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| Part I |
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| Item 1. | Business | 4 |
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| Item 1A. | Risk Factors | 24 |
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| Item 1B. | Unresolved Staff Comments | 41 |
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| Item 1C. | Cybersecurity | 41 |
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| Item 2. | Properties | 43 |
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| Item 3. | Legal Proceedings | 44 |
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| Item 4. | Mine Safety Disclosures | 44 |
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| Part II |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 44 |
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| Item 6. | [Reserved] | 45 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 45 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 64 |
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| Item 8. | Financial Statements and Supplementary Data | 64 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 108 |
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| Item 9A. | Controls and Procedures | 108 |
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| Item 9B. | Other Information | 108 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 109 |
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| Part III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 109 |
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| Item 11. | Executive Compensation | 109 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 109 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 109 |
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| Item 14. | Principal Accountant Fees and Services | 110 |
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| Part IV |
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| Item 15. | Exhibits and Financial Statement Schedules | 110 |
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| Signatures | 112 | |
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i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, this Form 10-K of John Marshall Bancorp, Inc. (the “Company”) 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. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. These forward-looking statements are based on our beliefs and assumptions and on the information available to us at the time that these disclosures were prepared, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from any future results expressed or implied by such forward-looking statements. Although we believe the expectations reflected in such forward-looking statements are reasonable, we can give no assurance such expectations will prove to have been correct. Should any known or unknown risks and uncertainties develop into actual events, those developments could have material adverse effects on our business, financial condition and results of operations. Factors that could have an adverse effect on the operations of the Company and its wholly-owned subsidiary, John Marshall Bank (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 (the “Federal Reserve”); |
| • | 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 |
These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We do not undertake, and specifically disclaim 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. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary note.
Part I
