10% Annualized Loan Growth Drives 24% Annualized Earnings per Share Growth, Net Interest Margin and Loan Commitments Experience Significant Increases

John Marshall Bancorp, Inc. (NASDAQ:JMSB) (the "Company"), parent company of John Marshall Bank (the "Bank"), reported net income of $5.1 million for the quarter ended June 30, 2025 compared to $3.9 million for the quarter ended June 30, 2024, an increase of $1.2 million or 30.7%. Diluted earnings per common share were $0.36 for the quarter ended June 30, 2025 compared to $0.27 for the quarter ended June 30, 2024, an increase of 33.3%. For the quarter ended March 31, 2025, reported net income was $4.8 million or $0.34 per diluted common share.

Selected Highlights

• Earnings Accelerating – Pre-tax, pre-provision earnings (Non-GAAP) of $7.1 million for the three months ended June 30, 2025 represent a 12.1% increase over the $6.4 million for the three months ended March 31, 2025 and a 50.7% increase as compared to $4.7 million for the three months ended June 30, 2024. Refer to "Explanation of Non-GAAP Financial Measures," the "Reconciliation of Certain Non-GAAP Financial Measures" table and the "Average Balance Sheets, Interest and Rates" tables for further details about financial measures used in this release that were determined by methods other than in accordance with GAAP.
• Continued Margin Expansion – The tax-equivalent net interest margin (Non-GAAP) expanded for the fifth consecutive quarter and grew by 12 basis points during the most recent quarter to 2.70% compared to 2.58% for the first quarter of 2025 and 2.19% for the second quarter of 2024.
• Significant Increase in Net Interest Income – For the three months ended June 30, 2025, the Company reported net interest income of $14.9 million, representing a $0.8 million or 5.9% increase over the previous quarter and a $2.8 million or 23.5% increase over the prior year quarter.
• Strong Loan Demand – The Company's loan pipeline remained strong with $135.5 million in new commitments recorded during the three months ended June 30, 2025, a 40.5% improvement on the $96.5 million of new commitments recorded during the three months ended March 31, 2025. The most recent quarter's new commitment production represents the highest quarterly level since the fourth quarter of 2022. New commitments represent loans closed, but not necessarily fully funded as of the end of the respective reporting period.
• Excellent Asset Quality – As of June 30, 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 second quarter of 2025 and there were no loans classified as substandard as of June 30, 2025.
• Robust Capitalization – Each of the Bank's regulatory capital ratios remained well in excess of the regulatory well-capitalized thresholds as of June 30, 2025. During the quarter ended June 30, 2025, the Company repurchased 76,804 shares of its common stock at an average price of $17.12. The aggregate repurchase activity was accretive to the Company's book value per share.
• Growing Book Value per Share – Book value per share increased from $16.54 as of June 30, 2024 to $17.83 as of June 30, 2025, a 7.8% increase. The June 30, 2025 book value per share reflects our $0.30 per share cash dividend declared on April 22, 2025 and paid on July 7, 2025.

Chris Bergstrom, President and Chief Executive Officer, commented, "The previously reported growth in commitments translated into meaningful loan balance growth. During the second quarter of 2025, the Company increased loans by $46.4 million or 10% annualized. We believe the $135.5 million in new commitments booked during the quarter, a more than 40% increase over first quarter commitments, indicates additional potential loan and net interest income growth. Primarily through loan growth and a 12 basis point sequential quarter improvement in our net interest margin, we were able to increase pre-tax, pre-provision earnings over 50% when compared to the second quarter of 2024. While our underwriting remains unchanged, our momentum is building. We have the asset quality, capital and liquidity to support increased growth and returns."

Balance Sheet, Liquidity and Credit Quality

Total assets were $2.27 billion at June 30, 2025, $2.23 billion at December 31, 2024, and $2.27 billion at June 30, 2024. Total assets have increased $33.0 million or 1.5% since December 31, 2024 and decreased $1.8 million or 0.1% since June 30, 2024.

Total loans, net of unearned income, increased $46.4 million or 2.5% to $1.92 billion at June 30, 2025, compared to $1.87 billion at March 31, 2025 and increased $89.7 million or 4.9% from June 30, 2024. The increase in loans from March 31, 2025, was primarily attributable to growth in investor real estate loans, residential mortgage loans and construction & development loans. All other portfolios remained relatively unchanged during the most recent quarter. Refer to the Loan, Deposit and Borrowing Detail table for further information.

The carrying value of the Company's fixed income securities portfolio was $215.8 million at June 30, 2025, $215.6 million at March 31, 2025 and $241.6 million at June 30, 2024. The decrease in carrying value of the Company's fixed income securities portfolio since June 30, 2024 was primarily attributable to maturities and the amortization of the portfolio. As of June 30, 2025, 95.3% of our bond portfolio carried the implied guarantee of the United States government or one of its agencies. At June 30, 2025, 65.1% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At June 30, 2025, the fixed income portfolio had an estimated weighted average life of 4.1 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 June 30, 2025. The held-to-maturity portfolio comprised approximately 40% of the fixed income securities portfolio and had a weighted average life of 5.6 years at June 30, 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 $755.6 million as of June 30, 2025 compared to $786.9 million as of March 31, 2025 and represented 33.3% and 34.5% of total assets, respectively. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $93.5 million at June 30, 2025.

Total deposits were $1.90 billion at June 30, 2025, $1.89 billion at December 31, 2024 and $1.91 billion at June 30, 2024. During the most recent quarter, total deposits decreased $25.3 million or 1.3% when compared to March 31, 2025. Deposits decreased $15.9 million or 0.8% when compared to June 30, 2024. The Bank reduced costlier certificates of deposits by $27.8 million since June 30, 2024, which was partially offset by an increase in interest-bearing demand deposits, which grew $13.3 million over the same period. As of June 30, 2025, the Company had $656.0 million of deposits that were not insured or not collateralized compared to $677.0 million at June 30, 2024.

Federal Home Loan Bank ("FHLB") advances remained constant totaling $56.0 million as of June 30, 2025. The three FHLB advances have a weighted average fixed interest rate of 3.99%. In addition to outstanding FHLB advances, total borrowings as of June 30, 2025 consisted of subordinated debt totaling $24.8 million and federal funds purchased of $16.5 million.

Shareholders' equity increased $18.4 million or 7.8% to $253.7 million at June 30, 2025 compared to $235.3 million at June 30, 2024. Book value per share was $17.83 as of June 30, 2025 compared to $16.54 as of June 30, 2024, an increase of 7.8%. 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 offset by Company's share repurchases. 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 June 30, 2025, the Bank's total risk-based capital ratio was 16.3%, compared to 16.4% at June 30, 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 June 30, 2025 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized (Non-GAAP).

The Company recorded no charge-offs during the six months ended June 30, 2025. As of June 30, 2025, the Company had no loans greater than 30 days past due, no non-accrual loans and no other real estate owned assets.

At June 30, 2025, the allowance for loan credit losses was $19.3 million or 1.01% of outstanding loans, net of unearned income, compared to $18.8 million or 1.01% of outstanding loans, net of unearned income, at March 31, 2025. An increase in the allowance for loan credit losses during the most recent quarter is directly attributable to the growth in the loan portfolio.

At June 30, 2025, the allowance for credit losses on unfunded loan commitments was $1.2 million compared to $1.1 million at March 31, 2025.

The Company did not have an allowance for credit losses on held-to-maturity securities as of June 30, 2025 or March 31, 2025. As of June 30, 2025, 93.3% of our held-to-maturity portfolio carried the implied guarantee of the United States Government or one of its agencies.

The Company's owner occupied and non-owner occupied CRE portfolios continue to be of sound credit quality. The following table demonstrates their strong debt-service-coverage and loan-to-value ratios as of June 30, 2025.

The following charts provide geographic detail and stated maturity summaries for the Company's non-owner occupied office portfolio as of June 30, 2025:

Income Statement Review

Quarterly Results

The Company reported net income of $5.1 million for the second quarter of 2025, an increase of $1.2 million or 30.7% when compared to $3.9 million for the second quarter of 2024. Pre-tax, pre-provision net income (Non-GAAP) was $7.1 million for the three months ended June 30, 2025, representing an increase of $2.4 million or 50.7% when compared to the three months ended June 30, 2024, predominantly driven by the growth in net interest income.

For the three months ended June 30, 2025, net interest income increased $2.8 million or 23.5% to $14.9 million compared to $12.1 million for the three months ended June 30, 2024. During the same period, interest income increased $1.1 million or 3.9%, driven by higher interest income on loans, while interest expense declined by $1.8 million or 12.2%, predominantly due to lower interest expense on time deposits and money market accounts.

The annualized tax-equivalent net interest margin (Non-GAAP) for the second quarter of 2025 was 2.70% as compared to 2.19% for the same period in 2024. The increase in tax-equivalent net interest margin was primarily due to higher yields on interest-earning assets, driven by an increase in loan yields, coupled with lower rates on interest-bearing liabilities and decline in overall average funding balances.

The yield on interest-earning assets was 5.03% for the second quarter of 2025 compared to 4.85% for the same period in 2024 primarily due to a 22 basis points increase in loan yields and, to a lesser extent, a eight basis points increase in yields on investment securities. The cost of interest-bearing liabilities was 3.38% for the second quarter of 2025 compared to 3.81% for the same quarter in the prior year driven by 41 basis points decline in rates on interest-bearing deposits. Rates declined across all deposit categories, most notably in time deposits, money market and NOW accounts, which declined by 27 basis points, 51 basis points, and 43 basis points, respectively. Cost of borrowings declined from 4.98% for the prior year quarter to 4.53% in the most recent quarter, mainly as a result of the payoff of higher cost Bank Term Funding Program borrowings in September 2024, which were partially replaced with lower cost FHLB advances.

The Company recorded a $537 thousand provision for credit losses for the second quarter of 2025 compared to a recovery of provision for credit losses of $292 thousand for the second quarter of 2024. The provision for credit losses during the most recent quarter was directly attributable to the growth in the Company's loan portfolio quarter-over-quarter. All other credit-related assumptions used in the allowance estimate, including qualitative adjustments and economic forecasts, remained relatively consistent compared to the previous quarter.

Non-interest income decreased $48 thousand during the second quarter of 2025 compared to the second quarter of 2024. This decrease was primarily attributable to a $155 thousand reduction in gains recorded on sales of the guaranteed portions of SBA 7(a) loans due to lower sale activity, partially offset by favorable variances associated with mark-to-market adjustments on the Company's nonqualified deferred compensation plan totaling $147 thousand over the same period.

Non-interest expense increased $404 thousand or 5.1% during the second quarter of 2025 compared to the second quarter of 2024 primarily as a result of an increase in salaries and employee benefits expense and higher professional fees. The $303 thousand or 6.2% increase in salaries and employee benefits expense stemmed from the hiring of additional personnel. The Company hired five business development officers since June 30, 2024. Professional fees increased by $97 thousand or 46.7% due to an engagement of external advisors assisting the Company with various regulatory filings during the most recent quarter. These increases were partially offset by lower occupancy expense, resulting from relocating a branch to a lower cost and more favorable location, and lower marketing expense due to more efficient advertising initiatives.

For the three months ended June 30, 2025, annualized non-interest expense to average assets was 1.49% compared to 1.42% for the three months ended June 30, 2024. The increase was primarily due to higher non-interest expense, as described above, when comparing the two periods. For the three months ended June 30, 2025, the efficiency ratio declined to 53.9% compared to 62.6% for the three months ended June 30, 2024. This decrease in the efficiency ratio (reflecting an increase in efficiency) was primarily due to an increase in net interest income over the period.

Return on average assets for the quarter ended June 30, 2025 was 0.91% and return on average equity was 8.06% compared to 0.70% and 6.68%, respectively, for the second quarter of 2024.

Year-to-Date Results

The Company reported net income of $9.9 million for the six months ended June 30, 2025, an increase of $1.8 million or 22.2% when compared to the same period in 2024.

Net interest income for the six months ended June 30, 2025 increased $5.2 million or 21.8% compared to the same period of 2024, driven primarily by the decrease in costs of interest-bearing liabilities coupled with the increase in yield on interest-earning assets. The yield on interest earning assets was 5.01% for the six months ended June 30, 2025 compared to 4.84% for the same period in 2024. The increase in yield on interest earning assets was primarily due to higher yields on the Company's loans and securities as a result of higher prevailing interest rates as assets repriced subsequent to the second quarter of 2024. The cost of interest-bearing liabilities was 3.43% for the six months ended June 30, 2025 compared to 3.81% for the six months ended June 30, 2024. The decrease in the cost of interest-bearing liabilities was primarily due to a 36 basis points decrease in the cost of interest-bearing deposits as a result of the repricing of the Company's time deposits coupled with a decrease in rates offered on money market, NOW and savings deposit accounts since the second quarter of 2024. The annualized net interest margin and tax-equivalent net interest margin (Non-GAAP) for the six months ended June 30, 2025 were 2.63% and 2.64%, respectively, as compared to 2.14% and 2.15%, respectively, for the same period in the prior year. The increase in net interest margin was primarily due to the decrease in cost of interest-bearing deposits along with an increase in yields on the Company's interest-earning assets.

The Company recorded a $707 thousand provision for credit losses for the six months ended June 30, 2025 compared to a $1.1 million recovery of provision for credit losses for the six months ended June 30, 2024. The provision for credit losses during the six months ended June 30, 2025 was primarily a result of changes in the composition and volume of the loan portfolio, updated economic forecasts used in the quantitative portion of the model and an assessment of management's considerations of qualitative factors.

Non-interest income decreased $361 thousand during the six months ended June 30, 2025 compared to the same period of 2024. The decrease was primarily driven by a $252 thousand decrease on the recorded gain on sale of the government guaranteed portion of the SBA 7(a) loans due to decreased sale activity, a $64 thousand decrease in swap fee income and a $46 thousand decrease in insurance commissions.

Non-interest expense increased $728 thousand or 4.6% during the six months ended June 30, 2025 compared to the same period in 2024 primarily driven by a $592 thousand or 6.1% increase in salaries and employee benefits. The Company hired five business development officers during the preceding twelve months. Other expenses increased $189 thousand or 4.1% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Increases were primarily in data processing and state franchise tax, partially offset by a reduction in marketing expense. Furniture and equipment expenses increased $32 thousand or 5.4% for the six months ended June 30, 2025 compared to the same period in 2024. The increase was due to investment and maintenance in technology. These increases were partially offset by a decrease in the Company's occupancy expense, which declined by $85 thousand or 9.5% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due to relocating a branch to a more favorable location.

For the six months ended June 30, 2025, annualized non-interest expense to average assets was 1.49% compared to 1.41% for the six months ended June 30, 2024. The increase was primarily due to higher non-interest expenses combined with lower average assets when comparing the two periods.

For the six months ended June 30, 2025, the annualized efficiency ratio was 55.1% compared to 62.8% for the six months ended June 30, 2024. The decrease was primarily due to an increase in net interest income.

Return on average assets for the six months ended June 30, 2025 was 0.89% and return on average equity was 7.91% compared to 0.72% and 6.95%, respectively, for the six months ended June 30, 2024.

Explanation of Non-GAAP Financial Measures

This release contains financial information determined by methods other than in accordance with GAAP. Management believes that the supplemental Non-GAAP information provides a better comparison of period-to-period operating performance and unrealized losses in the Company's bond portfolio on the Bank's regulatory capital ratios. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:

• Tax-equivalent net interest margin reflects adjustments for differences in tax treatment of interest income sources;
• Adjusted Bank regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and any losses realized; and
• Pre-tax, pre-provision earnings excludes income tax expense and the provision for (recovery of) credit losses.

These disclosures should not be viewed as a substitute for, or more important than, financial results in accordance with GAAP, nor are they necessarily comparable to Non-GAAP performance measures which may be presented by other companies. Please refer to the Reconciliation of Certain Non-GAAP Financial Measures table and Average Balance Sheets, Interest and Rates tables for the respective periods for a reconciliation of these Non-GAAP measures to the most directly comparable GAAP measure.

About John Marshall Bancorp, Inc.

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington, D.C. Metropolitan area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers' financial goals. Dedicated relationship managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including charter and private schools, government contractors, health services, nonprofits and associations, professional services, property management companies and title companies. Learn more at www.johnmarshallbank.com.

Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this press release 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 Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "should," "may," "view," "opportunity," "potential," or similar expressions or expressions of confidence. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and the Bank include, but are not limited to, the following: the concentration of our business in the Washington, D.C. metropolitan area and the effect of changes in the economic, political and environmental conditions on this market, including potential reductions in spending by the U.S. Government and related reductions in the federal workforce; adequacy of our allowance for loan credit losses; allowance for unfunded commitments credit losses, and allowance for credit losses associated with our held-to-maturity and available-for-sale securities portfolios; deterioration of our asset quality; future performance of our loan portfolio with respect to recently originated loans; the level of prepayments on loans and mortgage-backed securities; liquidity, interest rate and operational risks associated with our business; changes in our financial condition or results of operations that reduce capital; our ability to maintain existing deposit relationships or attract new deposit relationships; changes in consumer spending, borrowing and savings habits; inflation and changes in interest rates that may reduce our margins or reduce the fair value of financial instruments; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; additional risks related to new lines of business, products, product enhancements or services; increased competition with other financial institutions and fintech companies; adverse changes in the securities markets; changes in the financial condition or future prospects of issuers of securities that we own; our ability to maintain an effective risk management framework; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; compliance with legislative or regulatory requirements; results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take similar actions; potential claims, damages, and fines related to litigation or government actions; the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; geopolitical conditions, including trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses thereto; technological risks and developments, and cyber threats, attacks, or events; changes in accounting policies and practices; our ability to successfully capitalize on growth opportunities; our ability to retain key employees; deteriorating economic conditions, either nationally or in our market area, including higher unemployment and lower real estate values; implications of our status as a smaller reporting company and as an emerging growth company; and other factors discussed in the Company's reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.