John Marshall Bancorp, Inc. Reports Second Quarter 2023 Results, Strong Balance Sheet and Well-Positioned for Anticipated Loan Growth

John Marshall Bancorp, Inc. (NASDAQ:JMSB) (the "Company"), parent company of John Marshall Bank (the "Bank"), reported its financial results for the three and six months ended June 30, 2023.

Selected Highlights

• Pristine Asset Quality – For the fifteenth consecutive quarter, the Company had no nonperforming loans, no other real estate owned and no loans 30 days or more past due. As of June 30, 2023, there were no loans greater than 10 days past due. There were no charge-offs during the quarter. The Company remains steadfast in adhering to our strict underwriting standards and the diligent management of the portfolio.
• Increasingly Well-Capitalized – The Bank's capital ratios remain significantly above regulatory thresholds for well-capitalized banks. Our regulatory capital ratios have increased or remained the same as the prior quarter in each of the past four quarters.
• Significant Liquidity – The Company's liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $839.4 million as of June 30, 2023, representing 35.5% of total assets. The Company's liquidity position represented 120% of uninsured, non-collateralized deposits at June 30, 2023, up from 113% at March 31, 2023.
• Strength in CRE Loan Portfolio – The Company's loan portfolio remains a source of strength. As of June 30, 2023, the Company's commercial real estate ("CRE") non-owner occupied and owner-occupied portfolios had a weighted average loan-to-values of 51.7% and 55.8%, respectively, and weighted average debt service coverage ratios of 2.3x and 3.3x, respectively.
• Initial SBA Loan Sale – During the quarter, the Company completed its first Small Business Administration ("SBA") loan sale. The Company is accelerating activity in this business line and intends to become a preferred lender. We believe the preferred lender status will allow us to streamline the SBA borrowing process for our existing and potential customers and thereby increase loan and deposit balances and fee income.
• Profitability – Annualized return on average equity for the three months ended June 30, 2023 was 8.13%. The Company's profitability has been impacted by the significant increase in short-term rates that affected funding costs. Long-term profitability will be positively impacted by the restructuring, as further discussed below, and anticipated loan growth.

On July 17, 2023, the Company sold $161.7 million in lower-yielding available-for-sale investment securities and redeemed $21.4 million of Bank Owned Life Insurance ("BOLI") assets (the "restructuring"), resulting in a non-recurring, after-tax loss of $14.6 million. The sale of the available-for-sale securities will not impact book-value-per-share as the after-tax loss of $13.5 million was already reflected in accumulated other comprehensive loss as of June 30, 2023. The remaining $1.1 million after-tax loss stems from the taxation on the gain associated with the expected cash payout from the BOLI policies. The proceeds from the restructuring will be reinvested in higher yielding assets with an expected after-tax loss earn back of less than 3 years. The restructuring is expected to improve the Company's earnings, while maintaining strong capital ratios on a generally accepted accounting principles ("GAAP") basis and continuing to meaningfully exceed well-capitalized ratios on a regulatory basis. Upon completion of the sale, the Company's available-for-sale and held-to-maturity fixed income securities portfolio has an estimated weighted average life of 4.6 years and the available-for-sale portfolio has an estimated weighted average life of 3.2 years. Nearly 65% of the remaining portfolio is invested in amortizing bonds and is expected to return, on average, $2.5 million in cash flows each month.

Chris Bergstrom, President and Chief Executive Officer, commented, "The Federal Reserve's rapid increase in the federal funds rate from 0.25% to 5.25% over the past 15 months has resulted in a challenging environment. Short-term yields have exceeded long-term yields causing an inverted yield curve. Inverted yield curves drive up funding costs with comparatively less relief from increased loan yields and exert pressure on net interest margin. As demonstrated by our 15th consecutive quarter of zero non-performing assets, we remain laser focused on credit. Furthermore, we have organically increased both our capital and liquidity positions for the opportunities that we believe are ahead. Our loan pipeline, with credits that meet our stringent criteria, is building for very promising growth in the second half of this year. The restructuring that we executed in July provides additional funding to be redeployed in higher yielding assets. This will benefit our net interest margin and bottom line. In short, we are well-positioned to continue to develop and grow relationships with competitive financial products and services and access to the Bank's decision makers. Recession or soft landing, we believe the strength of our balance sheet provides flexibility to pursue prudent and profitable growth."

Balance Sheet, Liquidity and Credit Quality

Total assets were $2.36 billion at June 30, 2023, $2.35 billion at March 31, 2023 and $2.32 billion at June 30, 2022. Asset growth from June 30, 2022 to June 30, 2023 was $47.9 million or 2.1%.

Total loans, net of unearned income, increased $77.1 million or 4.6% to $1.77 billion at June 30, 2023, compared to $1.69 billion at June 30, 2022. The increase in loans was primarily attributable to growth in the residential mortgage and commercial investor real estate loan portfolios.

Total loans, net of unearned income, decreased $1.5 million during the quarter ended June 30, 2023 or 0.1% from $1.77 billion at March 31, 2023. The decrease in loans was primarily attributable to loan pay downs and payoffs exceeding originations in the investor real estate, multifamily, commercial business and commercial owner occupied real estate loan portfolios. The Company's loan pipeline headed into the third quarter of 2023 is robust and gaining momentum. We are seeing increased lending opportunities that meet our underwriting standards and, in many cases, fewer competitors for those loans as some market participants have scaled back lending efforts.

The carrying value of the Company's fixed income securities investment portfolio was $422.7 million at June 30, 2023, $438.7 million at March 31, 2023 and $467.4 million at June 30, 2022. Only $11.7 million or 2.8% of our bond portfolio is not covered by the implied guarantee of the United States government or one of its agencies and is largely comprised of high-quality Virginia and Maryland municipal bonds rated AA or better at June 30, 2023. At June 30, 2023, nearly 70% of the fixed income portfolio is invested in amortizing bonds, which provides the Company with a source of steady cash flow. At June 30, 2023, the fixed income portfolio had an estimated weighted average life of 4.4 years. The available-for-sale portfolio comprised approximately 79% of the fixed income securities portfolio and had a weighted average life of 3.6 years at June 30, 2023. The held-to-maturity portfolio comprised approximately 21% of the fixed income securities portfolio and had a weighted average life of 7.1 years at June 30, 2023. The Company did not purchase any fixed income securities during the three or six month periods ended June 30, 2023.

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 $839.4 million as of June 30, 2023 compared to $852.6 million as of March 31, 2023 and represented 35.5% and 36.3% of total assets, respectively. The decrease in the Company's liquidity position during the quarter resulted primarily from pledging securities to obtain the Bank Term Funding Program ("BTFP") advance, as discussed below. Wholesale deposits, defined as brokered and QwickRate certificates of deposit, decreased $36.7 million or 9.3% from $395.8 million at March 31, 2023 to $359.1 million at June 30, 2023.

On May 15, 2023, the Company obtained a $54.0 million advance from the Federal Reserve Bank's BTFP to secure lower funding costs relative to wholesale deposits. The BTFP advance has a term of one year and bears interest at a fixed rate of 4.80%.

If the Company were to avail itself of additional BTFP funding, we estimate an incremental increase in our liquidity position of approximately $29.1 million, increasing our potential liquidity to $868.5 million as of June 30, 2023. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at June 30, 2023.

Total deposits were $2.05 billion at June 30, 2023, $2.09 billion at March 31, 2023 and $2.04 billion at June 30, 2022. Deposits increased $2.6 million or 0.1% when compared to June 30, 2022. The increase in deposits was primarily due to time deposit growth. Total deposits decreased $42.3 million or 2.0% when compared to March 31, 2023. The decrease was primarily due to a decrease in costlier wholesale deposits of $36.7 million or 9.3% from $395.8 million at March 31, 2023 to $359.1 million at June 30, 2023. NOW deposits increased $26.4 million to partially offset the decrease in wholesale deposits. As of June 30, 2023, the Company had $697.0 million of deposits that were not insured or not collateralized by securities compared to $756.0 million at March 31, 2023. Deposits that were not insured or not collateralized by securities represented only 34.1% of total deposits at June 30, 2023 compared to 36.2% at March 31, 2023.

Total borrowings as of June 30, 2023 consisted of subordinated debt totaling $24.6 million and a BTFP advance totaling $54.0 million. On May 15, 2023, the Company obtained a $54.0 million advance from the Federal Reserve Bank's BTFP to secure lower funding costs relative to wholesale deposits. The BTFP advance has a term of one year, bears interest at a fixed rate of 4.80% and can be prepaid without penalty prior to maturity. The Company did not have any FHLB advances or federal funds purchased outstanding as of June 30, 2023.

Shareholders' equity increased $11.4 million or 5.5% to $219.0 million at June 30, 2023 compared to $207.5 million at June 30, 2022. Book value per share was $15.50 as of June 30, 2023 compared to $14.80 as of June 30, 2022. The year-over-year change in book value per share was primarily due to the Company's earnings over the previous twelve months, partially offset by an increase in accumulated other comprehensive loss, increased share count from shareholder option exercises and restricted share award issuances and dividends paid. The increase in accumulated other comprehensive loss was primarily attributable to increases in unrealized losses on our available-for-sale investment portfolio due to market value changes as a result of rising interest rates.

The Bank's capital ratios at June 30, 2023 improved when compared to June 30, 2022. We remain well above regulatory thresholds for well-capitalized banks. As of June 30, 2023, the Bank's total risk-based capital ratio was 16.1%, compared to 15.1% at June 30, 2022 (GAAP). As outlined below, the Bank would continue to remain well above regulatory thresholds for well-capitalized banks at June 30, 2023 in the hypothetical scenario where the entire bond portfolio was sold at fair market value and the 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.

The Company recorded no charge-offs during the second quarter of 2023, during the first quarter of 2023 or during the second quarter of 2022. As of June 30, 2023, the Company had no non-accrual loans, no loans greater than 10 days past due and no other real estate owned assets.

At June 30, 2023, the allowance for loan credit losses was $20.6 million or 1.17% of outstanding loans, net of unearned income, compared to $21.6 million or 1.22% of outstanding loans, net of unearned income, at March 31, 2023. The decrease in the allowance as a percentage of outstanding loans, net of unearned income, was primarily a result of improvement in the forecasted housing price index used in the quantitative component of the CECL model and changes in qualitative factors.

At June 30, 2023, the allowance for credit losses on unfunded loan commitments was $1.1 million compared to $1.0 million at March 31, 2023. The increase in the allowance for credit losses on unfunded loan commitments was primarily the result of an increase in unfunded commitment balances during the quarter.

The Company did not have an allowance for credit losses on held-to-maturity securities as of June 30, 2023 or March 31, 2023.

The Company's owner occupied and non-owner occupied CRE portfolios continue to be of sound credit quality. The following table provides a detailed breakout of the two aforementioned portfolios, demonstrating their strong debt-service-coverage and loan-to-value ratios.

Income Statement Review

Quarterly Results

Net income for the second quarter of 2023 decreased $3.4 million or 43.0% to $4.5 million compared to $7.9 million for the second quarter of 2022. Earnings per diluted share for the three months ended June 30, 2023 were $0.32, a 42.9% decrease when compared to the $0.56 reported for the three months ended June 30, 2022. Annualized Return on Average Assets ("ROAA") was 0.77% and annualized Return on Average Equity ("ROAE") was 8.13% for the three months ended June 30, 2023.

Net interest income for the second quarter of 2023 decreased $5.3 million or 30.6% compared to the second quarter of 2022, driven primarily by the increase in costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.27% for the second quarter of 2023 compared to 3.57% for the same period in 2022. The increase in yield on interest earning assets was primarily due to higher yields on the Company's loan and investment portfolios and deposits in banks as a result of increases in interest rates subsequent to the second quarter of 2022. The cost of interest-bearing liabilities was 2.99% for the second quarter of 2023 compared to 0.60% for the same quarter of the prior year. The increase in the cost of interest-bearing liabilities was primarily due to a 2.46% increase in the cost of interest-bearing deposits as a result of the repricing of the Company's time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the second quarter of 2022. The increase in the overall cost of interest-bearing liabilities in the second quarter of 2023 relative to the same period of the prior year is largely due to rate hikes totaling 5.00% by the Federal Reserve Bank since the beginning of 2022, which is increasing cost of funds and compressing net interest margins across the banking industry. The annualized net interest margin for the second quarter of 2023 was 2.10% as compared to 3.16% for the same quarter of the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company's interest-earning assets.

The Company recorded an $868 thousand release of provision for credit losses for the second quarter of 2023 compared to no provision for the second quarter of 2022. The release of provision for credit losses during the second quarter of 2023 was due to an improvement in the forecasted housing price index used in the quantitative component of the CECL model, changes in qualitative factors and a decrease in loan balances during the second quarter of 2023.

Non-interest income increased $576 thousand during the second quarter of 2023 compared to the second quarter of 2022 (GAAP). The increase in non-interest income was primarily due to an increase of $357 thousand as a result of mark-to-market adjustments on investments related to the Company's nonqualified deferred compensation plan. The Company also had an increase in other service charges and fee income of $157 thousand primarily as a result of penalty fee income recognized on the early withdrawal of certificates of deposit. The increase in non-interest income was also attributable to a $23 thousand gain recorded as a result of the Company's first sale of the guaranteed portion of a SBA 7(a) loan. Excluding mark-to-market adjustments on nonqualified deferred compensation plan investments, non-interest income increased $219 thousand or 57.3% when compared to the same period in 2022 (Non-GAAP).

Non-interest expense increased $150 thousand or 2.0% during the second quarter of 2023 compared to the three months ended June 30, 2022. The increase in non-interest expense was primarily due to an increase in salaries and employee benefit expense as a result of lower loan origination costs due to lower loan origination volume in the second quarter of 2023 when compared to the same period of the prior year. Salaries and employee benefit expense is reduced to account for the portion of salary costs incurred to originate a loan and are subsequently amortized into income to match the costs incurred with the economic benefit derived from originating a loan. The increase in non-interest expense was also attributable to increases in FDIC insurance expense and franchise tax expense. The increase in FDIC insurance expense resulted from the FDIC increasing the base assessment rate for all insured depository institutions. The increase in franchise tax expense was due to an increase in the Bank's equity as that is the basis the Commonwealth of Virginia uses to assess taxes on banking institutions. The increase in non-interest expense was partially offset by decreases in professional fees, occupancy expense of premises and furniture and equipment expense. The decrease in professional fees was due to non-recurring professional fees incurred in the second quarter of 2022 as part of our registration with the Securities and Exchange Commission ("SEC") and timing of projects. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The Company continues to analyze cost savings opportunities on existing leases and material contracts.

For the three months ended June 30, 2023, annualized non-interest expense to average assets was 1.34% compared to 1.38% for the three months ended June 30, 2022. The decrease was primarily due to lower overhead costs as a result of continued cost consciousness.

For the three months ended June 30, 2023, the annualized efficiency ratio was 61.7% compared to 44.1% for the three months ended June 30, 2022. The increase was primarily due to a decrease in net interest income and to a lesser extent, an increase in non-interest expense, which was partially offset by an increase in non-interest income.

Year-to-Date Results

Net income for the six months ended June 30, 2023 decreased $4.8 million or 30.6% to $10.8 million compared to $15.6 million for the same period of 2022. Earnings per diluted share for the six months ended June 30, 2023 were $0.76, a 31.3% decrease when compared to the $1.10 reported for the six months ended June 30, 2022. Annualized ROAA was 0.93% and annualized ROAE was 9.85% for the six months ended June 30, 2023.

Net interest income for the six months ended June 30, 2023 decreased $8.7 million or 24.8% compared to the same period of 2022, driven primarily by the increase in costs of interest-bearing liabilities outpacing the increase in yield on interest-earning assets. The yield on interest earning assets was 4.21% for the six months ended June 30, 2023 compared to 3.62% for the same period in 2022. The increase in yield on interest earning assets was primarily due to higher yields on the Company's loan and investment portfolios and deposits in banks as a result of increases in interest rates subsequent to the second quarter of 2022. The cost of interest-bearing liabilities was 2.63% for the six months ended June 30, 2023 compared to 0.55% for the six months ended June 30, 2022. The increase in the cost of interest-bearing liabilities was primarily due to a 2.14% increase in the cost of interest-bearing deposits as a result of the repricing of the Company's time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the second quarter of 2022. The annualized net interest margin for the six months ended June 30, 2023 was 2.33% as compared to 3.25% for the period of the prior year. The decrease in net interest margin was primarily due to the increase in cost of interest-bearing deposits, which was partially offset by an increase in yields on the Company's interest-earning assets.

The Company recorded a $1.6 million release of provision for credit losses for the six months ended June 30, 2023 compared to no provision for the six month ended June 30, 2022. The release of provision for credit losses during the six months ended June 30, 2023 was due to an improvement in the forecasted housing price index used in the quantitative component of the CECL model, changes in qualitative factors and a decrease in loan balances during the first half of the year.

Non-interest income increased $728 thousand during the six months ended June 30, 2023 compared to the same period of 2022 (GAAP). The increase in non-interest income was primarily due to an increase of $563 thousand as a result of mark-to-market adjustments on investments related to the Company's nonqualified deferred compensation plan. The Company also had an increase in other service charges and fee income of $223 thousand primarily as a result of penalty fee income recognized on the early withdrawal of certificates of deposit, as well as a $91 thousand increase in customer interest rate swap fee income. These increases were partially offset by losses of $202 thousand recognized on the sale of $12.0 million of investment securities during six months ended June 30, 2023. The sales were executed to manage the Company's interest rate risk position, allow for the reinvestment of proceeds into higher yielding assets and as a risk management strategy to reduce the Company's exposure to municipalities. Excluding mark-to-market adjustments on nonqualified deferred compensation plan investments and the loss on securities sold, non-interest income increased $367 thousand or 40.2% when compared to the same period in 2022 (Non-GAAP).

Non-interest expense decreased $866 thousand or 5.3% for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease in non-interest expense was primarily due to decreases in salaries and employee benefits expense, professional fees, occupancy expense of premises and furniture and equipment expense. The decrease in salaries and employee benefits was primarily due to a reduction in incentive compensation accruals when compared to the same period of the prior year. Incentive compensation accruals can fluctuate materially from quarter to quarter, based upon the Company's financial performance and conditions measured against, among other evaluation criteria, our strategic plan and budget. At the end of each year, the ultimate determination of the incentive compensation is approved by the Board of Directors. The decrease in professional fees was due to non-recurring professional fees incurred in the first half of 2022 as part of our registration with the SEC and timing of projects. The decrease in occupancy expense of premises was due to a decrease in office rent as a result of the renegotiation of certain leases. The decrease in furniture and equipment expense was due to lower depreciation expense on fixed assets. The decrease in non-interest expense was partially offset by increases in FDIC insurance expense, franchise tax expense and director compensation expense. The increase in FDIC insurance expense was attributable to the FDIC increasing the base assessment rate for all insured depository institutions. The increase in franchise tax expense was due to an increase in the Bank's equity as that is the basis the Commonwealth of Virginia uses to assess taxes on banking institutions. The increase in director compensation expense was primarily due to the accelerated vesting of restricted stock awards as a result of the death of a director during the first quarter of 2023.

For the six months ended June 30, 2023, annualized non-interest expense to average assets was 1.34% compared to 1.49% for the six months ended June 30, 2022. The decrease was primarily due to lower overhead costs as a result of continued cost consciousness.

For the six months ended June 30, 2023, the annualized efficiency ratio was 56.3% compared to 46.1% for the six months ended June 30, 2022. The increase was primarily due to a decrease in net interest income, which more than offset the increase in non-interest income and decrease in non-interest expense.

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 the impact of unrealized losses in the Company's bond portfolio on the Bank's regulatory capital ratios and period-to-period operating performance, respectively. 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:

• The impact to the Bank's regulatory capital ratios in the hypothetical scenario where the entire bond portfolio was sold at fair market value and the losses realized.
• Non-interest income excluding the impact of mark-to-market adjustments on investments related to the Company's nonqualified deferred compensation plan and losses recognized on the sale of available-for-sale securities.

These disclosures should not be viewed as a substitute for 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 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 a $2.36 billion asset bank 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. Metro 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.

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; adequacy of our allowance for credit losses; 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 acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, negatively impacting business and economic conditions in the U.S. and abroad; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts (such as the ongoing war between Russia and Ukraine) or public health events (such as COVID-19), and of governmental and societal responses thereto; technological risks and developments, and cyber threats, attacks, or events; the additional requirements of being a public company; 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 SEC. 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.