John Marshall Bancorp(JMSB) - 2023 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2023, decreased by $1.4 million or 17.9% to $6.3 million compared to $7.7 million for the same period in 2022[197] - Diluted earnings per share decreased by $0.11 or 20.0% to $0.44 for the three months ended March 31, 2023, compared to $0.55 for the same period in 2022[197] - Net interest income for the first quarter of 2023 decreased by $3.5 million or 19.2% compared to the first quarter of 2022, primarily due to rising costs of interest-bearing liabilities[198] - Non-interest income increased by $152 thousand or 36.7% during the first quarter of 2023 compared to the first quarter of 2022, driven by mark-to-market adjustments and increased customer activity[200] - Non-interest expense decreased by $1.0 million or 11.6% for the three months ended March 31, 2023, primarily due to reductions in salaries and employee benefits, professional fees, and occupancy expenses[201] Asset and Liability Management - As of March 31, 2023, the Company had total consolidated assets of $2.35 billion, total loans of $1.77 billion, total deposits of $2.09 billion, and total shareholders' equity of $220.8 million[192] - The Company's total assets increased by $3.0 million or 0.1% to $2.35 billion as of March 31, 2023, primarily due to a $40.3 million increase in interest-bearing deposits[232] - Total liabilities decreased by $5.0 million or 0.2% to $2.13 billion at March 31, 2023, mainly due to a $25.5 million decrease in federal funds purchased[233] - Shareholders' equity increased by $15.9 million or 7.8% to $220.8 million at March 31, 2023, with book value per share rising to $15.63[234] - Total deposits increased by $20.9 million or 1.0% to $2.09 billion as of March 31, 2023, compared to $2.07 billion at December 31, 2022[260] Capital Ratios and Returns - The return on average assets (ROAA) for the three months ended March 31, 2023, was 1.10%, down from 1.40% in the same period of 2022[202] - The return on average equity (ROAE) for the three months ended March 31, 2023, was 11.83%, compared to 14.76% for the same period in 2022[202] - The equity-to-total assets ratio was 10.3% as of March 31, 2023, compared to 10.2% as of March 31, 2022[195] - The total risk-based capital ratio increased to 16.1% as of March 31, 2023, from 15.4% as of March 31, 2022[195] Interest Income and Expense - Interest income increased by $3.7 million or 18.8% to $23.5 million for the three months ended March 31, 2023, compared to $19.8 million for the same period in 2022[216] - Interest expense increased by $7.2 million to $9.0 million for the three months ended March 31, 2023, compared to $1.8 million for the same period in 2022[220] - The net interest margin was 2.57% for the three months ended March 31, 2023, down from 3.34% for the same period in 2022, primarily due to increased costs of interest-bearing liabilities[209] - The average interest rate on total interest-bearing deposits increased to 2.18% for the three months ended March 31, 2023, compared to 0.37% for the same period in 2022[264] Loan and Deposit Trends - Average loans increased approximately $152.4 million between the three months ended March 31, 2023, and March 31, 2022, driven by growth in investor real estate, residential mortgage, and commercial owner-occupied real estate loan portfolios[217] - Total gross loans decreased by $18.2 million or 1.0% to $1.77 billion as of March 31, 2023, compared to $1.79 billion as of December 31, 2022[242] - Non-interest bearing demand deposits decreased by $29.2 million or 6.1% to $447.5 million as of March 31, 2023[260] - Interest-bearing deposits increased by $50.1 million or 3.2% to $1.64 billion as of March 31, 2023[261] Credit Quality - The Company recorded a $774 thousand recovery of provision for credit losses for the first quarter of 2023, compared to no provision for the first quarter of 2022[221] - The recovery of provision for credit losses in Q1 2023 was due to an $18.2 million decrease in gross loan balances and changes in qualitative factors in the CECL model[222] - The allowance for loan credit losses increased to $21.6 million or 1.22% of outstanding loans as of March 31, 2023, up from $20.2 million or 1.13% at December 31, 2022[255] - The company maintained no nonperforming assets as of March 31, 2023, indicating strong asset quality[247] - The company did not record any net charge-offs during the three months ended March 31, 2023[255] Investment Portfolio - The investment securities portfolio had a total carrying value of $438.7 million at March 31, 2023, down from $457.0 million at December 31, 2022[235] - Total held-to-maturity securities amounted to $98.5 million with a weighted-average yield of 1.31% as of March 31, 2023[241] - Total available-for-sale securities were $372.3 million with a weighted-average yield of 1.96% as of March 31, 2023[241] - The weighted average remaining life of the investment portfolio was approximately 4.4 years as of March 31, 2023[240] Liquidity and Borrowing Capacity - Total liquidity reached $852.6 million at March 31, 2023, an increase from $763.5 million at December 31, 2022, representing a growth of approximately 11.7%[274] - Uninsured deposits were estimated at $916.1 million as of March 31, 2023, down from $963.9 million at December 31, 2022, indicating a decrease of about 5.0%[265] - The Company has a total FHLB available borrowing capacity of $423.1 million as of March 31, 2023[273] - The Company has not utilized the BTFP program, which could potentially increase liquidity by approximately $35.2 million if accessed[274] Stock and Shareholder Information - The stock repurchase program allows for the repurchase of up to 700,000 shares, or 5.0% of outstanding shares, with no shares repurchased as of March 31, 2023[271] - Shareholders' equity increased by $8.0 million or 3.8% to $220.8 million at March 31, 2023, compared to $212.8 million at December 31, 2022[268]