John Marshall Bancorp(US:JMSB)2023-08-09 13:01Financial Performance - Net income for the six months ended June 30, 2023, decreased by $4.8 million or 30.6% to $10.8 million compared to $15.6 million for the same period in 2022[200]. - Diluted earnings per share for the six months ended June 30, 2023, were $0.76, a 31.3% decrease from $1.10 reported for the same period in 2022[200]. - Return on Average Assets (ROAA) decreased to 0.93% for the six months ended June 30, 2023, down from 1.41% in the same period of 2022[205]. - Net income for the three months ended June 30, 2023, decreased by $3.4 million or 43.0% to $4.5 million compared to $7.9 million for the same period in 2022[239]. - The effective tax rate for the six months ended June 30, 2023, was 21.6%, compared to 19.3% for the same period in 2022[238]. Asset and Liability Management - As of June 30, 2023, the Company reported total consolidated assets of $2.36 billion, total loans net of unearned income of $1.77 billion, total deposits of $2.05 billion, and total shareholders' equity of $219.0 million[194]. - Total assets increased by $16.0 million or 0.7% to $2.36 billion at June 30, 2023, primarily due to a $60.6 million increase in interest-bearing deposits[273]. - Total liabilities rose by $9.8 million or 0.5% to $2.15 billion at June 30, 2023, mainly due to a $54.0 million increase in borrowings[274]. - Shareholders' equity increased by $6.2 million or 2.9% to $219.0 million at June 30, 2023, attributed to net income and a decrease in other comprehensive loss[277]. Income and Expense Analysis - Net interest income for the six months ended June 30, 2023, decreased by $8.7 million or 24.8% compared to the same period in 2022, primarily due to rising costs of interest-bearing liabilities[201]. - Non-interest income increased by $728 thousand for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to mark-to-market adjustments and increased service charges[203]. - Non-interest expense decreased by $866 thousand or 5.3% for the six months ended June 30, 2023, mainly due to reductions in salaries, professional fees, and occupancy expenses[204]. - Interest expense rose by $17.3 million to $21.4 million for the six months ended June 30, 2023, primarily due to an increase in rates[225]. Credit Quality and Loan Portfolio - The allowance for loan credit losses as of June 30, 2023, was $20.6 million, compared to $20.0 million as of June 30, 2022[197]. - The Company recorded a $1.6 million recovery of provision for credit losses for the six months ended June 30, 2023, compared to no provision for the same period in 2022[202]. - The Company recorded net recoveries of $1 thousand during the three months ended June 30, 2023, compared to no charge-offs or recoveries during the same period in 2022[298]. - The loan pipeline heading into Q3 2023 is robust, with increased lending opportunities and fewer competitors[284]. Interest Rate and Yield Analysis - The net interest margin was 2.33% for the six months ended June 30, 2023, down from 3.25% for the same period in 2022, primarily due to rising costs of interest-bearing liabilities[214]. - The yield on the loan portfolio increased to 4.73% for the six months ended June 30, 2023, compared to 4.40% for the same period in 2022[215]. - The yield on investment securities increased to 2.04% for the six months ended June 30, 2023, compared to 1.70% for the same period in 2022[216]. - The cost of interest-bearing liabilities was 2.99% for the second quarter of 2023, compared to 0.60% for the same quarter of the prior year[251]. Regulatory and Risk Management - The Company maintains a focus on risk management and is aware of various economic and regulatory risks that could impact future performance[188]. - The total risk-based capital ratio increased to 16.1% as of June 30, 2023, from 15.1% as of June 30, 2022[197]. - The Company's asset quality remained strong with no nonperforming assets as of June 30, 2023[290]. Deposits and Liquidity - Total deposits decreased by $21.4 million or 1.0% to $2.05 billion as of June 30, 2023, compared to $2.07 billion at December 31, 2022[308]. - Non-interest bearing demand deposits decreased by $42.8 million or 9.0% to $433.9 million as of June 30, 2023, representing 21.2% of total deposits[308]. - Interest-bearing deposits increased by $21.3 million or 1.3% to $1.61 billion as of June 30, 2023, representing 78.8% of total deposits[309]. - Total liquidity was $839.4 million at June 30, 2023, compared to $763.5 million at December 31, 2022, representing 120% of uninsured, non-collateralized deposits[324].