John Marshall Bancorp(JMSB) - 2022 Q3 - Quarterly Report

Financial Position - As of September 30, 2022, the Company had total consolidated assets of $2.31 billion, total loans net of unearned income of $1.73 billion, total deposits of $2.06 billion, and total shareholders' equity of $202.2 million[155]. - Total assets were $2.31 billion at September 30, 2022, up from $2.15 billion at December 31, 2021, reflecting a growth of $156.2 million or 7.3%[237]. - Total liabilities increased by $162.5 million or 8.4% to $2.10 billion at September 30, 2022, primarily due to a rise in total deposits[238]. - Total shareholders' equity decreased by $6.3 million or 3.0% to $202.2 million at September 30, 2022, mainly due to an increase in net unrealized losses on the investment portfolio[240]. - The Company had estimated total uninsured deposits of $1.15 billion as of September 30, 2022, up from $1.01 billion as of December 31, 2021[276]. - Liquid assets totaled $380.7 million as of September 30, 2022, representing 16.5% of total assets, compared to $299.3 million or 16.8% of total assets at December 31, 2021[288]. Income and Earnings - Net income for the nine months ended September 30, 2022 increased by $5.7 million or 31.7% to $23.6 million compared to $17.9 million for the same period in 2021[166]. - Diluted earnings per share increased by $0.38 or 29.5% to $1.67 for the nine months ended September 30, 2022, compared to $1.29 for the same period in 2021[166]. - Net income increased by $1.2 million or 19.0% to $8.0 million for the three months ended September 30, 2022, compared to $6.8 million for the same period in 2021[205]. - Non-interest income increased by $125 thousand or 38.5% during the third quarter of 2022 compared to the third quarter of 2021, primarily due to a $153 thousand increase in bank owned life insurance income[208]. Interest Income and Expenses - Net interest income for the nine months ended September 30, 2022 increased by $4.0 million or 8.1% compared to the same period in 2021, driven primarily by growth in the loan and investment portfolios[167]. - Interest income rose by $5.1 million or 9.2% to $60.7 million on a fully tax-equivalent basis for the nine months ended September 30, 2022, driven by an increase in volume of interest-earning assets[188]. - Interest expense increased by $1.1 million or 17.2% to $7.6 million for the nine months ended September 30, 2022, primarily due to higher rates and volumes on interest-bearing deposits[191]. - The overall cost of interest-bearing deposits rose to 0.55% for the nine months ended September 30, 2022, compared to 0.53% for the same period in 2021[192]. - Interest expense increased by $1.6 million to $3.5 million for the three months ended September 30, 2022, primarily due to an increase in rates[229]. Loan Performance - The allowance for loan losses was $20.0 million as of September 30, 2022, representing 1.16% of total gross loans net of unearned income[195]. - The Company did not record a provision for loan losses for the nine months ended September 30, 2022, compared to a $2.8 million provision for the same period in 2021[168]. - The Company did not record a provision for loan losses for Q3 2022, compared to $325 thousand for Q3 2021, reflecting decreased uncertainty regarding the impact of the COVID-19 pandemic on the loan portfolio[230]. - The Company recorded no net charge-offs during the nine months ended September 30, 2022, compared to $91 thousand for the same period in 2021[262]. - Gross loans increased by $58.6 million or 3.5% to $1.73 billion as of September 30, 2022, with a significant increase of $129.0 million or 8.1% excluding PPP loans[248]. Risk Factors - The Company faces risks including economic conditions, competition, and changes in consumer behavior that could impact financial performance[150]. - The Company is concentrated in the Washington, D.C. metropolitan area, making it sensitive to local economic and political changes[150]. - The Company’s financial condition may be affected by inflation and changes in interest rates, which could reduce margins[150]. - The Company’s ability to capitalize on growth opportunities is subject to various risks, including regulatory changes and market competition[150]. Capital and Liquidity - The total risk-based capital ratio increased to 15.4% as of September 30, 2022, compared to 15.2% as of September 30, 2021[1]. - The Company maintains a strong liquidity position, with management conducting quarterly liquidity stress testing[290]. - The Company has a total FHLB available borrowing capacity of $374.6 million as of September 30, 2022[289]. - The Company plans to adopt the CECL model effective January 1, 2023, which is expected to increase the allowance for credit losses[281]. Deposits - Total deposits increased by $181.8 million or 9.7% to $2.06 billion as of September 30, 2022, compared to $1.88 billion as of December 31, 2021[270]. - Non-interest bearing demand deposits rose by $46.4 million or 9.5% to $535.2 million as of September 30, 2022, accounting for 25.9% of total deposits[270]. - Core deposits totaled $1.76 billion or 85.2% of total deposits as of September 30, 2022, compared to $1.64 billion or 86.3% of total deposits as of December 31, 2021[272].