John Marshall Bancorp, Inc. · NASDAQ:JMSB
John Marshall Bancorp — Raymond James U.S. Bank Conference 2023
34 slides from John Marshall Bancorp's conference presentation, Sep 7, 2023
Slide 1: Raymond James U.S. Bank Conference
September 7, 2023 Raymond James U.S. Bank Conference 1
Slide 2: Forward Looking Statements
Forward Looking Statements 2 In addition to historical information, this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on certain assumptions and describe future plans, strategies and expectations of the Com
Slide 3: Franchise Overview, Financial Highlights, Credit & Asset Quality, Funding & Liquidity, Appendices
3 Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
Slide 4: Company Overview
Company Overview 4 John Marshall Bank is a growth-oriented commercial bank headquartered in Reston, Virginia Established in 2006, the Company has grown organically to $2.4 billion in assets Seasoned executive team with decades of in-market banking experience Strategy emphasizes growth in loa
Slide 5: Investment Attributes
5 Investment Attributes Rewarding Our Shareholders Attractive Market Credit Discipline Prime for Future Growth Experienced Management
Slide 6: John Marshall Franchise
6 John Marshall Franchise Bank commenced operations in April 2006 $22 million recapitalization completed in 2008 Holding company formed March 1, 2017 Chris Bergstrom named President and CEO April 30, 2018 Building value by delivering tailored banking services and exceptional client experie
Slide 7: Leveraging Technology: Selective FinTech partnerships
7 Selective FinTech partnerships provide operating leverage and fuel additional growth Customer Experience Operating Efficiencies Risk Mitigation FinTech Partnership Benefits Various FinTech Partnerships Leveraging Technology
Slide 8: Executive Leadership
8 Executive Leadership Chris Bergstrom President & CEO Chris Bergstrom has over 41 years of experience in the banking industry. Before joining John Marshall Bank, Mr. Bergstrom served in a variety of executive positions during 19 years with Cardinal Financial Corporation and Cardinal Bank, most rece
Slide 9: Executive Leadership
9 Executive Leadership Jason McDonough EVP, Chief Lending Officer Jason McDonough has over 17 years of banking experience, including over 5 years at John Marshall Bank and 11 years with Cardinal Bank. He has a background in both retail and commercial banking including 10 years as a Commercial Lender
Slide 10: Banking Center Footprint
10 Banking Center Footprint • Eight regional banking centers serve as business development hubs. • Approximately 97% of the Bank’s deposit dollars are collected electronically. District of Columbia: 1625 K Street, NW
Slide 11: Attractive Metro Markets
11 Attractive Metro Markets Median Household Income $ (2023) Projected Population Growth % (2023-2028) Educational Attainment % (>=Bachelors Degree) Unemployment Rate % (May 2023, NSA) 128,024 117,952 92,662 86,611 83,193 81,625 4.99 2.72 0.77 0.54 (0.45) (0.45) 53.4 51.8 43.6 40.6 38.4 37.1 2.6 3.3
Slide 12: Market Growth + Consolidation = Unique Opportunity
12 Market Growth + Consolidation = Unique Opportunity Data as of: 6/30/2013 Data as of: 6/30/2022
Slide 13: Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
13 Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
Slide 14: Second Quarter 2023 Highlights
14 Second Quarter 2023 Highlights Pristine Asset Quality o 15th consecutive quarter with no loans more than 30 days past due, non-accruing loans, or OREO. o As of June 30, 2023, there were no loans greater than 10 days past due. o There were no charge-offs during the quarter. Significant Liquidi
Slide 15: Historical Growth
$1,163 $1,326 $1,563 $1,666 $1,785 $1,690 $1,765 2018 2019 2020 2021 2022 1H22 1H23 15 Historical Growth Total Deposits ($MM) $1,138 $1,309 $1,640 $1,882 $2,068 $2,044 $2,046 2018 2019 2020 2021 2022 1H22 1H23 Total Assets ($MM) $1,395 $1,582 $1,885 $2,149 $2,348 $2,316 $2,364 2018 2019 2020 2021 20
Slide 16: Loan Portfolio Composition
16 Loan Portfolio Composition CRE - Owner Occupied 20.4% CRE - Non-owner Occupied 37.0% Multifamily 4.9% Commercial 2.3% Residential Real Estate 25.2% Commercial Construction & Development 5.9% Residential Construction & Development 4.3% $ Change vs (Dollars in thousands) Q2 2023 Q1 2023 Q2 2022 CRE
Slide 17: Strength in CRE Loan Portfolio
17 Strength in CRE Loan Portfolio CRE - Owner Occupied Asset Class Weighted Average Loan-to-Value(1) Weighted Average Debt Service Coverage Ratio(2) Number of Total Loans Principal Balance(3) Office 61.0% 3.9x 129 $ 83,018 Retail 60.9% 2.7x 43 59,903 Warehouse 59.6% 2.3x 28 35,606 Church 34.0% 3.2x
Slide 18: Bond Portfolio – Post Restructuring
18 Bond Portfolio – Post Restructuring Conservative, High Quality, and Liquid Securities Portfolio • 96.3% of the amortized cost of the debt securities portfolio has an explicit or implicit guaranteed from the federal government • All of the Company’s municipal bonds have a credit rating of AA or be
Slide 19: Performance Measures
19 Performance Measures ROAA (%) ROAE (%) Overhead / Average Assets (%) Book Value per Share excluding AOCI1 ($) 0.95% 1.08% 1.06% 1.25% 1.40% 1.41% 0.93% 2018 2019 2020 2021 2022 1H22 1H23 8.98% 10.41%10.49% 12.90% 15.18% 15.02% 9.85% 2018 2019 2020 2021 2022 1H22 1H23 $11.08 $12.28 $13.40 $15.20 $
Slide 20: Non-Interest Income Initiatives
20 Non-Interest Income Initiatives 1ST half figures reflect amounts for the first six months of each year. Annuity Revenue Streams Bankers Insurance: K-1 income, commissions and bonus payments • Annuity model with next year’s commissions building on the current year’s Purchase Card / Credit Card
Slide 21: Superior Long-term Returns
21 Superior Long-term Returns -60 -40 -20 0 20 40 60 80 100 120 1/4/19 7/4/19 1/4/20 7/4/20 1/4/21 7/4/21 1/4/22 7/4/22 1/4/23 7/4/23 1/1/2019 - 8/1/2023 Price Return (%) JMSB Price Appreciation S&P U.S. Small Cap Banks Index Price Appreciation
Slide 22: Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
22 Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
Slide 23: Decreasing Concentration
407% 379% 411% 413% 403% 384% 367% 365% 340% 335% 338% 319% 316% 148% 120% 126% 126% 130% 121% 111% 109% 94% 84% 73% 62% 62% 23 Decreasing Concentration • $1.765B in gross loans held for investment as of 6/30/2023 • 85.0% of credit exposure is within the DC MSA as of 6/30/2023 • No equity capital is
Slide 24: Disciplined Credit Culture
24 Disciplined Credit Culture Asset Quality Capital Allowance for Credit Losses • Historically, the Bank has exhibited excellent loan quality with low levels of classified loans • No NPAs, NPLs or loans 30+ day PD for the fifteenth consecutive quarter • “Well-Capitalized” under Basel III • Stress te
Slide 25: Credit Quality
25 Credit Quality 1.6x 7.9x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x Nonperforming Assets¹ / Assets (%) Net Charge-Offs / Loans (%) Reserves / Nonperforming Loans (%) Texas Ratio (%)3 NM2 0.32% 0.01% 0.09%0.03% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.50% 1.00% 0.08% 0.33% 0.07% 0.03% 0.
Slide 26: Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
26 Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
Slide 27: Deposit Composition
27 Deposit Composition Data as of 6/30/2023 • Cost of deposits was 2.06% for the six months ended June 30, 2023 • Average length of relationship is approximately 6 years Non-Interest Bearing Demand 21.2% NOW 15.2% Money Market 16.7% Savings 3.4% Certificates of Deposit 23.6% QwickRate Certificates o
Slide 28: Sources of Liquidity
28 Sources of Liquidity Dollars in millions As of June 30, 2023 Total Available Amount Used Net Availability Internal Sources: Cash $ 129.6 $ - $ 129.6 Unencumbered Securities, at Fair Value 233.7 - 233.7 External Sources: Federal Home Loan Bank 451.1 - 451.1 Federal Reserve Bank - BIC 25.0 - 25.0 T
Slide 29: Strong Capital Ratios
29 Strong Capital Ratios 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Leverage ratio Common equity tier 1 ratio Tier 1 risk-based capital Total risk-based capital ratio Ratios (%) Bank Regulatory Capital Ratios (As Reported) Well-Capitalized Threshold June 30, 2022 December 31, 2022 June 30, 2023 0.
Slide 30: Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
30 Franchise Overview Financial Highlights Credit & Asset Quality Funding & Liquidity Appendices
Slide 31: Historical Balance Sheet
31 Historical Balance Sheet ($ in thousands) 2018 2019 2020 2021 2022 Q2 2023 ASSETS: Cash and Due from Banks $ 7,853 $ 7,471 $ 8,228 $ 2,920 $ 6,583 $ 13,938 Fed Funds Sold 126 - - - - - Deposits at Financial Institutions 93,716 87,019 130,229 102,879 55,016 115,613 Cash and Cash Equivalents $ 101,
Slide 32: Historical Income Statement
32 Historical Income Statement Six Months Ended ($ in thousands, except per share data) 2018 2019 2020 2021 2022 June 30, 2023 Interest and dividend income 57,890 $ 68,990 $ 72,446 $ 74,119 $ 84,066 $ 47,908 $ Interest expense 14,190 20,322 15,607 8,211 13,645 21,430 Net interest income $ 48,668 43,
Slide 33: Reconciliation of Non-GAAP Disclosures
33 Reconciliation of Non-GAAP Disclosures (1) Includes tax benefit calculated using the federal statutory tax rate of 21%. (2) The total risk-based capital ratio is calculated by dividing total risk-based capital by risk weighted assets. (3) The tier 1 capital ratio is calculated by dividing tier 1
Slide 34: Reconciliation of Non-GAAP Disclosures
34 Reconciliation of Non-GAAP Disclosures John Marshall Bancorp, Inc. Reconciliation of Certain Non-GAAP Financial Measures (unaudited) (Dollar amounts in thousands, except share and per share data) As of December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 June 30, 2022 December
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