John Marshall Bancorp(US:JMSB)2023-11-08 14:00Financial Position - As of September 30, 2023, the Company reported total consolidated assets of $2.30 billion, total loans net of unearned income of $1.82 billion, total deposits of $1.98 billion, and total shareholders' equity of $220.6 million[192]. - Total assets as of September 30, 2023, were $2,298,202 thousand, slightly down from $2,305,540 thousand a year earlier[200]. - Shareholders' equity increased to $220,567 thousand as of September 30, 2023, compared to $202,212 thousand in 2022[200]. - The Company's total assets decreased by $50.0 million or 2.1% to $2.30 billion at September 30, 2023, compared to $2.35 billion at December 31, 2022[267]. - Total liabilities decreased by $57.8 million or 2.7% to $2.08 billion at September 30, 2023, primarily due to an $86.1 million decrease in deposits[268]. - Shareholders' equity increased by $7.8 million or 3.6% to $220.6 million at September 30, 2023, compared to $212.8 million at December 31, 2022[269]. - Book value per share was $15.61 as of September 30, 2023, compared to $15.09 as of December 31, 2022[269]. Income and Earnings - The company reported a net income of $656 thousand for the nine months ended September 30, 2023, a decrease of $22.9 million compared to the same period in 2022[200]. - Core net income (Non-GAAP) for the same period was $15.3 million, down $8.3 million from the previous year[200]. - The company incurred a non-recurring after-tax loss of $14.6 million due to the sale of lower-yielding investment securities and the surrender of BOLI contracts[200]. - Diluted earnings per share (GAAP) for the nine months ended September 30, 2023, was $0.05, compared to $1.67 in 2022[200]. - The return on average assets (annualized) (GAAP) was 0.04% for the nine months ended September 30, 2023, down from 1.40% in 2022[200]. - The return on average equity (annualized) (GAAP) was 0.40% for the same period, compared to 15.03% in 2022[200]. - The Company reported a net loss of $10.1 million for the three months ended September 30, 2023, a decrease of $18.2 million compared to the same period in 2022[233]. - Core net income (Non-GAAP) for the three months ended September 30, 2023, was $4.5 million, a decrease of $3.6 million compared to the same period in 2022[235]. - Reported diluted earnings per share (GAAP) was $(0.72) for the three months ended September 30, 2023, compared to $0.57 for the same period in 2022[235]. Interest Income and Expense - Net interest income for the three months ended September 30, 2023, was $11,979 thousand, a decrease from $17,692 thousand in the same period last year[200]. - The net interest margin for the nine months ended September 30, 2023, was 2.25%, down from 3.19% in 2022[200]. - For the nine months ended September 30, 2023, net interest income decreased by $14.4 million or 27.2% on a fully tax-equivalent basis compared to the same period in 2022[211]. - Interest income increased by $13.7 million or 22.6% to $74.4 million for the nine months ended September 30, 2023, driven by increases in rates and volume on interest-earning assets[219]. - Interest expense rose by $28.1 million to $35.7 million for the nine months ended September 30, 2023, compared to $7.6 million for the same period in 2022, mainly due to increased rates[223]. - The yield on loans for the nine months ended September 30, 2023, was 4.78%, up from 4.37% for the same period in 2022[213]. - The yield on investment securities for the nine months ended September 30, 2023, was 2.04%, compared to 1.80% for the same period in 2022[214]. - The yield on interest-bearing deposits due from banks increased to 5.23% for the nine months ended September 30, 2023, from 0.89% for the same period in 2022[215]. - The cost of interest-bearing liabilities increased to 2.89% for the nine months ended September 30, 2023, from 0.67% for the same period in 2022[212]. - The total tax-equivalent net interest income for the nine months ended September 30, 2023, was $38.651 million, down from $53.086 million for the same period in 2022[210]. - For the three months ended September 30, 2023, net interest income decreased by $5.7 million or 32.2% on a fully tax-equivalent basis compared to the same period in 2022[244]. - The net interest margin for the third quarter of 2023 was 2.08%, down from 3.10% in the same quarter of the prior year, primarily due to increased costs of interest-bearing liabilities[245]. - The yield on the loan portfolio increased to 4.87% for the three months ended September 30, 2023, compared to 4.31% for the same period in 2022, driven by higher rates on variable rate loans[246]. - Interest income increased by $5.0 million or 23.7% to $26.3 million for the three months ended September 30, 2023, compared to $21.3 million in the same period of 2022[252]. - Interest expense increased by $10.8 million to $14.3 million for the three months ended September 30, 2023, compared to $3.5 million for the same period in 2022, primarily due to an increase in rates[257]. Loan and Deposit Activity - Average loans increased by approximately $127.9 million between September 30, 2022, and September 30, 2023, primarily due to origination volume in commercial and residential real estate portfolios[220]. - The total net loans as of September 30, 2023, were $1.80 billion, compared to $1.77 billion as of December 31, 2022[278]. - Gross loans increased by $30.6 million or 1.7% to $1.82 billion as of September 30, 2023, compared to $1.79 billion as of December 31, 2022[276]. - The composition of loans held for investment as of September 30, 2023, includes commercial real estate loans at $1.13 billion (62.41%), construction and land development loans at $179.6 million (9.89%), and residential loans at $464.5 million (25.58%)[278]. - The allowance for loan credit losses was $20.0 million or 1.10% of outstanding loans as of September 30, 2023, down from $20.2 million or 1.13% at December 31, 2022[288]. - The company recorded no charge-offs or recoveries during the three months ended September 30, 2023, and net recoveries of $2 thousand during the nine months ended September 30, 2023[288]. - The company maintained strong asset quality with no nonperforming assets as of September 30, 2023, and December 31, 2022[282]. - The loan pipeline heading into Q4 2023 is robust, with increased lending opportunities and fewer competitors in the market[276]. - The company did not make any loan modifications for borrowers experiencing financial difficulty during the three or nine months ended September 30, 2023[284]. - Total deposits decreased by $86.1 million or 4.2% to $1.98 billion as of September 30, 2023, compared to $2.07 billion at December 31, 2022[298]. - Non-interest bearing demand deposits decreased by $38.8 million or 8.1% to $437.9 million as of September 30, 2023[298]. - Interest-bearing deposits decreased by $47.3 million or 3.0% to $1.54 billion as of September 30, 2023[299]. - Core deposits totaled $1.68 billion or 84.8% of total deposits as of September 30, 2023, compared to $1.69 billion or 81.9% at December 31, 2022[300]. Risk Management and Compliance - The Company maintains an allowance for loan credit losses to absorb lifetime losses on existing loans, which is established by recording a provision for credit losses against earnings[191]. - The Company emphasizes the importance of maintaining existing deposit relationships and attracting new ones to support its funding needs[187]. - The Company is focused on maintaining an effective risk management framework and compliance with regulatory requirements to mitigate potential risks[193]. - The Company faces risks including economic conditions in the Washington, D.C. area, asset quality deterioration, and competition from other financial institutions and fintech companies[187]. - The Company’s financial condition may be affected by changes in consumer spending, inflation, and interest rates, which could impact margins and the fair value of financial instruments[187]. - The Company’s operations are significantly influenced by the economic environment, including factors such as unemployment rates and real estate values in its market area[193]. - Forward-looking statements indicate potential growth opportunities, but actual results may differ due to known and unknown risks[186]. Non-Interest Income and Expenses - Non-interest income decreased by $16.5 million during the nine months ended September 30, 2023, primarily due to a $17.1 million loss from Restructuring[227]. - Core non-interest income (Non-GAAP) increased by $577 thousand, excluding the loss from the bond sale portion of the Restructuring[227]. - Total non-interest expense decreased by $1.2 million or 4.8% during the nine months ended September 30, 2023, primarily due to reductions in salaries and employee benefits[230]. - Non-interest income decreased by $17.3 million during Q3 2023, primarily due to a restructuring loss of $17.1 million[262]. - Total non-interest expense decreased by $298 thousand or 3.7% during Q3 2023 compared to Q3 2022, primarily due to a decrease in professional fees and occupancy expenses[264]. - The Company experienced a decrease in occupancy expense due to renegotiation of certain leases, contributing to the overall reduction in non-interest expenses[231]. Liquidity and Capital Management - Total liquidity was $742.5 million at September 30, 2023, down from $763.5 million at December 31, 2022[314]. - The total amount of uninsured deposits was estimated at $864.8 million at September 30, 2023, compared to $963.9 million at December 31, 2022[305]. - The Company has a total FHLB available borrowing capacity of $444.7 million as of September 30, 2023[312]. - The Company obtained a $54.0 million BTFP advance on May 15, 2023, with a fixed interest rate of 4.80%[313]. - The stock repurchase program allows the Company to repurchase up to 700,000 shares, or 5.0% of outstanding shares, expiring on August 31, 2024[309].