John Marshall Bank: John Marshall Bancorp, Inc. Reports Margin Expansion Drives 20% Increase in Net Interest Income, Balance Sheet Remains Source of Strength

John Marshall Bancorp, Inc. JMSB (the "Company"), parent company of John Marshall Bank (the "Bank"), reported net income of $4.8 million for the quarter ended March 31, 2025 compared to $4.2 million for the quarter ended March 31, 2024, an increase of $606 thousand or 14.4%. Diluted earnings per share were $0.34 for the quarter ended March 31, 2025 compared to $0.30 for the quarter ended March 31, 2024, an increase of 13.3%. For the quarter ended December 31, 2024, reported net income was $4.8 million or $0.33 per diluted share. Selected Highlights Earnings Accelerating - Pre-tax, pre-provision earnings (Non-GAAP) for the three months ended March 31, 2025 was $6.4 million, representing an increase of $1.7 million or 37.0% when compared to the three months ended March 31, 2024. Refer to "Explanation of Non-GAAP Measures" and the "Reconciliation of Certain Non-GAAP Financial Measures" table for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP. Significant Increase in Net Interest Income and Margin - For the three months ended March 31, 2025, the Company reported net interest income of $14.1 million, a $2.4 million or 20.0% increase over the $11.7 million reported for the three months ended March 31, 2024. The increase in net interest income was driven by growth in net interest margin. Net interest margin increased 47 basis points from 2.11% for the three months ended March 31, 2024 to 2.58% for the three months ended March 31, 2025. Focused on Core Funding Growth - The Company remains focused on driving value through core funding growth. Non-interest bearing demand deposits grew 8.2% from March 31, 2024 to March 31, 2025. Non-interest bearing demand deposits increased from 21.3% of total deposits as of March 31, 2024 to 22.8% as of March 31, 2025. The Company decreased its wholesale funding sources by 8.8% from March 31, 2024 to March 31, 2025. Excellent Asset Quality - As of March 31, 2025 the Company had no loans greater than 30 days past due, no non-accrual loans and no other real estate owned assets. The Company recorded no net charge-offs during the first quarter of 2025. The Company had zero loans classified as substandard as of March 31, 2025. Robust Capitalization - Each of the Bank's regulatory capital ratios remained well in excess of the regulatory well-capitalized thresholds as of March 31, 2025. The Company's capitalization positions it well for organic growth, potential acquisitions, share repurchases or cash dividends. Growing Book Value per Share - Book value per share increased from $16.51 as of March 31, 2024 to $17.72 as of March 31, 2025, a 7.3% increase. When factoring in the $0.25 cash dividend per share paid in July 2024, the book value per share return was 8.8%. 20% Annual Cash Dividend Increase - On April 22, 2025, the Company declared an annual cash dividend of $0.30 per outstanding share of common stock. The dividend will be payable on July 7, 2025 to shareholders of record as of the close of business on June 27, 2025. This per share amount equates to a 20.0% increase over the 2024 annual cash dividend and marks the third consecutive increase in the annual cash dividend per share. Chris Bergstrom, President and Chief Executive Officer, commented, "Despite a quarter marked by economic volatility, John Marshall Bank continued to expand margin, increase earnings and book loan commitments that are prudently underwritten. In the first quarter of 2025, the Company produced $96.5 million in loan commitments; our strongest first quarter since 2022. In March alone, we booked over $46 million in commitments. The overlay of tariffs and government efficiency initiatives have restrained borrowing by business owners and individuals. We believe that our commitment activity will translate into loan growth once greater economic clarity is realized. The Washington, DC metropolitan statistical area, is one of the most vibrant and resilient metro areas in the country and the percentage of Federal employees that are not in defense or security positions, by our estimates, represents about 4% of the workforce. In addition to solid demographic underpinnings, banking consolidation continues in the Washington, DC area dislocating both customers and experienced bankers. Our balance sheet, represented by our strong capitalization and excellent asset quality, is a source of strength that we intend to use to grow our customer base, attract qualified bankers, increase core funding, grow loans sensibly and continue to drive earnings growth." Balance Sheet, Liquidity and Credit Quality Total assets were $2.27 billion at March 31, 2025, $2.23 billion at December 31, 2024, and $2.25 billion at March 31, 2024. Total assets have increased $37.5 million or 1.7% since December 31, 2024 and increased $20.6 million or 0.9% since March 31, 2024. Total loans, net of unearned income, increased $44.5 million or 2.4% to $1.87 billion at March 31, 2025, compared to $1.83 billion at March 31, 2024 and decreased $1.7 million during the quarter ended March 31, 2025 or 0.1% from December 31, 2024. The increase in loans from March 31, 2024, was primarily attributable to growth in the investor real estate loan and the construction & development loan portfolios, partially offset by a decrease in the commercial owner-occupied real estate loan portfolio. Refer to the Loan, Deposit and Borrowing table for further information. The carrying value of the Company's fixed income securities portfolio was $215.6 million at March 31, 2025, $222.3 million at December 31, 2024 and $253.4 million at March 31, 2024. The decrease in carrying value of the Company's fixed income securities portfolio since March 31, 2024 was primarily attributable to maturities and the amortization of the portfolio. As of March 31, 2025, 95.3% of our bond portfolio carried the implied guarantee of the United States government or one of its agencies. At March 31, 2025, 63% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At March 31, 2025, the fixed income portfolio had an estimated weighted average life of 4.2 years. The available-for-sale portfolio comprised approximately 60% of the fixed income securities portfolio and had a weighted average life of 3.1 years at March 31, 2025. The held-to-maturity portfolio comprised approximately 40% of the fixed income securities portfolio and had a weighted average life of 5.8 years at March 31, 2025. The Company's balance sheet remains highly liquid. The Company's liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $786.9 million as of March 31, 2025 compared to $727.3 million as of December 31, 2024 and represented 34.5% and 32.5% of total assets, respectively. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at March 31, 2025. Total deposits were $1.92 billion at March 31, 2025, $1.89 billion at December 31, 2024 and $1.90 billion at March 31, 2024. During the quarter, total deposits increased $29.8 million or 1.6% when compared to December 31, 2024. Deposits increased $21.2 million or 1.1% when compared to March 31, 2024. The Bank reduced costlier time deposits by $64.7 million since March 31, 2024. As further detailed in the tables included in this release, core funding sources have increased $35.2 million and wholesale funding sources have decreased $34.2 million since March 31, 2024. As of March 31, 2025, the Company had $660.8 million of deposits that were not insured or not collateralized compared to $627.1 million at March 31, 2024. On September 3, 2024, the Company paid off its $77.0 million Bank Term Funding Program ("BTFP") advance and concurrently secured three Federal Home Loan Bank ("FHLB") advances totaling $56.0 million. The FHLB advances have a weighted average fixed interest rate of 4.01% compared to 4.76% for the retired BTFP advance. Total borrowings as of March 31, 2025 consisted of subordinated debt totaling $24.8 million and the FHLB advances. Shareholders' equity increased $18.4 million or 7.8% to $253.0 million at March 31, 2025 compared to $234.6 million at March 31, 2024. Book value per share was $17.72 as of March 31, 2025 compared to $16.51 as of March 31, 2024, an increase of 7.3%. The year-over-year change in book value per share was primarily due to the Company's earnings over the previous twelve months and a decrease in accumulated other comprehensive loss. This increase was partially offset by increased cash dividends paid and increased share count from shareholder option exercises and restricted share award issuances. The decrease in accumulated other comprehensive loss was attributable to decreases in unrealized losses on our available-for-sale investment portfolio due to market value increases. The Bank's capital ratios remained well above regulatory thresholds for well-capitalized banks. As of March 31, 2025, the Bank's total risk-based capital ratio was 16.5%, compared to 16.1% at March 31, 2024 and 16.2% at December 31, 2024. As outlined below, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at March 31, 2025 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized (Non-GAAP). Refer to "Explanation of Non-GAAP Measures" and the "Reconciliation of Certain Non-GAAP Financial Measures" table for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP. Bank Regulatory Capital Ratios (As Reported) Well-Capitalized Threshold March 31, 2025 December 31, 2024 March 31, 2024 Total risk-based capital ratio 10.0 % 16.5 % 16.2 % 16.1 % Tier 1 risk-based capital ratio 8.0 % 15.4 % 15.2 % 15.1 % Common equity tier 1 ratio 6.5 % 15.4 % 15.2 % 15.1