RESTON, Va.--(BUSINESS WIRE)--John Marshall Bancorp, Inc. (Nasdaq: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”), reported net income of $6.1 million for the quarter ended March 31, 2026 compared to $4.8 million for the quarter ended March 31, 2025, an increase of $1.3 million or 26.8%. Diluted earnings per common share were $0.43 for the quarter ended March 31, 2026 compared to $0.34 for the quarter ended March 31, 2025, an increase of 26.5%. Annualized return on average assets was 1.06% for the quarter ended March 31, 2026 compared to 0.87% for the quarter ended March 31, 2025. Annualized return on average equity was 9.19% for the quarter ended March 31, 2026 compared to 7.76% for the quarter ended March 31, 2025.

Selected Highlights

• Earnings Growth Momentum – Net income of $6.1 million for the quarter ended March 31, 2026 represented a 3.1% increase over the $5.9 million net income reported for the quarter ended December 31, 2025 or an annualized quarter-over-quarter increase of 12.7%. The quarter ended March 31, 2026 marked the seventh consecutive quarter of net income growth. Diluted earnings per common share were $0.43 for the quarter ended March 31, 2026 and represented a 2.4% increase over the $0.42 diluted earnings per common share reported for the quarter ended December 31, 2025 or an annualized quarter-over-quarter increase of 9.7%.
• Significant Increase in Net Interest Income - For the three months ended March 31, 2026, the Company reported net interest income of $16.5 million, a $2.4 million or 17.1% increase over the prior year first quarter.
• Continued Net Interest Margin Expansion - Net interest margin expanded for the eighth consecutive quarter. Net interest margin increased 29 basis points, from 2.58% for the first quarter of 2025 to 2.87% for the first quarter of 2026. Net interest margin grew 14 basis points when compared to 2.73% for the fourth quarter of 2025.
• Focused on Core Funding and Loan Growth - The Company remains focused on driving value through core funding growth. For the twelve months ended March 31, 2026, total deposits increased $65.6 million or 3.4%. For the twelve months ended March 31, 2026, non-interest bearing demand deposits increased $20.4 million or 4.7%. Non-interest bearing demand deposits grew $25.5 million or 5.9% from December 31, 2025 to March 31, 2026. Non-interest bearing demand deposits represented 23.1% of total deposits as of March 31, 2026, an increase from 21.9% as of December 31, 2025. For the twelve months ended March 31, 2026, gross loans increased $103.3 million or 5.5%.
• Positive Operating Leverage – Revenues (net interest income plus non-interest income) grew 15.0% for the quarter ended March 31, 2026 relative to the quarter ended March 31, 2025, while non-interest expense increased 8.2%, over the same period. This positive trend in operating leverage improved the efficiency ratio from 56.5% for the three months ended March 31, 2025 to 53.1% for the three months ended March 31, 2026.
• Strong Asset Quality – Overall credit quality of the loan portfolio remains exceptional. The Company recorded no charge-offs during the first quarter of 2026 and had no other real estate owned assets as of March 31, 2026. During the most recent quarter, management placed one U.S. Small Business Administration (“SBA”) 7(a) loan in the total amount of $984 thousand on non-accrual status, representing the Company’s only non-accrual loan as of March 31, 2026. The entire outstanding loan amount is fully guaranteed by the SBA. The Company has submitted the guaranty purchase to the SBA and expects to receive the full guarantee payment. This is the only non-accrual loan since the third quarter of 2019.
• Growing Book Value per Share and Dividends – Book value per share increased from $17.72 as of March 31, 2025 to $19.00 as of March 31, 2026, a 7.2% increase. On April 28, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.09 per share on the Company’s common stock. The dividend is payable on June 3, 2026 to shareholders of record at the close of business on May 13, 2026. The annualized quarterly cash dividend represents a 20% increase over the 2025 annual cash dividend.
• Robust Capitalization – Each of the Bank’s regulatory capital ratios remained well in excess of the regulatory well-capitalized thresholds as of March 31, 2026. During the three months ended March 31, 2026, the Company repurchased 103,507 shares of its common stock at a weighted average price of $19.69.

Chris Bergstrom, President and Chief Executive Officer, commented, “The first quarter of 2026 marks the eighth consecutive quarter of net interest margin improvement. Of the 29 basis points of margin improvement over the last year, 14 basis points of that increase occurred during the first quarter of 2026. Increased margin and $103 million in loan growth over the last twelve months enabled the Company to grow both net income and earnings per share by 27%. Our asset quality remains outstanding. We expect the SBA to pay their guarantee and resolve our one non-accruing loan. With 16.5% total risk-based capital, we have the requisite equity to grow loans at appropriate risk-adjusted returns. Alternatively, we have ample excess capital to build upon the 103,000 shares we repurchased during the first quarter. Our priorities remain unchanged. We continue to invest in technology and personnel to cultivate new relationships and deepen existing ones. We remain focused on delivering tailored banking services and exceptional client experiences. As demonstrated by the nearly 23% increase in our share price from March 31, 2025 to March 31, 2026 and our increased quarterly cash dividend rate, we believe our balance sheet allows us to focus on continued growth, and drive increased returns and shareholder value.”

Balance Sheet, Liquidity and Credit Quality

Total assets were $2.35 billion at March 31, 2026, $2.33 billion at December 31, 2025, and $2.27 billion at March 31, 2025. Total assets increased $19.8 million or 3.4% annualized since December 31, 2025 and $79.9 million or 3.5% from March 31, 2025.

Total loans, net of unearned income, declined $1.6 million or 0.3% annualized to $1.97 billion at March 31, 2026 compared to $1.98 billion at December 31, 2025 and increased $103.3 million or 5.5% from $1.87 billion at March 31, 2025. The increase in loans over the preceding twelve months was primarily attributable to growth in construction & development loans and residential mortgage loans. Refer to the Loan, Deposit and Borrowing Detail table for further information.

The carrying value of the Company’s fixed income securities portfolio was $213.8 million at March 31, 2026, $212.3 million at December 31, 2025, and $215.6 million at March 31, 2025. During the most recent quarter, the Company purchased seven fixed income securities, designated as available-for-sale, with the total carrying amount of $15.0 million and a weighted average purchase yield of 4.08%. The current quarter’s maturities had an average yield of 2.07%. As of March 31, 2026, 95.3% of our bond portfolio carried the implied guarantee of the United States government or one of its agencies. At March 31, 2026, 70.6% of the fixed income portfolio was invested in amortizing bonds, which provides the Company with a source of steady cash flow. At March 31, 2026, the fixed income portfolio had an estimated weighted average life of 3.9 years. The available-for-sale portfolio comprised approximately 61% of the fixed income securities portfolio and had a weighted average life of 3.2 years at March 31, 2026. The held-to-maturity portfolio comprised approximately 39% of the fixed income securities portfolio and had a weighted average life of 4.9 years at March 31, 2026.

The Company did not have an allowance for credit losses on held-to-maturity securities as of March 31, 2026 or December 31, 2025. As of March 31, 2026, 93.1% of our held-to-maturity portfolio carried the implied guarantee of the United States government or one of its agencies.

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 $881.0 million as of March 31, 2026 compared to $827.0 million as of December 31, 2025 and represented 37.5% and 35.5% 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, 2026.

Total deposits increased $15.4 million or 3.2% annualized to $1.99 billion at March 31, 2026 compared to $1.97 billion at December 31, 2025, and increased $65.6 million or 3.4% from $1.92 billion at March 31, 2025. During the most recent quarter, total non-interest bearing deposits increased $25.5 million or 23.9% annualized when compared to December 31, 2025, while total interest-bearing deposits declined $10.0 million or 2.6% annualized over the same period. As further detailed in the tables included in this release, core funding sources have increased $15.7 million, while wholesale funding sources have decreased $0.2 million since December 31, 2025. Detail on the deposit activity can be seen in the Loan, Deposit and Borrowing Detail table. As of March 31, 2026, the Company had $724.6 million of deposits that were not insured or not collateralized compared to $691.5 million and $660.8 million at December 31, 2025 and March 31, 2025, respectively.

Federal Home Loan Bank (“FHLB”) advances remained unchanged at $56.0 million as of March 31, 2026 compared to December 31, 2025 and March 31, 2025. During the first quarter of 2026, a $15.0 million maturing FHLB advance, carrying an interest rate of 4.14%, was replaced with the FHLB advance of the same principal amount and the interest rate of 3.61%. As of March 31, 2026, the FHLB advances had a weighted average fixed interest rate of 3.85%. In addition to outstanding FHLB advances, total borrowings as of March 31, 2026 included subordinated debt totaling $24.9 million.

Shareholders’ equity increased $15.1 million or 6.0% to $268.1 million at March 31, 2026 compared to $253.0 million at March 31, 2025. Book value per share was $19.00 as of March 31, 2026 compared to $17.72 as of March 31, 2025, an increase of 7.2%. 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, resulting from an increase in the market value of our available-for-sale investment portfolio. These increases were partially offset by cash dividends paid and a reduction of additional paid-in capital due to the Company’s share repurchases during the period.

The Bank’s capital ratios remained well above regulatory thresholds for well-capitalized banks. As of March 31, 2026, the Bank’s total risk-based capital ratio was 16.5%, compared to 16.3% at December 31, 2025, and 16.5% at March 31, 2025.

During the quarter ended March 31, 2026, the Company designated one commercial business SBA 7(a) loan as non-accrual. As of March 31, 2026, the total outstanding principal amount of the loan was $984 thousand and is fully guaranteed by the SBA. The Company charged-off the unguaranteed portion of the loan, in the total amount of $361 thousand, during the fourth quarter of 2025 and submitted a reimbursement claim to the SBA for the guaranteed portion. We expect the SBA to pay their guarantee and resolve our one non-accruing loan. During the three months ended March 31, 2026, the Company recorded no charge-offs and had no other real estate owned assets as of March 31, 2026.

At March 31, 2026, the allowance for loan credit losses was $20.0 million or 1.01% of outstanding loans, net of unearned income, compared to $19.8 million or 1.00% of outstanding loans, net of unearned income, at December 31, 2025. Asset quality remains strong. Management continues to assess credit risk exposure and monitor macroeconomic indicators that may impact borrower behavior and repayment capacity. Management believes the current allowance for credit losses is appropriate given the composition and performance of the loan portfolio.

At March 31, 2026, the allowance for credit losses on unfunded loan commitments was $1.2 million compared to $1.3 million at December 31, 2025, due to a lower amount of available loan commitments.

The Company believes its owner occupied and non-owner occupied commercial real estate portfolios continue to be of sound credit quality. The following table demonstrates their strong debt-service-coverage and loan-to-value ratios as of March 31, 2026.

The following charts provide geographic detail and stated maturity summaries for the Company’s non-owner occupied office portfolio as of March 31, 2026:

Income Statement Review

Quarterly Results

The Company reported net income of $6.1 million for the first quarter of 2026, an increase of $1.3 million or 26.8% when compared to $4.8 million for the first quarter of 2025.

For the three months ended March 31, 2026, net interest income increased $2.4 million or 17.1% to $16.5 million compared to $14.1 million for the three months ended March 31, 2025. During the same period, interest income grew $1.8 million or 6.5%, driven by higher interest income on loans, while interest expense declined by $0.6 million or 4.8%, predominantly due to lower interest expense on time deposits, interest-bearing checking accounts and money market accounts.

The annualized net interest margin for the first quarter of 2026 was 2.87% compared to 2.58% for the same period in 2025. The increase in net interest margin was primarily due to increases in average balances and yields of the loan portfolio, coupled with lower rates on interest-bearing deposits.

The cost of interest-bearing liabilities was 3.15% for the first quarter of 2026 compared to 3.48% for the same quarter in the prior year driven by the 34 basis points decline in rates on interest-bearing deposits. Rates declined across all deposit categories, most notably in money market accounts, time deposits and interest-bearing demand deposits, which declined by 37 basis points, 36 basis points, and 31 basis points, respectively. The yield on interest-earning assets was 5.07% for the first quarter of 2026 compared to 4.99% for the same period in 2025 primarily due to an eight basis point increase in loan yield coupled with a 28 basis point increase in securities yield. These increases were partially offset by a 76 basis points decrease in yield on interest-bearing deposits in other banks, as a result of three federal funds rate cuts totaling 75 basis points during the previous year. Average loans increased by $105.9 million between the three months ended March 31, 2026 and the three months ended March 31, 2025, which was primarily attributable to origination volume in the construction & development and residential mortgage loan portfolios subsequent to March 31, 2025.

The Company recorded a $23 thousand provision for credit losses for the first quarter of 2026 compared to $170 thousand for the first quarter of 2025. Provision for credit losses on funded loans totaled $143 thousand, while provision for credit losses on unfunded loan commitments was a recovery of $120 thousand during the three months ended March 31, 2026. The provision for credit losses on funded loans during the most recent quarter reflected the change in the Company’s loan portfolio mix quarter-over-quarter along with the updated forecasted economic variables utilized in the quantitative portion of the allowance calculation. Recovery of the provision for credit losses on unfunded loan commitments was due to lower amount of available loan commitments at March 31, 2026 as compared to December 31, 2025.

Non-interest income decreased $221 thousand or 43.8% during the first quarter of 2026 compared to the first quarter of 2025. This decrease was primarily attributable to a $149 thousand decrease in insurance commissions, in combination with a $37 thousand decrease in mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan and a $30 thousand decline in gains recorded on sales of the guaranteed portions of the SBA 7(a) loans.

Non-interest expense increased $0.7 million or 8.2% during the first quarter of 2026 compared to the first quarter of 2025 primarily resulting from an increase in salaries and employee benefits and higher other expenses. Salaries and employee benefits increased by $522 thousand, which was mainly related to increases in headcount within the Bank during the preceding twelve months and an annual salary merit increase in combination with lower direct loan origination costs 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 interest income to match the costs incurred with the economic benefit derived from originating a loan. Other expenses increased by $124 thousand mainly due to higher franchise tax and FDIC insurance, due to higher assessment bases, partially offset by lower marketing expense.

For the three months ended March 31, 2026, annualized non-interest expense to average assets was 1.54% compared to 1.50% for the three months ended March 31, 2025. This increase was primarily due to the growth in non-interest expense outpacing the growth in average assets during the period. For the three months ended March 31, 2026, the efficiency ratio declined to 53.1% compared to 56.5% for the three months ended March 31, 2025. The improvement in the efficiency ratio was due to a 15.0% growth in total revenue, which outpaced an 8.2% increase in non-interest expense over the period.

Return on average assets for the quarter ended March 31, 2026 was 1.06% and return on average equity was 9.19% compared to 0.87% and 7.76%, respectively, for the first quarter of 2025.

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 consumers in the Washington, D.C. Metropolitan area. The Bank offers a comprehensive line of sophisticated banking products and services 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 commercial real estate, trade contractors, government contractors, health services, nonprofits, private and charter schools, professional services, property management, community associations, and title and escrow services. Learn more at www.johnmarshallbank.com. Follow the Bank on LinkedIn at: https://www.linkedin.com/company/john-marshall-bank/.

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 shutdowns and 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 purposes only, are not forecasts and may not reflect actual results.