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John Marshall Bancorp(JMSB) - 2024 Q1 - Quarterly Results

Financial Performance - The Company reported net income of $4.2 million for Q1 2024, a decrease of $2.1 million from $6.3 million in Q1 2023[22]. - Net income for the quarter was $4,204,000, a decline of 33.3% compared to $6,304,000 in the same period last year[37]. - Earnings per share (diluted) decreased to $0.30 from $0.44, representing a decline of 31.8%[37]. - The return on average assets (annualized) decreased to 0.75% from 1.10% year-over-year, indicating a decline in profitability[37]. - Income before income taxes decreased by 32.7% to $5,414,000 from $8,039,000 year-over-year[43]. Asset and Loan Performance - The Company reported total assets of $2.25 billion as of March 31, 2024, compared to $2.35 billion a year earlier, reflecting a decrease in total loans by $34.0 million or 1.8% from December 31, 2023[7]. - Total assets decreased by 4.2% year-over-year to $2,251,837,000 as of March 31, 2024[40]. - Total loans, net of unearned income, decreased to $1,825,931 million from $1,859,967 million, a decline of 1.8%[45]. - Total loans as of March 31, 2024, amounted to $1,820,882 million, a decrease of 1.4% from $1,854,984 million as of December 31, 2023[47]. - Commercial real estate loans represented 51.5% of total loans, totaling $938,613 million as of March 31, 2024, compared to 52.1% and $966,936 million as of December 31, 2023[47]. Income and Expense Analysis - Net interest income decreased by $2.7 million or 18.8% year-over-year, primarily due to rising costs of interest-bearing liabilities outpacing yield increases on interest-earning assets[23]. - Net interest income after provision for credit losses was $12,520,000, down from $15,243,000 in the previous year, reflecting a decrease of 17.9%[37]. - Total interest expense surged by 68.9% to $15,175,000, up from $8,984,000 in the previous year[43]. - Non-interest expense rose by $154 thousand or 2.0% year-over-year, influenced by non-recurring expenses of $138 thousand related to a strategic opportunity that did not materialize[28]. - The efficiency ratio increased to 63.1% in Q1 2024 from 51.7% in Q1 2023, primarily due to higher non-interest expenses[30]. Dividend and Shareholder Equity - The Company declared an annual cash dividend of $0.25 per share, representing a 13.6% increase from the previous year and a 25% increase from 2022[4]. - Shareholders' equity increased by 6.2% year-over-year to $234,550,000, up from $220,823,000[40]. Deposits and Funding Sources - Total deposits fell by 9.0% year-over-year to $1,900,990,000, down from $2,088,642,000[40]. - Non-interest bearing demand deposits decreased to $404,669 million, representing 21.3% of total deposits, down from 21.6% in the previous quarter[47]. - Core customer funding sources accounted for 80.4% of total funding sources, totaling $1,589,816 million as of March 31, 2024[47]. Credit Quality and Allowance for Loan Losses - The allowance for loan credit losses was $18.7 million, or 1.02% of outstanding loans, down from 1.05% at the end of 2023[17]. - The allowance for loan credit losses to total loans ratio improved to 1.02% from 1.22% year-over-year[37]. - The allowance for loan credit losses decreased to $18,671 million as of March 31, 2024, from $19,543 million as of December 31, 2023[47]. Interest Margin and Rates - The net interest margin was stable at 2.11% for the first quarter of 2024, maintaining a range of 2.08% to 2.12% over the past four quarters[4]. - The annualized net interest margin for Q1 2024 was 2.11%, down from 2.57% in Q1 2023, largely due to increased costs of interest-bearing deposits[23]. - The yield on interest-earning assets was 4.83% in Q1 2024, up from 4.15% in Q1 2023, while the cost of interest-bearing liabilities rose to 3.81% from 2.25%[23]. Growth and Strategic Initiatives - The Company hired four experienced business development professionals in 2024 to support growth in loans, deposits, and non-interest income[4]. - The Company expects to accelerate SBA loan sale revenue and has a growing pipeline of borrowers evaluating swaps[27].