % 81,226 5.1 % 92,203 5.9 % 84,689 5.3 % Total commercial real estate loans 947,023 53.1 % 928,199 53.9 % 894,381 53.0 % 871,353 53.5 % 854,260 51.3 % 829,603 51.8 % 816,983 52.1 % 837,837 52.2 % Residential mortgage loans 426,841 23.9 % 385,696 22.4 % 368,370 21.8 % 356,331 21.9 % 342,491 20.6 % 316,549 19.8 % 291,615 18.6 % 281,964 17.5 % Consumer loans 529 0.0 % 585 0.0 % 651 0.0 % 513 0.0 % 586 0.0 % 631 0.0 % 916 0.1 % 793 0.0 % Total loans $ 1,785,448 100.0 % $ 1,721,931 100.0 % $ 1,689,737 100.0 % $ 1,628,480 100.0 % $ 1,665,554 100.0 % $ 1,602,030 100.0 % $ 1,567,598 100.0 % $ 1,606,945 100.0 % Less: Allowance for loan losses (20,208) (20,032) (20,031) (20,031) (20,032) (19,706) (19,381) (19,381) Net deferred loan costs (fees) 4,060 3,183 2,915 2,780 915 347 (486) (1,162) Net loans $ 1,769,300 $ 1,705,082 $ 1,672,621 $ 1,611,229 $ 1,646,437 $ 1,582,671 $ 1,547,731 $ 1,586,402 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Deposits $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total Non-interest bearing demand deposits $ 476,697 23.1 % $ 535,186 25.9 % $ 512,284 25.1 % $ 495,811 25.0 % $ 488,838 26.0 % $ 463,868 25.2 % $ 478,705 26.4 % $ 419,796 23.8 % Interest-bearing demand deposits: NOW accounts(1) 253,148 12.3 % 293,558 14.2 % 338,789 16.6 % 345,087 17.4 % 267,594 14.2 % 294,261 16.0 % 254,060 14.0 % 245,274 13.9 % Money market accounts(1) 438,797 21.2 % 412,035 20.0 % 399,877 19.6 % 414,987 20.9 % 366,306 19.4 % 336,651 18.3 % 333,818 18.4 % 344,807 19.6 % Savings accounts 95,241 4.6 % 102,909 5.0 % 112,276 5.4 % 114,427 5.8 % 101,376 5.4 % 94,840 5.2 % 79,119 4.4 % 72,102 4.1 % Certificates of deposit $250,000 or more 314,738 15.2 % 280,027 13.6 % 255,411 12.5 % 241,230 12.1 % 250,204 13.3 % 232,722 12.7 % 243,662 13.4 % 265,772 15.1 % Less than $250,000 89,247 4.3 % 88,421 4.3 % 87,505 4.3 % 91,050 4.6 % 103,084 5.5 % 104,463 5.7 % 112,991 6.2 % 119,828 6.8 % QwickRate® certificates of deposit 22,163 1.1 % 20,154 1.0 % 20,154 1.0 % 23,136 1.2 % 25,122 1.3 % 28,998 1.6 % 31,481 1.7 % 38,565 2.2 % IntraFi® certificates of deposit 25,757 1.2 % 46,305 2.2 % 32,686 1.6 % 39,628 2.0 % 61,281 3.3 % 66,926 3.6 % 60,761 3.3 % 38,284 2.2 % Brokered deposits 351,952 17.0 % 284,746 13.8 % 284,759 13.9 % 217,743 11.0 % 217,748 11.6 % 214,819 11.7 % 220,435 12.1 % 216,962 12.3 % Total deposits $ 2,067,740 100.0 % $ 2,063,341 100.0 % $ 2,043,741 100.0 % $ 1,983,099 100.0 % $ 1,881,553 100.0 % $ 1,837,548 100.0 % $ 1,815,032 100.0 % $ 1,761,390 100.0 % Borrowings Federal funds purchased $ 25,500 50.9 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % Federal Home Loan Bank advances - - 0.0 % - - 0.0 % - - 0.0 % 18,000 42.0 % 18,000 42.1 % 18,000 42.1 % 18,000 42.2 % 22,000 47.1 % Subordinated debt 24,624 49.1 % 24,603 100.0 % 49,560 100.0 % 24,845 58.0 % 24,728 57.9 % 24,716 57.9 % 24,704 57.8 % 24,692 52.9 % Total borrowings $ 50,124 100.0 % $ 24,603 100.0 % $ 49,560 100.0 % $ 42,845 100.0 % $ 42,728 100.0 % $ 42,716 100.0 % $ 42,704 100.0 % $ 46,692 100.0 % Total deposits and borrowings $ 2,117,864 $ 2,087,944 $ 2,093,301 $ 2,025,944 $ 1,924,281 $ 1,880,264 $ 1,857,736 $ 1,808,082 Core customer funding sources (2) $ 1,693,625 80.9 % $ 1,758,441 85.2 % $ 1,738,828 85.1 % $ 1,742,220 87.1 % $ 1,638,683 86.3 % $ 1,593,731 85.9 % $ 1,563,116 85.3 % $ 1,505,863 84.4 % Wholesale funding sources (3) 399,615 19.1 % 304,900 14.8 % 304,913 14.9 % 258,879 12.9 % 260,870 13.7 % 261,817 14.1 % 269,916 14.7 % 277,527 15.6 % Total funding sources $ 2,093,240 100.0 % $ 2,063,341 100.0 % $ 2,043,741 100.0 % $ 2,001,099 100.0 % $ 1,899,553 100.0 % $ 1,855,548 100.0 % $ 1,833,032 100.0 % $ 1,783,390 100.0 % (1) Includes IntraFi® accounts. (2) Includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits, which are maintained by customers. (3) Consists of QwickRate® certificates of deposit, brokered deposits, federal funds purchased and Federal Home Loan Bank advances. John Marshall Bancorp, Inc. Average Balance Sheets, Interest and Rates (unaudited) (Dollar amounts in thousands) Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Interest Income / Average Interest Income / Average Average Balance Expense Rate Average Balance Expense Rate Assets: Securities: Taxable $ 440,899 $ 8,183 1.86 % $ 275,071 $ 4,409 1.60 % Tax-exempt(1) 5,001 152 3.04 % 5,007 152 3.04 % Total securities $ 445,900 $ 8,335 1.87 % $ 280,078 $ 4,561 1.63 % Loans, net of unearned income(2): Taxable 1,652,940 73,497 4.45 % 1,577,418 68,685 4.35 % Tax-exempt(1) 24,211 993 4.10 % 19,631 924 4.71 % Total loans, net of unearned income $ 1,677,151 $ 74,490 4.44 % $ 1,597,049 $ 69,609 4.36 % Interest-bearing deposits in other banks $ 116,092 $ 1,482 1.28 % $ 135,360 $ 175 0.13 % Total interest-earning assets $ 2,239,143 $ 84,307 3.77 % $ 2,012,487 $ 74,345 3.69 % Total non-interest earning assets 36,624 31,132 Total assets $ 2,275,767 $ 2,043,619 Liabilities & Shareholders’ Equity: Interest-bearing deposits NOW accounts $ 311,950 $ 1,359 0.44 % $ 262,319 $ 798 0.30 % Money market accounts 395,369 3,340 0.84 % 337,993 1,256 0.37 % Savings accounts 108,178 504 0.47 % 83,032 300 0.36 % Time deposits 682,674 6,575 0.96 % 657,986 4,245 0.65 % Total interest-bearing deposits $ 1,498,171 $ 11,778 0.79 % $ 1,341,330 $ 6,599 0.49 % Federal funds purchased 386 15 3.89 % — — 0.00 % Subordinated debt 26,754 1,810 6.77 % 24,702 1,487 6.02 % Other borrowed funds 6,175 42 0.68 % 18,375 125 0.68 % Total interest-bearing liabilities $ 1,531,486 $ 13,645 0.89 % $ 1,384,407 $ 8,211 0.59 % Demand deposits 518,284 448,723 Other liabilities 16,518 13,146 Total liabilities $ 2,066,288 $ 1,846,276 Shareholders’ equity $ 209,479 $ 197,343 Total liabilities and shareholders’ equity $ 2,275,767 $ 2,043,619 Tax-equivalent net interest income and spread $ 70,662 2.88 % $ 66,134 3.10 % Less: tax-equivalent adjustment 241 226 Net interest income $ 70,421 $ 65,908 Tax-equivalent interest income/earnings assets 3.77 % 3.69 % Interest expense/earning assets 0.61 % 0.40 % Net interest margin(3) 3.16 % 3.29 % (1) Tax-equivalent income has been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $241 thousand and $226 thousand in 2022 and 2021, respectively. (2) The Company did not have any loans on non-accrual as of December 31, 2022 or December 31, 2021. (3) The net interest margin has been calculated on a tax-equivalent basis. John Marshall Bancorp, Inc. Average Balance Sheets, Interest and Rates (unaudited) (Dollar amounts in thousands) Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Interest Income / Average Interest Income / Average Average Balance Expense Rate Average Balance Expense Rate Assets: Securities: Taxable $ 463,961 $ 2,401 2.05 % $ 350,997 $ 1,292 1.46 % Tax-exempt(1) 4,995 38 3.02 % 5,010 38 3.01 % Total securities $ 468,956 $ 2,439 2.06 % $ 356,007 $ 1,330 1.48 % Loans, net of unearned income(2): Taxable 1,730,921 20,305 4.65 % 1,606,103 17,152 4.24 % Tax-exempt(1) 28,826 299 4.12 % 23,021 239 4.12 % Total loans, net of unearned income $ 1,759,747 $ 20,604 4.65 % $ 1,629,124 $ 17,391 4.24 % Interest-bearing deposits in other banks $ 60,358 $ 585 3.85 % $ 104,921 $ 41 0.16 % Total interest-earning assets $ 2,289,061 $ 23,628 4.10 % $ 2,090,052 $ 18,762 3.56 % Total non-interest earning assets 41,246 31,928 Total assets $ 2,330,307 $ 2,121,980 Liabilities & Shareholders’ Equity: Interest-bearing deposits NOW accounts $ 271,306 $ 530 0.78 % $ 281,690 $ 204 0.29 % Money market accounts 412,682 1,824 1.75 % 351,723 329 0.37 % Savings accounts 103,542 220 0.84 % 101,199 89 0.35 % Time deposits 753,228 3,114 1.64 % 642,346 709 0.44 % Total interest-bearing deposits $ 1,540,758 $ 5,688 1.46 % $ 1,376,958 $ 1,331 0.38 % Federal funds purchased 1,533 15 3.88 % — — 0.00 % Subordinated debt 24,611 349 5.63 % 24,720 372 5.97 % Other borrowed funds — — 0.00 % 18,001 31 0.68 % Total interest-bearing liabilities $ 1,566,902 $ 6,052 1.53 % $ 1,419,679 $ 1,734 0.48 % Demand deposits 538,403 480,824 Other liabilities 17,096 15,240 Total liabilities $ 2,122,401 $ 1,915,743 Shareholders’ equity $ 207,906 $ 206,237 Total liabilities and shareholders’ equity $ 2,330,307 $ 2,121,980 Tax-equivalent net interest income and spread $ 17,576 2.57 % $ 17,028 3.08 % Less: tax-equivalent adjustment 71 59 Net interest income $ 17,505 $ 16,969 Tax-equivalent interest income/earnings assets 4.10 % 3.56 % Interest expense/earning assets 1.05 % 0.33 % Net interest margin(3) 3.05 % 3.23 % (1) Tax-equivalent income has been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $71 thousand and $59 thousand in 2022 and 2021, respectively. (2) The Company did not have any loans on non-accrual as of December 31, 2022 or December 31, 2021. (3) The net interest margin has been calculated on a tax-equivalent basis. View source version on businesswire.com: https://www.businesswire.com/news/home/20230118005186/en/Contacts Christopher W. Bergstrom (703) 584-0840 Kent D. Carstater (703) 289-5922
John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported its financial results for the three and twelve months ended December 31, 2022. Fourth Quarter and Year-to-Date Highlights Record Earnings – The Company reported its sixteenth consecutive quarter of record earnings. Net income of $8.2 million for the fourth quarter of 2022 represented a $655 thousand or 8.7% increase over the $7.5 million reported for the fourth quarter of 2021. Earnings per diluted share for the three months ended December 31, 2022 were $0.58, a 7.4% increase over the $0.54 reported for the three months ended December 31, 2021. The Company reported record net income of $31.8 million for the year ended December 31, 2022, a $6.3 million or 24.9% increase over the $25.5 million reported for the same period of 2021. Earnings per diluted share for the year ended December 31, 2022 were $2.25, a 22.9% increase over the $1.83 reported for the same period of 2021. Robust Core Loan Growth – Excluding Paycheck Protection Program (“PPP”) loans, gross loans net of unearned income (“Core Loans”) grew $190.6 million or 11.9% from December 31, 2021 to December 31, 2022. Core Loans increased $64.4 million during the quarter ended December 31, 2022 or 14.8% annualized from September 30, 2022. The Company remains steadfast in adhering to our strict underwriting standards to maintain pristine asset quality. Consistently Strong Returns – Annualized Return on Average Assets (“ROAA”) was 1.40% and annualized Return on Average Equity (“ROAE”) was 15.65% for the three months ended December 31, 2022. ROAA and ROAE were 1.41% and 14.52%, respectively, for the three months ended December 31, 2021. Commitment to Cost Conscious Growth – Revenues (net interest income plus non-interest income) grew 16.8% annualized for the three months ended December 31, 2022 relative to the three months ended December 31, 2021. Over the same period, overhead decreased 11.9% annualized. The ratio of annualized non-interest expense to average assets was 1.27% for the fourth quarter of 2022 compared to 1.44% for the fourth quarter of 2021. The efficiency ratio for the fourth quarter of 2022 was 40.9% compared to 43.9% for the fourth quarter of 2021. No Non-performing Assets; No Loans More Than 30 Days Past Due – For the thirteenth consecutive quarter, the Company had no nonperforming loans, no other real estate owned, and no loans 30 days or more past due. There were no charge-offs during the quarter. The Company believes its allowance for loan losses is appropriate for the inherent risks and uncertainties associated with the portfolio. Chris Bergstrom, President and Chief Executive Officer, commented, “2022 was a remarkable year for John Marshall. We registered our shares with the SEC, listed our stock on Nasdaq, gained inclusion in the Russell 2000 Index, refinanced our subordinated debt to a lower rate, paid our first cash dividend, broadened our customer service and fee income capabilities by implementing an interest rate swap program, decreased overhead, maintained our outstanding asset quality and delivered our fourth consecutive year of record earnings. On behalf of the Company, I want to express appreciation for our employees and customers who made these many strategic goals reality. Looking forward, each year holds its own set of challenges and early signs indicate that 2023 will be no different. As interest rates have risen, depositors have many investment alternatives from which to choose and, as a result, deposit costs are rising. Certain economic data seem to point to a recession, which could moderate loan growth and impact borrowers’ ability to service their loans. Despite these potential hurdles, I remain confident in our people and our business model. We believe with our liquid, well-capitalized balance sheet, strong asset quality, robust underwriting and conservative culture that we are well prepared to manage for the potential challenges ahead.” Balance Sheet and Credit Quality Total assets were $2.35 billion at December 31, 2022, $2.31 billion at September 30, 2022 and $2.15 billion at December 31, 2021. During the fourth quarter of 2022, assets increased $42.7 million or 7.4% annualized primarily due to an increase in loans. Asset growth from December 31, 2021 to December 31, 2022 was $198.9 million or 9.3%. Total loans, net of unearned income, increased by 7.4% to $1.79 billion at December 31, 2022, compared to $1.67 billion at December 31, 2021. The year-over-year increase in the loan portfolio was primarily attributable to growth in the investor real estate and residential mortgage portfolios. Total loans, net of unearned income, increased $64.4 million during the quarter ended December 31, 2022 or 14.8% annualized from $1.73 billion at September 30, 2022. The increase in loans was primarily attributable to growth in the investor real estate, residential mortgage, and commercial owner-occupied real estate loan portfolios. The Company’s portfolio of investments in fixed income securities was $457.0 million at December 31, 2022, $467.1 million at September 30, 2022, and $344.8 million at December 31, 2021. All but $11.3 million of the fixed income portfolio is backed by the explicit or implicit guarantees of the United States Government or one of its agencies. Nearly 70% of the fixed income portfolio is invested in amortizing investments, which provides the Company with a source of steady cash flow to reinvest each month. For 2023, the Company anticipates primarily reinvesting fixed income cash flows into loans. At December 31, 2022, the fixed income portfolio had an estimated weighted average life of 4.5 years. The Company’s balance sheet remains highly liquid. In addition to deposits in banks and cash flows from fixed income securities, liquidity needs are also met with cash and cash equivalents and unencumbered securities classified as available-for-sale. Liquid assets totaled $335.8 million as of December 31, 2022 compared to $299.3 million at December 31, 2021. These amounts represented 14.3% and 16.8% of total assets as of December 31, 2022 and December 31, 2021, respectively. In addition, the Bank had secured borrowing capacity of $388 million at December 31, 2022. Total deposits were $2.07 billion at December 31, 2022, $2.06 billion at September 30, 2022, and $1.88 billion at December 31, 2021. Deposit growth was 9.9% during the past twelve months, as time deposits grew 22.3% and interest-bearing demand deposits grew 9.2%. Total borrowings, defined as federal funds purchased, Federal Home Loan Bank advances, and subordinated debt, increased by $25.5 million to $50.1 million at December 31, 2022 compared to $24.6 million at September 30, 2022. The increase during the quarter was due to $25.5 million in federal funds purchased. Federal Home Loan Bank advances decreased from $18.0 million at December 31, 2021 to zero at December 31, 2022 and were unchanged from September 30, 2022. Shareholders’ equity increased $4.3 million or 2.1% to $212.8 million at December 31, 2022 compared to $208.5 million at December 31, 2021, as a result of increases in retained earnings and additional paid-in capital, which were partially offset by the increase in the unrealized loss on our available-for-sale investment portfolio. Book value per share was $15.09 as of December 31, 2022 compared to $15.17 as of December 31, 2021. The year-over-year change in book value per share was primarily due to increased accumulated other comprehensive loss, increased share count from shareholder option exercises and restricted share award issuances, and cash dividends paid, partially offset by the Company’s earnings over the previous twelve months. The increase in accumulated other comprehensive loss was primarily attributable to increases in unrealized losses on our available-for-sale investment portfolio due to market value changes as a result of rising interest rates. Book value per share, excluding accumulated other comprehensive loss (a non-GAAP financial measure which is defined in the tables below) was $17.13 at December 31, 2022 compared to $15.20 at December 31, 2021. The Bank’s capital ratios remain well above regulatory thresholds for well-capitalized banks. As of December 31, 2022, the Bank’s total risk-based capital ratio was 15.6%, compared to 15.3% at December 31, 2021. The Company recorded no net charge-offs during the fourth quarter of 2022, the third quarter of 2022, and the fourth quarter of 2021. As of December 31, 2022, the Company had no non-accrual loans, no loans more than 30 days past due, and no other real estate owned assets. At December 31, 2022, the allowance for loan losses was $20.2 million or 1.13% of outstanding loans, net of unearned income, compared to $20.0 million or 1.20% of outstanding loans, net of unearned income, at September 30, 2022. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, was primarily due to changes in the loan portfolio’s composition as well as net changes in qualitative adjustments. As of December 31, 2022, the Company continued to account for its allowance using an incurred loss model. Beginning on January 1, 2023, and in all subsequent periods, the Company will determine its allowance using the current expected credit losses standard (ASC 326). Income Statement Review Quarterly Results Net income for the fourth quarter of 2022 increased $655 thousand or 8.7% to $8.2 million compared to $7.5 million for the fourth quarter of 2021. Net interest income for the fourth quarter of 2022 increased $536 thousand or 3.2% compared to the fourth quarter of 2021, driven primarily by higher yields on interest-earning assets and growth in the Company’s loan and investment portfolios. The yield on interest earning assets was 4.10% for the fourth quarter of 2022 compared to 3.56% for the same period in 2021. The increase in yield on interest earning assets was primarily due to higher yields on the Company’s loan and investment portfolios and deposits in banks as a result of increases in interest rates during the year. The cost of interest-bearing liabilities was 1.53% for the fourth quarter of 2022 compared to 0.48% for the same quarter of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to a 1.08% increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW, and savings deposit accounts during the year. The annualized net interest margin for the fourth quarter of 2022 was 3.05% as compared to 3.23% for the same quarter of the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company’s loan and investment portfolios. The Company recorded a $175 thousand provision for loan losses for the fourth quarter of 2022, compared to a $325 thousand provision for the fourth quarter of 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy. Non-interest income increased $205 thousand or 40.0% during the fourth quarter of 2022 compared to the fourth quarter of 2021. The increase in non-interest income was primarily due to swap fee income of $127 thousand recognized during the quarter on the Company’s first back-to-back loan interest rate swap (“swap”). The Company enters into swaps with commercial loan customers to provide a facility for customers to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in exact offsetting terms to swaps that the Company enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities in the Consolidated Balance Sheet. The increase in non-interest income was also attributable to mark-to-market adjustments of $35 thousand resulting from an increase in value of investments related to the Company’s nonqualified deferred compensation plan, and increases in services charges and fees on deposit accounts. The increase was partially offset by modest decreases in insurance commissions and bank owned life insurance (“BOLI”) income. Non-interest expense decreased $230 thousand or 3.0% for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. The decrease in non-interest expense was primarily due to decreases in salaries and employee benefits expense, occupancy expense, furniture and equipment expense, marketing expense, and a release in unfunded commitment reserves during the quarter. The decrease in salaries and employee benefits was driven by a decrease in incentive and deferred compensation expense when compared to the prior year quarter due to changes in staffing. Two of the Company’s former senior executive vice presidents became advisors to the Chief Executive Officer effective June 1, 2022. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The decrease in marketing expense was primarily due to lower marketing vendor related expenses incurred. The release in unfunded commitment reserves was primarily due to a decrease in unfunded commitment balances year-over-year as a result of credit line utilization. The decrease in non-interest expense was partially offset by increases in data processing fees and professional service fees. The increase in data processing fees was due to new investments in technology solutions to support our operations. The Company regularly evaluates technology and invests in applications enabling greater efficiencies or customer experience. The increase in professional service fees was due to expenses incurred in conjunction with the back-to-back loan interest rate swap, as well as increased vendor services supporting our public company reporting requirements that did not exist in the prior year. For the three months ended December 31, 2022, annualized non-interest expense to average assets was 1.27% compared to 1.44% for the three months ended December 31, 2021. The decrease was primarily due to lower salaries and employee benefit expense coupled with continued cost consciousness. For the three months ended December 31, 2022, the annualized efficiency ratio was 40.9% compared to 43.9% for the three months ended December 31, 2021. The decrease was primarily due to increases in net interest income and non-interest income as well as a decrease in non-interest expense. Year-to-Date Results Net income for the year ended December 31, 2022 increased $6.3 million or 24.9% to $31.8 million compared to $25.5 million for the year ended December 31, 2021. The results for the year ended December 31, 2022 reflect a combination of the impact of an increase in net interest income, a decrease in provision for loan loss expense, and a decrease in non-interest expense, which were partially offset by a decrease in non-interest income. Net interest income for the year ended December 31, 2022 increased $4.5 million or 6.8% compared to the year ended December 31, 2021 and was driven primarily by growth in the Company’s loan and investment portfolios. The yield on interest earning assets was 3.77% for the year ended December 31, 2022 compared to 3.69% for the same period in 2021. The increase in yield on interest earning assets was primarily due to an increase in interest rates during the year. The cost of interest-bearing liabilities was 0.89% for the year ended December 31, 2022 compared to 0.59% for the same period of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to increases in the cost of interest-bearing deposits as a result of an increase in rates offered on time, savings, money market, and NOW deposit accounts during the second half of 2022. Net interest margin for the year ended December 31, 2022 was 3.16% as compared to 3.29% for the same period of the prior year. The decrease in net interest margin was primarily due to increases in the cost of interest-bearing deposits and accelerated recognition of prior debt issuance costs associated with the refinancing of the subordinated debt, which was partially offset by an increase in yield on all interest-earning assets. The Company recorded a $175 thousand provision for loan losses for the year ended December 31, 2022, compared to a $3.1 million provision for the year ended December 31, 2021. The decrease in the provision for loan losses as compared to the same period in 2021 primarily reflects changes in the Company’s evaluation of environmental factors impacting the Company’s loan portfolio during 2022. During 2021, the environmental or qualitative factor allocations within the allowance for loan losses were adjusted to account for the risks to certain industry subgroups and portfolio segments within our portfolio as a result of the continuing COVID-19 pandemic. The decrease in the provision for loan losses primarily reflects an estimated decrease in uncertainty as it relates to the estimated impact of the COVID-19 pandemic on the Company’s loan portfolio and the broader economy. Non-interest income decreased $28 thousand or 1.6% during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in non-interest income was primarily due to mark-to-market adjustments of $(548) thousand resulting from a reduction in value of investments related to the Company’s nonqualified deferred compensation plan. The decrease in non-interest income was partially offset by a non-recurring BOLI related benefit claim realized and interest rate swap fee income recognized, as well as increases in insurance commissions and interchange and other fee income due to higher production and increased customer activity, respectively. During the year ended December 31, 2021, the Company also realized a $10 thousand gain on a called security. Excluding the impacts of the gain on the called security, mark-to-market adjustments, and BOLI related benefit claim, non-interest income increased $373 thousand or 24.6%. Non-interest expense decreased $388 thousand or 1.2% during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in non-interest expense was primarily due to non-recurring legal and professional fees incurred in 2021, as well as decreases in marketing expense, FDIC insurance fees, and salaries and benefit expense. The decrease in marketing expense was primarily due to lower marketing vendor related expenses. The decrease in FDIC insurance fees was primarily due to lower insurance premiums. The decrease in salaries and benefit expense was primarily due to lower accruals related to deferred compensation and employer health insurance fees. The decrease in non-interest expense was partially offset by increases in state franchise taxes as a result of an increase in the Bank’s equity year-over-year and data processing fees due to new investments in technology solutions to support our operations. For the year ended December 31, 2022, non-interest expense to average assets was 1.40% compared to 1.58% for the year ended December 31, 2021. The decrease was primarily due to non-recurring legal and professional fees incurred in 2021 as well as decreases in marketing expense and FDIC insurance premiums. For the year ended December 31, 2022, the efficiency ratio was 44.2% compared to 47.7% for the year ended December 31, 2021. The decrease was primarily due to the increase in net interest income coupled with a decrease in non-interest expense. The decrease was partially offset by a modest decrease in non-interest income. About John Marshall Bancorp, Inc. John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is a $2.35 billion bank headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. with one loan production office in Arlington, Virginia. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington D.C. Metro area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated Relationship Managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including Charter and Private Schools, Government Contractors, Health Services, Nonprofits and Associations, Professional Services, Property Management Companies, and Title Companies. Learn more at www.johnmarshallbank.com. In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiary include, but are not limited to the following: changes in interest rates, general economic conditions, public health crises (such as the governmental, social and economic effects of COVID-19), levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines, and other conditions which by their nature are not susceptible to accurate forecast, and are subject to significant uncertainty. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. John Marshall Bancorp, Inc. Financial Highlights (Unaudited) (Dollar amounts in thousands, except per share data) At or For the Three Months Ended At or For the Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Selected Balance Sheet Data Cash and cash equivalents $ 61,599 $ 105,799 $ 61,599 $ 105,799 Total investment securities 463,531 351,629 463,531 351,629 Loans, net of unearned income 1,789,508 1,666,469 1,789,508 1,666,469 Allowance for loan losses (20,208) (20,032) (20,208) (20,032) Total assets 2,348,235 2,149,309 2,348,235 2,149,309 Non-interest bearing demand deposits 476,697 488,838 476,697 488,838 Interest bearing deposits 1,591,043 1,392,715 1,591,043 1,392,715 Total deposits 2,067,740 1,881,553 2,067,740 1,881,553 Shareholders' equity 212,800 208,470 212,800 208,470 Summary Results of Operations Interest income $ 23,557 $ 18,703 $ 84,066 $ 74,119 Interest expense 6,052 1,734 13,645 8,211 Net interest income 17,505 16,969 70,421 65,908 Provision for loan losses 175 325 175 3,105 Net interest income after provision for loan losses 17,330 16,644 70,246 62,803 Non-interest income 718 513 1,691 1,719 Non-interest expense 7,449 7,679 31,874 32,262 Income before income taxes 10,599 9,478 40,063 32,260 Net income 8,202 7,547 31,803 25,461 Per Share Data and Shares Outstanding Earnings per share - basic $ 0.58 $ 0.55 $ 2.27 $ 1.87 Earnings per share - diluted $ 0.58 $ 0.54 $ 2.25 $ 1.83 Book value per share $ 15.09 $ 15.17 $ 15.09 $ 15.17 Book value per share, excluding accumulated other comprehensive loss (1) $ 17.13 $ 15.20 $ 17.13 $ 15.20 Weighted average common shares (basic) 14,019,429 13,614,760 13,931,841 13,581,586 Weighted average common shares (diluted) 14,131,352 13,914,724 14,084,427 13,879,595 Common shares outstanding at end of period 14,098,986 13,745,598 14,098,986 13,745,598 Performance Ratios Return on average assets (annualized) 1.40 % 1.41 % 1.40 % 1.25 % Return on average equity (annualized) 15.65 % 14.52 % 15.18 % 12.90 % Net interest margin 3.05 % 3.23 % 3.16 % 3.29 % Non-interest income as a percentage of average assets (annualized) 0.12 % 0.10 % 0.07 % 0.08 % Non-interest expense to average assets (annualized) 1.27 % 1.44 % 1.40 % 1.58 % Efficiency ratio 40.9 % 43.9 % 44.2 % 47.7 % Asset Quality Non-performing assets to total assets - - % - - % - - % - - % Non-performing loans to total loans - - % - - % - - % - - % Allowance for loan losses to non-performing loans N/M N/M N/M N/M Allowance for loan losses to total loans (2) 1.13 % 1.20 % 1.13 % 1.20 % Net charge-offs (recoveries) to average loans (annualized) - - % - - % - - % - - % Loans 30-89 days past due and accruing interest $ - - $ - - $ - - $ - - Non-accrual loans - - - - - - - - Other real estate owned - - - - - - - - Non-performing assets (3) - - - - - - - - Troubled debt restructurings (total) 418 549 418 549 Performing in accordance with modified terms 418 549 418 549 Not performing in accordance with modified terms - - - - - - - - Capital Ratios (Bank Level) Equity / assets 10.0 % 10.8 % 10.0 % 10.8 % Total risk-based capital ratio 15.6 % 15.3 % 15.6 % 15.3 % Tier 1 risk-based capital ratio 14.4 % 14.0 % 14.4 % 14.0 % Leverage ratio 11.3 % 11.0 % 11.3 % 11.0 % Common equity tier 1 ratio 14.4 % 14.0 % 14.4 % 14.0 % Other Information Number of full time equivalent employees 139 138 139 138 # Full service branch offices 8 8 8 8 # Loan production or limited service branch offices 1 1 1 1 (1) Book value per share excluding accumulated other comprehensive loss, is a non-GAAP financial measure. It is calculated by dividing the total of shareholders’ equity less the entirety of the balance of our accumulated other comprehensive loss by the number of shares outstanding as of the measurement date. (2) The allowance for loan losses to total loans, excluding PPP loans, net of unearned income of $132 thousand, was 1.13% at December 31, 2022. The allowance for loan losses to total loans, excluding PPP loans, net of unearned income of $67.7 million, was 1.25% at December 31, 2021. PPP loans received no allocations in the allowance estimate due to the underlying guarantees. (3) Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest, and other real estate owned. Does not include troubled debt restructurings 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 2022 2022 2021 Months Year Assets (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 6,583 $ 14,957 $ 2,920 (56.0) % 125.4 % Interest-bearing deposits in banks 55,016 59,799 102,879 (8.0) % (46.5) % Securities available-for-sale, at fair value 357,576 366,546 239,300 (2.4) % 49.4 % Securities held-to-maturity, fair value of $81,161, $81,765, and $103,258 at 12/31/2022, 9/30/2022, and 12/31/2021, respectively. 99,415 100,598 105,509 (1.2) % (5.8) % Restricted securities, at cost 4,425 4,421 4,951 0.1 % (10.6) % Equity securities, at fair value 2,115 1,913 1,869 10.6 % 13.2 % Loans, net of unearned income 1,789,508 1,725,114 1,666,469 3.7 % 7.4 % Allowance for loan losses (20,208) (20,032) (20,032) 0.9 % 0.9 % Net loans 1,769,300 1,705,082 1,646,437 3.8 % 7.5 % Bank premises and equipment, net 1,219 1,331 1,620 (8.4) % (24.8) % Accrued interest receivable 5,531 4,744 4,943 16.6 % 11.9 % Bank owned life insurance 21,170 21,071 20,998 0.5 % 0.8 % Right of use assets 4,611 3,936 4,913 17.1 % (6.1) % Other assets 21,274 21,142 12,970 0.6 % 64.0 % Total assets $ 2,348,235 $ 2,305,540 $ 2,149,309 1.9 % 9.3 % Liabilities and Shareholders' Equity Liabilities Deposits: Non-interest bearing demand deposits $ 476,697 $ 535,186 $ 488,838 (10.9) % (2.5) % Interest-bearing demand deposits 691,945 705,593 633,901 (1.9) % 9.2 % Savings deposits 95,241 102,909 101,376 (7.5) % (6.1) % Time deposits 803,857 719,653 657,438 11.7 % 22.3 % Total deposits 2,067,740 2,063,341 1,881,553 0.2 % 9.9 % Federal funds purchased 25,500 - - - - N/M N/M Federal Home Loan Bank advances - - - - 18,000 N/M N/M Subordinated debt 24,624 24,603 24,728 0.1 % (0.4) % Accrued interest payable 1,035 643 843 61.0 % 22.8 % Lease liabilities 4,858 4,186 5,182 16.1 % (6.3) % Other liabilities 11,678 10,555 10,533 10.6 % 10.9 % Total liabilities 2,135,435 2,103,328 1,940,839 1.5 % 10.0 % Shareholders' Equity Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued - - - - - - N/M N/M Common stock, nonvoting, par value $0.01 per share; authorized 1,000,000 shares; none issued - - - - - - N/M N/M Common stock, voting, par value $0.01 per share; authorized 30,000,000 shares; issued and outstanding, 14,098,986 at 12/31/2022 including 55,185 unvested shares, 14,070,080 shares at 9/30/2022 including 58,046 unvested shares and 13,745,598 at 12/31/2021, including 75,826 unvested shares 141 140 137 0.7 % 2.9 % Additional paid-in capital 94,726 94,560 91,107 0.2 % 4.0 % Retained earnings 146,630 138,428 117,626 5.9 % 24.7 % Accumulated other comprehensive loss (28,697) (30,916) (400) N/M N/M Total shareholders' equity 212,800 202,212 208,470 5.2 % 2.1 % Total liabilities and shareholders' equity $ 2,348,235 $ 2,305,540 $ 2,149,309 1.9 % 9.3 % 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, 2022 2021 % Change 2022 2021 % Change (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest and Dividend Income Interest and fees on loans $ 20,541 $ 17,340 18.5 % $ 74,281 $ 69,415 7.0 % Interest on investment securities, taxable 2,337 1,225 90.8 % 7,934 4,146 91.4 % Interest on investment securities, tax-exempt 30 30 0.0 % 120 120 0.0 % Dividends 64 67 (4.5) % 249 263 (5.3) % Interest on deposits in banks 585 41 N/M 1,482 175 N/M Total interest and dividend income 23,557 18,703 26.0 % 84,066 74,119 13.4 % Interest Expense Deposits 5,688 1,331 327.3 % 11,778 6,599 78.5 % Federal funds purchased 15 - - N/M 15 - - N/M Federal Home Loan Bank advances - - 31 N/M 42 125 (66.4) % Subordinated debt 349 372 (6.2) % 1,810 1,487 21.7 % Total interest expense 6,052 1,734 249.0 % 13,645 8,211 66.2 % Net interest income 17,505 16,969 3.2 % 70,421 65,908 6.8 % Provision for Loan Losses 175 325 (46.2) % 175 3,105 (94.4) % Net interest income after provision for loan losses 17,330 16,644 4.1 % 70,246 62,803 11.9 % Non-interest Income Service charges on deposit accounts 84 74 13.5 % 324 544 (40.4) % Bank owned life insurance 99 102 (2.9) % 544 411 32.4 % Other service charges and fees 187 138 35.5 % 656 195 236.4 % Gains on securities - - - - N/M - - 10 N/M Insurance commissions 70 79 (11.4) % 382 284 34.5 % Other income (loss) 278 120 131.7 % (215) 275 N/M Total non-interest income 718 513 40.0 % 1,691 1,719 (1.6) % Non-interest Expenses Salaries and employee benefits 4,436 4,765 (6.9) % 20,190 20,411 (1.1) % Occupancy expense of premises 458 480 (4.6) % 1,893 1,985 (4.6) % Furniture and equipment expenses 336 363 (7.4) % 1,325 1,436 (7.7) % Other expenses 2,219 2,071 7.1 % 8,466 8,430 0.4 % Total non-interest expense 7,449 7,679 (3.0) % 31,874 32,262 (1.2) % Income before income taxes 10,599 9,478 11.8 % 40,063 32,260 24.2 % Income tax Expense 2,397 1,931 24.1 % 8,260 6,799 21.5 % Net income $ 8,202 $ 7,547 8.7 % $ 31,803 $ 25,461 24.9 % Earnings Per Share Basic $ 0.58 $ 0.55 5.5 % $ 2.27 $ 1.87 21.5 % Diluted $ 0.58 $ 0.54 7.4 % $ 2.25 $ 1.83 22.9 % John Marshall Bancorp, Inc. Historical Trends - Quarterly Financial Data (Unaudited) (Dollar amounts in thousands, except per share data) 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Profitability for the Quarter: Interest income $ 23,557 $ 21,208 $ 19,555 $ 19,745 $ 18,703 $ 18,042 $ 18,627 $ 18,747 Interest expense 6,052 3,516 2,247 1,829 1,734 1,876 2,136 2,465 Net interest income 17,505 17,692 17,308 17,916 16,969 16,166 16,491 16,282 Provision for loan losses 175 - - - - - - 325 325 90 2,365 Non-interest income 718 450 109 414 513 325 417 464 Non-interest expense 7,449 7,958 7,681 8,786 7,679 7,623 9,067 7,893 Income before income taxes 10,599 10,184 9,736 9,544 9,478 8,543 7,751 6,488 Income tax expense 2,397 2,139 1,854 1,870 1,931 1,782 1,672 1,414 Net income $ 8,202 $ 8,045 $ 7,882 $ 7,674 $ 7,547 $ 6,761 $ 6,079 $ 5,074 Financial Performance: Return on average assets (annualized) 1.40 % 1.38 % 1.41 % 1.40 % 1.41 % 1.30 % 1.20 % 1.05 % Return on average equity (annualized) 15.65 % 15.07 % 15.28 % 14.76 % 14.52 % 13.35 % 12.64 % 10.89 % Net interest margin 3.05 % 3.10 % 3.16 % 3.34 % 3.23 % 3.15 % 3.32 % 3.44 % Non-interest income as a percentage of average assets (annualized) 0.12 % 0.08 % 0.02 % 0.08 % 0.10 % 0.06 % 0.08 % 0.10 % Non-interest expense to average assets (annualized) 1.27 % 1.36 % 1.38 % 1.61 % 1.44 % 1.46 % 1.79 % 1.64 % Efficiency ratio 40.9 % 43.9 % 44.1 % 47.9 % 43.9 % 46.2 % 53.6 % 47.1 % Per Share Data: Earnings per share - basic $ 0.58 $ 0.57 $ 0.56 $ 0.55 $ 0.55 $ 0.50 $ 0.45 $ 0.37 Earnings per share - diluted $ 0.58 $ 0.57 $ 0.56 $ 0.55 $ 0.54 $ 0.48 $ 0.44 $ 0.37 Book value per share $ 15.09 $ 14.37 $ 14.80 $ 14.68 $ 15.17 $ 14.82 $ 14.32 $ 13.85 Dividends declared per share $ - - $ - - $ - - $ 0.20 $ - - $ - - $ - - $ - - Weighted average common shares (basic) 14,019,429 13,989,414 13,932,256 13,783,034 13,614,760 13,580,538 13,572,779 13,557,779 Weighted average common shares (diluted) 14,131,352 14,108,286 14,085,160 13,991,692 13,914,724 13,883,104 13,868,147 13,809,751 Common shares outstanding at end of period 14,098,986 14,070,080 14,026,589 13,950,570 13,745,598 13,644,985 13,639,173 13,634,754 Non-interest Income: Service charges on deposit accounts $ 84 $ 79 $ 84 $ 77 $ 74 $ 70 $ 60 $ 58 Bank owned life insurance 99 255 95 95 102 102 100 107 Other service charges and fees 187 175 157 137 138 120 115 104 Gains on securities - - - - - - - - - - - - - - 10 Insurance commissions 70 47 44 221 79 28 22 155 Other income (loss) 278 (106) (271) (116) 120 5 120 30 Total non-interest income $ 718 $ 450 $ 109 $ 414 $ 513 $ 325 $ 417 $ 464 Non-interest Expenses: Salaries and employee benefits $ 4,436 $ 5,072 $ 4,655 $ 6,027 $ 4,765 $ 4,977 $ 5,680 $ 4,989 Occupancy expense of premises 458 461 482 493 480 484 514 507 Furniture and equipment expenses 336 323 341 325 363 373 378 322 Other expenses 2,219 2,102 2,203 1,941 2,071 1,789 2,495 2,075 Total non-interest expenses $ 7,449 $ 7,958 $ 7,681 $ 8,786 $ 7,679 $ 7,623 $ 9,067 $ 7,893 Balance Sheets at Quarter End: Total loans $ 1,789,508 $ 1,725,114 $ 1,692,652 $ 1,631,260 $ 1,666,469 $ 1,602,377 $ 1,567,112 $ 1,605,783 Allowance for loan losses (20,208) (20,032) (20,031) (20,031) (20,032) (19,706) (19,381) (19,381) Investment securities 463,531 473,478 473,914 409,692 351,629 348,742 306,030 219,106 Interest-earning assets 2,308,055 2,258,822 2,274,968 2,217,553 2,121,407 2,062,000 2,032,235 1,979,848 Total assets 2,348,235 2,305,540 2,316,374 2,249,609 2,149,309 2,095,504 2,065,895 2,009,988 Total deposits 2,067,740 2,063,341 2,043,741 1,983,099 1,881,553 1,837,548 1,815,032 1,761,390 Total interest-bearing liabilities 1,641,167 1,552,758 1,581,017 1,530,133 1,435,443 1,416,396 1,379,031 1,388,286 Total shareholders' equity 212,800 202,212 207,530 204,855 208,470 202,222 195,246 188,904 Quarterly Average Balance Sheets: Total gross loans $ 1,759,747 $ 1,684,796 $ 1,641,914 $ 1,620,533 $ 1,629,124 $ 1,580,695 $ 1,602,125 $ 1,575,847 Allowance for loan losses (20,042) (20,032) (20,031) (20,032) (19,889) (19,525) (19,530) (17,816) Investment securities 468,956 488,860 447,688 376,608 356,007 325,027 256,671 180,180 Interest-earning assets 2,289,061 2,277,325 2,204,709 2,183,897 2,090,052 2,038,384 1,996,555 1,922,835 Total assets 2,330,307 2,314,825 2,240,119 2,216,131 2,121,980 2,069,143 2,027,364 1,954,088 Total deposits 2,079,161 2,057,640 1,980,231 1,946,882 1,857,782 1,812,635 1,820,939 1,709,678 Total interest-bearing liabilities 1,566,902 1,547,766 1,504,574 1,505,854 1,419,679 1,384,867 1,381,583 1,350,742 Total shareholders' equity 207,906 212,147 206,967 210,900 206,237 200,990 192,918 188,995 Financial Measures: Average equity to average assets 8.9 % 9.2 % 9.2 % 9.5 % 9.7 % 9.7 % 9.5 % 9.7 % Investment securities to earning assets 20.1 % 21.0 % 20.8 % 18.5 % 16.6 % 16.9 % 15.1 % 11.1 % Loans to earning assets 77.5 % 76.4 % 74.4 % 73.6 % 78.6 % 77.7 % 77.1 % 81.1 % Loans to assets 76.2 % 74.8 % 73.1 % 72.5 % 77.5 % 76.5 % 75.9 % 79.9 % Loans to deposits 86.5 % 83.6 % 82.8 % 82.3 % 88.6 % 87.2 % 86.3 % 91.2 % Capital Ratios (Bank Level): Equity / assets 10.0 % 9.7 % 9.9 % 10.2 % 10.8 % 10.8 % 10.6 % 10.5 % Total risk-based capital ratio 15.6 % 15.4 % 15.1 % 15.4 % 15.3 % 15.2 % 15.0 % 14.6 % Tier 1 risk-based capital ratio 14.4 % 14.3 % 14.0 % 14.2 % 14.0 % 14.0 % 13.9 % 13.4 % Leverage ratio 11.3 % 11.0 % 11.0 % 10.8 % 11.0 % 10.8 % 10.7 % 10.8 % Common equity tier 1 ratio 14.4 % 14.3 % 14.0 % 14.2 % 14.0 % 14.0 % 12.3 % 13.4 % John Marshall Bancorp, Inc. Loan, Deposit and Borrowing Detail (Unaudited) (Dollar amounts in thousands) 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Loans $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total Commercial business loans $ 44,788 2.5 % $ 44,967 2.6 % $ 47,654 2.8 % $ 52,569 3.2 % $ 53,378 3.2 % $ 53,166 3.3 % $ 55,375 3.5 % $ 60,637 3.8 % Commercial PPP loans 136 0.0 % 138 0.0 % 224 0.0 % 7,781 0.5 % 69,567 4.2 % 75,496 4.7 % 82,190 5.2 % 117,796 7.3 % Commercial owner-occupied real estate loans 366,131 20.5 % 362,346 21.1 % 378,457 22.4 % 339,933 20.9 % 345,272 20.7 % 326,585 20.4 % 320,519 20.4 % 307,918 19.2 % Total business loans 411,055 23.0 % 407,451 23.7 % 426,335 25.2 % 400,283 24.6 % 468,217 28.1 % 455,247 28.4 % 458,084 29.2 % 486,351 30.3 % Investor real estate loans 662,769 37.1 % 622,415 36.1 % 598,501 35.5 % 553,093 34.0 % 523,038 31.4 % 519,384 32.4 % 505,605 32.3 % 502,940 31.3 % Construction & development loans 195,027 11.0 % 199,324 11.6 % 189,644 11.2 % 219,160 13.4 % 231,090 13.9 % 228,993 14.3 % 219,175 14.0 % 250,208 15.6 % Multi-family loans 89,227 5.0 % 106,460 6.2 % 106,236 6.3 % 99,100 6.1 % 100,132 6.0 % 81,226 5.1 % 92,203 5.9 % 84,689 5.3 % Total commercial real estate loans 947,023 53.1 % 928,199 53.9 % 894,381 53.0 % 871,353 53.5 % 854,260 51.3 % 829,603 51.8 % 816,983 52.1 % 837,837 52.2 % Residential mortgage loans 426,841 23.9 % 385,696 22.4 % 368,370 21.8 % 356,331 21.9 % 342,491 20.6 % 316,549 19.8 % 291,615 18.6 % 281,964 17.5 % Consumer loans 529 0.0 % 585 0.0 % 651 0.0 % 513 0.0 % 586 0.0 % 631 0.0 % 916 0.1 % 793 0.0 % Total loans $ 1,785,448 100.0 % $ 1,721,931 100.0 % $ 1,689,737 100.0 % $ 1,628,480 100.0 % $ 1,665,554 100.0 % $ 1,602,030 100.0 % $ 1,567,598 100.0 % $ 1,606,945 100.0 % Less: Allowance for loan losses (20,208) (20,032) (20,031) (20,031) (20,032) (19,706) (19,381) (19,381) Net deferred loan costs (fees) 4,060 3,183 2,915 2,780 915 347 (486) (1,162) Net loans $ 1,769,300 $ 1,705,082 $ 1,672,621 $ 1,611,229 $ 1,646,437 $ 1,582,671 $ 1,547,731 $ 1,586,402 2022 2021 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 Deposits $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total $ Amount % of Total Non-interest bearing demand deposits $ 476,697 23.1 % $ 535,186 25.9 % $ 512,284 25.1 % $ 495,811 25.0 % $ 488,838 26.0 % $ 463,868 25.2 % $ 478,705 26.4 % $ 419,796 23.8 % Interest-bearing demand deposits: NOW accounts(1) 253,148 12.3 % 293,558 14.2 % 338,789 16.6 % 345,087 17.4 % 267,594 14.2 % 294,261 16.0 % 254,060 14.0 % 245,274 13.9 % Money market accounts(1) 438,797 21.2 % 412,035 20.0 % 399,877 19.6 % 414,987 20.9 % 366,306 19.4 % 336,651 18.3 % 333,818 18.4 % 344,807 19.6 % Savings accounts 95,241 4.6 % 102,909 5.0 % 112,276 5.4 % 114,427 5.8 % 101,376 5.4 % 94,840 5.2 % 79,119 4.4 % 72,102 4.1 % Certificates of deposit $250,000 or more 314,738 15.2 % 280,027 13.6 % 255,411 12.5 % 241,230 12.1 % 250,204 13.3 % 232,722 12.7 % 243,662 13.4 % 265,772 15.1 % Less than $250,000 89,247 4.3 % 88,421 4.3 % 87,505 4.3 % 91,050 4.6 % 103,084 5.5 % 104,463 5.7 % 112,991 6.2 % 119,828 6.8 % QwickRate® certificates of deposit 22,163 1.1 % 20,154 1.0 % 20,154 1.0 % 23,136 1.2 % 25,122 1.3 % 28,998 1.6 % 31,481 1.7 % 38,565 2.2 % IntraFi® certificates of deposit 25,757 1.2 % 46,305 2.2 % 32,686 1.6 % 39,628 2.0 % 61,281 3.3 % 66,926 3.6 % 60,761 3.3 % 38,284 2.2 % Brokered deposits 351,952 17.0 % 284,746 13.8 % 284,759 13.9 % 217,743 11.0 % 217,748 11.6 % 214,819 11.7 % 220,435 12.1 % 216,962 12.3 % Total deposits $ 2,067,740 100.0 % $ 2,063,341 100.0 % $ 2,043,741 100.0 % $ 1,983,099 100.0 % $ 1,881,553 100.0 % $ 1,837,548 100.0 % $ 1,815,032 100.0 % $ 1,761,390 100.0 % Borrowings Federal funds purchased $ 25,500 50.9 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % $ - - 0.0 % Federal Home Loan Bank advances - - 0.0 % - - 0.0 % - - 0.0 % 18,000 42.0 % 18,000 42.1 % 18,000 42.1 % 18,000 42.2 % 22,000 47.1 % Subordinated debt 24,624 49.1 % 24,603 100.0 % 49,560 100.0 % 24,845 58.0 % 24,728 57.9 % 24,716 57.9 % 24,704 57.8 % 24,692 52.9 % Total borrowings $ 50,124 100.0 % $ 24,603 100.0 % $ 49,560 100.0 % $ 42,845 100.0 % $ 42,728 100.0 % $ 42,716 100.0 % $ 42,704 100.0 % $ 46,692 100.0 % Total deposits and borrowings $ 2,117,864 $ 2,087,944 $ 2,093,301 $ 2,025,944 $ 1,924,281 $ 1,880,264 $ 1,857,736 $ 1,808,082 Core customer funding sources (2) $ 1,693,625 80.9 % $ 1,758,441 85.2 % $ 1,738,828 85.1 % $ 1,742,220 87.1 % $ 1,638,683 86.3 % $ 1,593,731 85.9 % $ 1,563,116 85.3 % $ 1,505,863 84.4 % Wholesale funding sources (3) 399,615 19.1 % 304,900 14.8 % 304,913 14.9 % 258,879 12.9 % 260,870 13.7 % 261,817 14.1 % 269,916 14.7 % 277,527 15.6 % Total funding sources $ 2,093,240 100.0 % $ 2,063,341 100.0 % $ 2,043,741 100.0 % $ 2,001,099 100.0 % $ 1,899,553 100.0 % $ 1,855,548 100.0 % $ 1,833,032 100.0 % $ 1,783,390 100.0 % (1) Includes IntraFi® accounts. (2) Includes reciprocal IntraFi Demand®, IntraFi Money Market® and IntraFi CD® deposits, which are maintained by customers. (3) Consists of QwickRate® certificates of deposit, brokered deposits, federal funds purchased and Federal Home Loan Bank advances. John Marshall Bancorp, Inc. Average Balance Sheets, Interest and Rates (unaudited) (Dollar amounts in thousands) Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Interest Income / Average Interest Income / Average Average Balance Expense Rate Average Balance Expense Rate Assets: Securities: Taxable $ 440,899 $ 8,183 1.86 % $ 275,071 $ 4,409 1.60 % Tax-exempt(1) 5,001 152 3.04 % 5,007 152 3.04 % Total securities $ 445,900 $ 8,335 1.87 % $ 280,078 $ 4,561 1.63 % Loans, net of unearned income(2): Taxable 1,652,940 73,497 4.45 % 1,577,418 68,685 4.35 % Tax-exempt(1) 24,211 993 4.10 % 19,631 924 4.71 % Total loans, net of unearned income $ 1,677,151 $ 74,490 4.44 % $ 1,597,049 $ 69,609 4.36 % Interest-bearing deposits in other banks $ 116,092 $ 1,482 1.28 % $ 135,360 $ 175 0.13 % Total interest-earning assets $ 2,239,143 $ 84,307 3.77 % $ 2,012,487 $ 74,345 3.69 % Total non-interest earning assets 36,624 31,132 Total assets $ 2,275,767 $ 2,043,619 Liabilities & Shareholders’ Equity: Interest-bearing deposits NOW accounts $ 311,950 $ 1,359 0.44 % $ 262,319 $ 798 0.30 % Money market accounts 395,369 3,340 0.84 % 337,993 1,256 0.37 % Savings accounts 108,178 504 0.47 % 83,032 300 0.36 % Time deposits 682,674 6,575 0.96 % 657,986 4,245 0.65 % Total interest-bearing deposits $ 1,498,171 $ 11,778 0.79 % $ 1,341,330 $ 6,599 0.49 % Federal funds purchased 386 15 3.89 % — — 0.00 % Subordinated debt 26,754 1,810 6.77 % 24,702 1,487 6.02 % Other borrowed funds 6,175 42 0.68 % 18,375 125 0.68 % Total interest-bearing liabilities $ 1,531,486 $ 13,645 0.89 % $ 1,384,407 $ 8,211 0.59 % Demand deposits 518,284 448,723 Other liabilities 16,518 13,146 Total liabilities $ 2,066,288 $ 1,846,276 Shareholders’ equity $ 209,479 $ 197,343 Total liabilities and shareholders’ equity $ 2,275,767 $ 2,043,619 Tax-equivalent net interest income and spread $ 70,662 2.88 % $ 66,134 3.10 % Less: tax-equivalent adjustment 241 226 Net interest income $ 70,421 $ 65,908 Tax-equivalent interest income/earnings assets 3.77 % 3.69 % Interest expense/earning assets 0.61 % 0.40 % Net interest margin(3) 3.16 % 3.29 % (1) Tax-equivalent income has been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $241 thousand and $226 thousand in 2022 and 2021, respectively. (2) The Company did not have any loans on non-accrual as of December 31, 2022 or December 31, 2021. (3) The net interest margin has been calculated on a tax-equivalent basis. John Marshall Bancorp, Inc. Average Balance Sheets, Interest and Rates (unaudited) (Dollar amounts in thousands) Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Interest Income / Average Interest Income / Average Average Balance Expense Rate Average Balance Expense Rate Assets: Securities: Taxable $ 463,961 $ 2,401 2.05 % $ 350,997 $ 1,292 1.46 % Tax-exempt(1) 4,995 38 3.02 % 5,010 38 3.01 % Total securities $ 468,956 $ 2,439 2.06 % $ 356,007 $ 1,330 1.48 % Loans, net of unearned income(2): Taxable 1,730,921 20,305 4.65 % 1,606,103 17,152 4.24 % Tax-exempt(1) 28,826 299 4.12 % 23,021 239 4.12 % Total loans, net of unearned income $ 1,759,747 $ 20,604 4.65 % $ 1,629,124 $ 17,391 4.24 % Interest-bearing deposits in other banks $ 60,358 $ 585 3.85 % $ 104,921 $ 41 0.16 % Total interest-earning assets $ 2,289,061 $ 23,628 4.10 % $ 2,090,052 $ 18,762 3.56 % Total non-interest earning assets 41,246 31,928 Total assets $ 2,330,307 $ 2,121,980 Liabilities & Shareholders’ Equity: Interest-bearing deposits NOW accounts $ 271,306 $ 530 0.78 % $ 281,690 $ 204 0.29 % Money market accounts 412,682 1,824 1.75 % 351,723 329 0.37 % Savings accounts 103,542 220 0.84 % 101,199 89 0.35 % Time deposits 753,228 3,114 1.64 % 642,346 709 0.44 % Total interest-bearing deposits $ 1,540,758 $ 5,688 1.46 % $ 1,376,958 $ 1,331 0.38 % Federal funds purchased 1,533 15 3.88 % — — 0.00 % Subordinated debt 24,611 349 5.63 % 24,720 372 5.97 % Other borrowed funds — — 0.00 % 18,001 31 0.68 % Total interest-bearing liabilities $ 1,566,902 $ 6,052 1.53 % $ 1,419,679 $ 1,734 0.48 % Demand deposits 538,403 480,824 Other liabilities 17,096 15,240 Total liabilities $ 2,122,401 $ 1,915,743 Shareholders’ equity $ 207,906 $ 206,237 Total liabilities and shareholders’ equity $ 2,330,307 $ 2,121,980 Tax-equivalent net interest income and spread $ 17,576 2.57 % $ 17,028 3.08 % Less: tax-equivalent adjustment 71 59 Net interest income $ 17,505 $ 16,969 Tax-equivalent interest income/earnings assets 4.10 % 3.56 % Interest expense/earning assets 1.05 % 0.33 % Net interest margin(3) 3.05 % 3.23 % (1) Tax-equivalent income has been adjusted using the federal statutory tax rate of 21%. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $71 thousand and $59 thousand in 2022 and 2021, respectively. (2) The Company did not have any loans on non-accrual as of December 31, 2022 or December 31, 2021. (3) The net interest margin has been calculated on a tax-equivalent basis. View source version on businesswire.com: https://www.businesswire.com/news/home/20230118005186/en/