John Marshall Bancorp, Inc.
For the period ended Jun 30, 2025. Filed Aug 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 12, 2025
JMSB$23.20+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001558370-25-007505
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001558370-25-011157
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 149 current paragraphs.
57 unchanged; 37 reworded; 44 added; 5 removed; 1 previous and 11 current paragraphs rearranged.
Tables are not compared: 59 previous and 72 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
Results of Operations – Six Months Ended June 30, 2025 and June 30, 2024
Current report
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 increases in yield on interest-earning assets.
Current report
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. Additional discussion of the provision for credit losses is included below under the headingProvision for Credit Losses.
Current report
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.
Current report
Non-interest expense increased $728 thousand or 4.6% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase in non-interest expense was 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 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 less expensive, more favorable location.
Current report
The ROAA for the six months ended June 30, 2025 and June 30, 2024 was 0.89% and 0.72%, respectively. The ROAE for the six months ended June 30, 2025 and June 30, 2024 was 7.91% and 6.95%, respectively.
Current report
(1)Tax benefit was calculated using the federal statutory tax rate of 21%.
Current report
Net interest income increased $5.2 million or 21.7% on a fully tax-equivalent basis for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase in fully tax-equivalent net interest income was driven by the decrease in the cost of interest-bearing liabilities combined with the increases in yields on interest-earning assets.
Current report
On a fully tax-equivalent basis, the net interest margin was 2.64% for the six months ended June 30, 2025, compared to 2.15% for the six months ended June 30, 2024. The 49 basis points increase in net interest margin was due to a combination of a 38 basis points decrease in the cost of interest-bearing liabilities and a 17 basis points increase in yields in interest-earning assets. 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. Rates declined across all deposit categories, most notably in time deposits, money market accounts and NOW deposit accounts, which declined 18 basis points, 49 basis points and 42 basis points, respectively. Total cost of borrowings declined from 4.99% in the prior year period to 4.55% in the current year period, 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.
Current report
The loan portfolio’s yield for the six months ended June 30, 2025 was 5.41% compared to 5.19% for the six months ended June 30, 2024. The increase of 22 basis points was primarily attributable to an increase in yield on the Company’s variable rate loans as a result of an increase in interest rates subsequent to June 30, 2024 coupled with a higher weighted average yield on loans originated since the first half of 2024.
Current report
The yield on interest-bearing deposits due from banks for the six months ended June 30, 2025 was 4.48% compared to 5.53% for the six months ended June 30, 2024. The decrease of 105 basis points was directly attributable to three fed funds rate cuts totaling 100 basis points, which occurred during the second half of 2024.
Current report
Fully tax-equivalent interest income on loans increased by approximately $3.0 million as a result of an increase in rate and volume. Average loans increased $45.0 million between the six months ended June 30, 2025 and June 30, 2024, which was primarily attributable to origination volume in the investor real estate, construction and development, and residential mortgage loan portfolios subsequent to June 30, 2024.
Current report
Interest income on interest-bearing deposits in other banks decreased by $1.3 million as a result of lower rate and decline in volume. The lower yield was directly attributable to three fed funds rate cuts totaling 100 basis points since June 30, 2024. Average interest-bearing deposits in other banks decreased approximately $24.3 million between the six months ended June 30, 2025 and June 30, 2024, mainly due to funding of new loan originations and lower average balance of borrowings.
Current report
Interest expense decreased by $3.8 million to $26.1 million for the six months ended June 30, 2025 compared to $29.9 million for the six months ended June 30, 2024, primarily due to a decrease in rates on deposits and borrowings. The decrease in rates on deposits was mainly a result of the repricing of the Company’s time deposits maturing subsequent to June 30, 2024 as a result of lower benchmark interest rates. The decrease in rate on borrowings was primarily a result of the Company’s payoff of higher cost Federal Reserve Bank’s Bank Term Funding Program borrowings in September 2024, which were partially replaced with lower cost FHLB advances.
Current report
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 for the six months ended June 30, 2025 that is directly attributable to the funded and unfunded loan portfolios was $583 thousand and $124 thousand, respectively.
Current report
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. See “Asset Quality” below for additional information on the credit quality of the loan portfolio.
Current report
The Company’s recurring sources of non-interest income consist primarily of interchange income, gains on sale of government guaranteed loans, service charges on deposit accounts and insurance commissions. Generally speaking, loan fees are included in interest income on the loan portfolio and not reported as non-interest income.
Current report
The following table summarizes non-interest income for the six months ended June 30, 2025 and June 30, 2024.
Current report
Generally, non-interest expense is composed of all employee expenses and costs associated with operating our facilities, obtaining and retaining customer relationships and providing banking services. The largest component of non-interest expense is salaries and employee benefits. Non-interest expense also includes operational expenses, such as occupancy and equipment expenses, data processing expenses, professional fees, advertising expenses and other general and administrative expenses, including FDIC assessments, and Virginia state franchise taxes.
Current report
Non-interest expense increased $728 thousand or 4.6% during the six months ended June 30, 2025 compared to the same period in 2024. The increase was primarily due to a 592 thousand increase in salaries and employee benefits, as a result of changes in staffing over the preceding period. State franchise taxes increased by $94 thousand due to a higher assessment base, mainly a result of the growth of the Company’s stockholder’s equity during the period. The $111 thousand increase in data processing was primarily due to contractual increases and volume based activity. These increases were partially offset by a decrease in the Company’s occupancy expense, which declined by $85 thousand during the period due to relocating a branch to a less expensive, more favorable location.
Current report
Income tax expense increased $530 thousand or 22.8% to $2.9 million for the six months ended June 30, 2025 compared to $2.3 million for the six months ended June 30, 2024. Our effective tax rate for the six months ended June 30, 2025 stayed relatively unchanged at 22.4% compared to 22.3% for the same period ended June 30, 2024.
Current report
The Company reported net income of $5.1 million for the three months ended June 30, 2025, an increase of $1.2 million or 30.7% when compared to $3.9 million for the three months ended June 30, 2024. Pre-tax, pre-provision earnings (Non-GAAP) was $7.1 million for the three months ended June 30, 2025, representing an increase of $2.4 million or 50.6% when compared to the three months ended June 30, 2024, predominantly driven by the growth in net interest income. Diluted earnings per common share were $0.36 for the three months ended June 30, 2025, compared to diluted earnings per common share of $0.27 for the three months ended June 30, 2024, an increase of 33.3%.
Current report
Net interest income for the three months ended June 30, 2025 increased $2.8 million or 23.5% to $14.9 million compared to $12.1 million for the three months ended June 30, 2024, driven primarily by the lower cost of interest-bearing liabilities coupled with higher yields on interest-earning assets. 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 net interest margin for the second quarter of 2025 was 2.69% as compared to 2.19% for the same period in 2024. 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.
Current report
The Company recorded a $537 thousand provision for credit losses for the three months ended June 30, 2025 compared to a recovery of provision for credit losses of $292 thousand for the three months ended June 30, 2024. Additional discussion of the provision for credit losses is included below under the headingProvision for Credit Losses.
Current report
Non-interest income decreased $48 thousand during the three months ended June 30, 2025 compared to the three months ended June 30, 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 non-qualified deferred compensation plan totaling $147 thousand over the same period.
Current report
Non-interest expense increased $404 thousand or 5.1% during the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to increases in salaries and employee benefits expense and higher, professional fees, partially offset by lower occupancy expense. The increase in salaries and employee benefits expense stemmed from the hiring of additional business development personnel since June 30, 2024. The increase in professional fees was due to the use of external advisors to assist the Company with various regulatory filings during the most recent quarter. A decline in occupancy expense was predominantly related to the relocation of a branch to a lower cost and more favorable location, and lower marketing expense due to more efficient advertising initiatives.
Current report
The ROAA for the three months ended June 30, 2025 and June 30, 2024 was 0.91% and 0.70%, respectively. The ROAE for the three months ended June 30, 2025 and June 30, 2024 was 8.06% and 6.68%, respectively.
Current report
The following table reconciles net income to pre-tax, pre-provision earnings, which is a Non-GAAP measure:
Current report
(1)Pre-tax, pre-provision earnings is calculated by adjusting income before income taxes for provision for (recovery of) credit losses.
Current report
Tax-Equivalent Net Interest Income
Current report
(1) Tax benefit was calculated using the federal statutory tax rate of 21%.
Current report
The yield on interest-bearing deposits due from banks for the three months ended June 30, 2025 was 4.48% compared to 5.53% for the three months ended June 30, 2024. The decrease of 105 basis points was directly attributable to three fed funds rate cuts totaling 100 basis points over the preceding twelve months.
Current report
The cost of interest-bearing liabilities was 3.38% for the three months ended June 30, 2025 compared to 3.81% for the three months ended June 30, 2024. Rates declined across all deposit categories, predominantly within time deposits, money market accounts and NOW accounts, which declined 27 basis points, 51 basis points and 43 basis points, respectively. Total 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.
Current report
Rate/Volume Analysis
Current report
Interest Income
Current report
Interest Expense
Current report
Provision for Credit Losses
Current report
Non-interest Income
Current report
Non-interest income was $507 thousand for the three months ended June 30, 2025 compared to $555 thousand for the same period in the prior year. The $48 thousand decrease in non-interest income 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 non-qualified deferred compensation plan totaling $147 thousand over the same period.
Current report
Non-interest Expense
Showing the first 40 of 44 passages. Open the source sections for the rest.
Removed paragraphs (5)
Previous report
Overview
Previous report
Overview
Previous report
During the quarter ending March 31, 2025, our funded construction and land development loans grew by $8.3 million which resulted in a $277 thousand increase to the reserve. This increase was partially offset by a decrease in our funded commercial loans of $8.4 million which resulted in a decrease of $113 thousand to the reserve.
Previous report
Non-interest expense increased $324 thousand or 4.1% during the first quarter of 2025 compared to the first quarter of 2024 primarily as a result of an increase in salary and employee benefit expense. The $289 thousand or 6.0% increase in salary and employee benefit expense stemmed from the hiring of additional personnel. The Company hired three business development officers during the three months ended March 31, 2025. The Company’s occupancy expense decreased $44 thousand or 9.8% when comparing the three months ended March 31, 2025 to the same period in 2024. The decrease resulted from relocating a branch to a lower cost and more favorable location. Furniture and equipment expenses increased $19 thousand or 6.4% for the three months ended March 31, 2025 versus the comparable quarter a year ago. The increase resulted from investment in and maintenance of technology. Other expenses for the three months ended March 31, 2025 increased $60 thousand or 2.5% when compared to the three months ended March 31, 2024. Increases primarily in data processing and marketing were partially offset by a reduction in professional fees.
Previous report
Income tax expense increased $0.2 million to $1.4 million for the three months ended March 31, 2025 compared to $1.2 million for the three months ended March 31, 2024.
Reworded paragraphs (37)
Previous wording
This discussion and analysis 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. 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 report consist of tax-equivalent net interest income and tax-equivalent net interest margin.
Current wording
This discussion and analysis 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. 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 report consist of tax-equivalent net interest income, tax-equivalent net interest margin, and pre-tax, pre-provision earnings.
Previous wording
As of March 31, 2025, the Company had total consolidated assets of $2.27 billion, total loans net of unearned income of $1.87 billion, total deposits of $1.92 billion and total shareholders’ equity of $253.0 million.
Current wording
As of June 30, 2025, the Company had total consolidated assets of $2.27 billion, total loans net of unearned income of $1.92 billion, total deposits of $1.90 billion and total shareholders’ equity of $253.7 million.
Previous wording
The following table contains selected historical consolidated financial data as of the dates and for the periods shown. The selected balance sheet data as of March 31, 2025 and March 31, 2024 and the selected income statement data for the three months ended March 31, 2025 and March 31, 2024 have been derived from our consolidated financial statements.
Current wording
The following table contains selected historical consolidated financial data as of the dates and for the periods shown. The selected balance sheet data as of June 30, 2025 and June 30, 2024 and the selected income statement data for the three and six months ended June 30, 2025 and June 30, 2024 have been derived from our consolidated financial statements.
Previous wording
The Company reported net income of $4.8 million for the three months ended March 31, 2025, an increase of $0.6 million when compared to the three months ended March 31, 2024. Diluted earnings per share were $0.34 for the three months ended March 31, 2025, compared to diluted earnings per share of $0.30 for the three months ended March 31, 2024.
Current wording
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 six months ended June 30, 2024. Diluted earnings per common share were $0.69 for the six months ended June 30, 2025, compared to diluted earnings per common share of $0.57 for the six months ended June 30, 2024, representing a 21.0% increase.
Previous wording
Non-interest income was $505 thousand for the first quarter of 2025 compared to $818 thousand for the first quarter of 2024. The $313 thousand decrease in non-interest income was primarily attributable to a decrease of $100 thousand due to unfavorable mark-to-market adjustments on investments related to the Company’s nonqualified deferred compensation plan (“NQDC”), a $97 thousand decrease in gains recorded on the sale of the guaranteed portion of SBA 7(a) loans due to decreased sale activity, a $64 thousand decrease in swap fee income and a $39 thousand decrease in insurance commissions.
Current wording
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. These decreases were partially offset by higher mark-to-market valuation adjustments on the Company’s non-qualified deferred compensation plan totaling $47 thousand.
Previous wording
Net interest income increased $2.4 million or 20.0% on a fully tax-equivalent basis for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, driven primarily by the increase in loan yields, reduction in the average balance of maturing deposits and borrowings, and the increase in the average balance of loans.
Current wording
Tax-equivalent net interest income increased $2.8 million or 23.5% for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, driven primarily by the increase in loan yields and lower rates on interest-bearing deposits and borrowings, reduction in the average balance of time deposits and borrowings, and the increase in the average balance of loans.
Previous wording
On a fully tax-equivalent basis, the net interest margin was 2.58% for the three months ended March 31, 2025, compared to 2.11% for the three months ended March 31, 2024. The increase in net interest margin was primarily due to an increase in yields on the Company’s interest-earning assets and reduction in rates on deposits in addition to a reduction of volume of time deposits.
Current wording
On a fully tax-equivalent basis, the net interest margin was 2.70% for the three months ended June 30, 2025, compared to 2.19% for the three months ended June 30, 2024. The 51 basis points increase in net interest margin was primarily due to an 18 basis points increase in yields on the Company’s interest-earning assets and a 41 basis points reduction in rates on interest-bearing deposits, in addition to a reduction of volume of time deposits.
Previous wording
The loan portfolio’s yield for the three months ended March 31, 2025 was 5.39% compared to 5.18% for the three months ended March 31, 2024. The increase of 21 basis points was primarily attributable to an increase in yield on the Company’s commercial real estate portfolio.
Current wording
The loan portfolio’s yield for the three months ended June 30, 2025 was 5.42% compared to 5.20% for the three months ended June 30, 2024. The increase of 22 basis points was primarily attributable to an increase in yield on the Company’s commercial real estate portfolio.
Previous wording
Interest income increased by $0.4 million or 1.4% to $27.3 million on a fully tax-equivalent basis for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven by both an increase in rates and volume on interest earning assets. The increase in rates on interest-earning assets was primarily attributable to the Company’s loan portfolio.
Current wording
Interest income increased by $1.1 million or 3.9% to $27.9 million on a fully tax-equivalent basis for the three months ended June 30, 2025 compared to $26.8 million for the three months ended June 30, 2024, driven by both an increase in rates and volume on interest earning assets. The increases in rates and volume on interest-earning assets was primarily attributable to the Company’s loan portfolio.
Previous wording
Fully tax-equivalent interest income on loans increased by approximately $1.2 million as a result of volume and an increase in rates. Average loans increased $32.3 million between the three months ended March 31, 2025 and the three months ended March 31, 2024, which was primarily attributable to origination volume in the investor real estate and residential loan portfolios subsequent to March 31, 2024.
Current wording
Fully tax-equivalent interest income on loans increased by approximately $1.9 million as a result of volume and an increase in rates. Average loans increased $57.6 million between the three months ended June 30, 2025 and the three months ended June 30, 2024, which was primarily attributable to origination volume in the investor real estate and residential mortgage loan portfolios subsequent to June 30, 2024.
Previous wording
Fully tax-equivalent interest income on investment securities decreased by approximately $196 thousand primarily as a result of a decrease in volume. Average investment securities decreased approximately $39.3 million between the three months ended March 31, 2025 and March 31, 2024 primarily due to maturities and amortization.
Current wording
Fully tax-equivalent interest income on investment securities decreased by approximately $86 thousand primarily as a result of a decrease in volume. Average investment securities decreased approximately $26.8 million between the three months ended June 30, 2025 and June 30, 2024 primarily due to maturities and amortization.
Previous wording
Interest income on interest-bearing deposits in other banks decreased by $602 thousand primarily as a result of a decrease in rates, coupled with a decrease in volume. Average interest-bearing deposits in other banks decreased approximately $19.9 million between the three months ended March 31, 2025 and March 31, 2024.
Current wording
Interest income on interest-bearing deposits in other banks decreased by $722 thousand primarily as a result of a decrease in rates, coupled with a decrease in volume. Average interest-bearing deposits in other banks decreased approximately $28.7 million between the three months ended June 30, 2025 and June 30, 2024.
Previous wording
Interest expense decreased by $2.0 million to $13.2 million for the three months ended March 31, 2025 compared to $15.2 million for the three months ended March 31, 2024, primarily due to a decrease in rates on deposits and decrease in volume on borrowings. The decrease in rates on deposits was primarily a result of the repricing of the Company’s deposits accounts in conjunction with the decrease in benchmark interest rates that took place starting in September of 2024.
Current wording
Interest expense decreased by $1.8 million to $12.9 million for the three months ended June 30, 2025 compared to $14.7 million for the three months ended June 30, 2024, primarily due to a decrease in rates on deposits and decrease in volume on borrowings. The decrease in rates on deposits was primarily a result of the repricing of the Company’s deposits accounts in conjunction with the decrease in benchmark interest rates that took place starting in September of 2024.
Previous wording
The Company recorded a $170 thousand provision for credit losses for the first quarter of 2025 compared to a recovery of provision for credit losses of $776 thousand for the first quarter of 2024. The provision for credit losses for the current period that is directly attributable to the funded and unfunded loan portfolios was $111 thousand and $59 thousand, respectively.
Current wording
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 for the second quarter of 2025 that is directly attributable to the funded and unfunded loan portfolios was $472 thousand and $65 thousand, respectively.
Previous wording
The provision for credit losses during the three months ended March 31, 2025 was primarily a result of changes in the Company’s loss driver analysis and assumptions, changes in the composition of the loan portfolio, and considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.
Current wording
The provision for credit losses during the three months ended June 30, 2025 was directly attributable to the growth in the Company’s loan portfolio quarter-over-quarter, changes in the composition of the loan portfolio, and considerations of qualitative factors.
Previous wording
The Company’s total assets increased $37.5 million or 1.7% to $2.27 billion at March 31, 2025 compared to $2.23 billion at December 31, 2024. The increase in total assets is primarily attributable to increases in interest-bearing deposits in banks of $42.0 million, partially offset by a decrease in investments of $5.8 million.
Current wording
The Company’s total assets increased $33.0 million or 1.5% to $2.27 billion at June 30, 2025 compared to $2.23 billion at December 31, 2024. The increase in total assets was predominantly attributable to an increase in the Company’s loan portfolio, which grew by $44.7 million or 2.4% during the year, partially offset by decreases in interest-bearing deposits with banks and investment securities of $9.0 million and $6.2 million, respectively.
Previous wording
The Company’s total liabilities increased $31.1 million or 1.6% to $2.02 billion at March 31, 2025 compared to $1.99 billion at December 31, 2024. The increase in total liabilities was primarily attributable to a net increase in deposits of $29.8 million.
Current wording
The Company’s total liabilities increased $25.9 million or 1.3% to $2.01 billion at June 30, 2025 compared to $1.99 billion at December 31, 2024. The increase in total liabilities was mainly due to the Company borrowing an additional $16.5 million of federal funds purchased at June 30, 2025.
Previous wording
Shareholders’ equity increased $6.3 million or 2.6% to $253.0 million at March 31, 2025 compared to $246.6 million at December 31, 2024. The increase in shareholders’ equity was primarily attributable to an increase in net income and a decrease in accumulated other comprehensive loss due to lower interest rates during the three months ended March 31, 2025. Book value per share was $17.72 as of March 31, 2025 compared to $17.28 as of December 31, 2024.
Current wording
Shareholders’ equity increased $7.1 million or 2.9% to $253.7 million at June 30, 2025 compared to $246.6 million at December 31, 2024. The increase in shareholders’ equity was primarily attributable to net income earned during the current year coupled with a decrease in accumulated other comprehensive loss due to lower market interest rates during the six months ended June 30, 2025. Book value per share was $17.83 as of June 30, 2025 compared to $17.28 as of December 31, 2024, an increase of 3.2%. During the six months ended June 30, 2025, the Company repurchased 79,443 shares of its common stock at an average price of $17.05. The aggregate repurchase activity was accretive to the Company’s book value per share.
Previous wording
The Company maintains a primarily fixed income investment securities portfolio that had a total carrying value of $215.6 million at March 31, 2025 and $222.3 million at December 31, 2024. The investment portfolio provides liquidity, interest income, credit risk diversification, means to manage rate sensitivity and collateral for secured public funds and secured credit lines. Investment securities are classified as available-for-sale or held-to-maturity based on management’s investment strategy and management’s assessment of the intent and ability to hold the securities until maturity. Investment securities that we may sell prior to maturity in response to changes in management’s investment strategy, liquidity needs, interest rate risk profile or for other reasons are classified as available-for-sale. The Company also had restricted stock and equity securities within its investment securities portfolio with total carrying values of $7.6 million and $2.9 million, respectively, as of March 31, 2025 and $7.6 million and $2.8 million, respectively, as of December 31, 2024.
Current wording
The Company maintains a primarily fixed income investment securities portfolio that had a total carrying value of $215.8 million at June 30, 2025 and $222.3 million at December 31, 2024. The investment portfolio provides liquidity, interest income, credit risk diversification, means to manage interest rate sensitivity and collateral for secured public funds and secured credit lines. Investment securities are classified as available-for-sale or held-to-maturity based on management’s investment strategy and management’s assessment of the intent and ability to hold the securities until maturity. Investment securities that we may sell prior to maturity in response to changes in management’s investment strategy, liquidity needs, interest rate risk profile or for other reasons are classified as available-for-sale. The Company also had restricted stock and equity securities within its investment securities portfolio with total carrying values of $7.6 million and $3.1 million, respectively, as of June 30, 2025 and $7.6 million and $2.8 million, respectively, as of December 31, 2024.
Previous wording
The Company purchased $3.6 million of investment securities during the three months ended March 31, 2025, which were comprised of $2.6 million of agency mortgage-backed securities and $1.0 million of agency collateralized mortgage obligation securities. The Company did not sell any fixed income investment securities during the three months ended March 31, 2025. The Company had $12.1 million in maturities and principal repayments on securities during the three months ended March 31, 2025, which was comprised of $4.8 million of U.S. Treasuries, $4.3 million of U.S. agency mortgage-backed securities, $2.0 million of U.S. government and federal agencies securities and $1.0 million of U.S. agency collateralized mortgage obligation securities.
Current wording
The Company purchased $14.0 million of investment securities during the six months ended June 30, 2025, which were comprised of $13.0 million of agency mortgage-backed securities and $1.0 million of agency collateralized mortgage obligation securities. The Company did not sell any fixed income investment securities during the six months ended June 30, 2025. The Company had $23.3 million in maturities and principal repayments on securities during the six months ended June 30, 2025, which were comprised of $9.1 million of U.S. agency mortgage-backed securities, $7.8 million of U.S. Treasuries, $4.0 million of U.S. government and federal agencies securities and $2.5 million of U.S. agency collateralized mortgage obligation securities.
Previous wording
In the prevailing rate environments as of March 31, 2025 and December 31, 2024, the Company’s investment portfolio had an estimated weighted average remaining life of approximately 4.2 years and 4.2 years, respectively. The available-for-sale investment portfolio had an estimated weighted average remaining life of approximately 3.1 years and 3.1 years as of March 31, 2025 and December 31, 2024, respectively. The held-to-maturity investment portfolio had an estimated weighted average remaining life of approximately 5.8 years and 6.0 years as of March 31, 2025 and December 31, 2024, respectively.
Current wording
In the prevailing rate environments as of June 30, 2025 and December 31, 2024, the Company’s investment portfolio had an estimated weighted average remaining life of approximately 4.1 years and 4.2 years, respectively. The available-for-sale investment portfolio had an estimated weighted average remaining life of approximately 3.1 years at both June 30, 2025 and December 31, 2024. The held-to-maturity investment portfolio had an estimated weighted average remaining life of approximately 5.6 years and 6.0 years as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
Gross loans, net of unearned income, decreased $1.7 million to $1.87 billion as of March 31, 2025 compared to $1.87 billion as of December 31, 2024. The Company continues to maintain its disciplined underwriting standards while prudently pursuing loan growth opportunities that provide acceptable risk-adjusted returns.
Current wording
Gross loans, net of unearned income, increased $44.7 million to $1.92 billion as of June 30, 2025 compared to $1.87 billion as of December 31, 2024. The increase in loans from December 31, 2024, was primarily attributable to growth in investor real estate loans, construction and development loans, and residential mortgage loans. The Company continues to maintain its disciplined underwriting standards while prudently pursuing loan growth opportunities that provide acceptable risk-adjusted returns.
Previous wording
The Company’s asset quality remained strong through the first quarter of 2025. The Company did not have any nonperforming assets, which includes nonperforming loans, OREO, or loans classified as substandard as of March 31, 2025. The Company had one loan that was 90 days past due and still accruing interest as of December 31, 2024. The loan paid off, in full, on January 7, 2025. As a result, the Company did not have any nonperforming loans, which consists of loans that are 90 days or more past due or loans placed on nonaccrual as of March 31, 2025.
Current wording
The Company’s asset quality remained strong through the first half of 2025. The Company did not have any nonperforming assets, which includes nonperforming loans, OREO, or loans classified as substandard as of June 30, 2025. The Company had one loan that was 90 days past due and still accruing interest as of December 31, 2024. The loan paid off, in full, on January 7, 2025. As a result, the Company did not have any nonperforming loans, which consists of loans that are 90 days or more past due or loans placed on nonaccrual as of June 30, 2025.
Previous wording
The Company did not have any nonaccrual loans as of March 31, 2025 or December 31, 2024 nor were there any loans placed on nonaccrual during those periods. A loan is placed on nonaccrual status when (i) the Company is advised by the borrower that scheduled principal or interest payments cannot be met, (ii) when management’s best judgment indicates that payment in full of principal and interest can no longer be expected, or (iii) when any such loan or obligation becomes delinquent for 90 days, unless it is both well-secured and in the process of collection. As a result, the Company did not have any interest income that would have been recognized on nonaccrual loans for the three months ended March 31, 2025 or the three months ended March 31, 2024.
Current wording
The Company did not have any nonaccrual loans as of June 30, 2025 or December 31, 2024 nor were there any loans placed on nonaccrual during those periods. A loan is placed on nonaccrual status when (i) the Company is advised by the borrower that scheduled principal or interest payments cannot be met, (ii) when management’s best judgment indicates that payment in full of principal and interest can no longer be expected, or (iii) when any such loan or obligation becomes delinquent for 90 days, unless it is both well-secured and in the process of collection. As a result, the Company did not have any interest income that would have been recognized on nonaccrual loans for the three or six months ended June 30, 2025 or the three or six months ended June 30, 2024.
Previous wording
The Company recorded no net charge-offs or recoveries during the three months ended March 31, 2025 compared to no net charge-offs and a $1 thousand recovery during the three months ended March 31, 2024. At March 31, 2025, the allowance for loan credit losses was $18.8 million or 1.01% of outstanding loans, net of unearned income, compared to $18.7 million or 1.00% of outstanding loans, net of unearned income, at December 31, 2024. The increase in the allowance as a percentage of outstanding loans, net of unearned income, was primarily a result of changes in the composition of the loan portfolio and considerations of qualitative factors combined with the continued strong credit performance of our loan portfolio segments.
Current wording
The Company recorded no net charge-offs or recoveries during the three or six months ended June 30, 2025 and June 30, 2024. 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 $18.4 million or 1.01% of outstanding loans, net of unearned income, at December 31, 2024. The increase in the allowance as a percentage of outstanding loans, net of unearned income, was primarily a result of the growth of the Company’s loan portfolio since prior year-end along with changes in the composition of the loan portfolio, updates to the economic forecast and considerations of qualitative factors.
Previous wording
The following table summarizes the Company’s loan loss experience by loan portfolio for the three months ended March 31, 2025 and March 31, 2024.
Current wording
The following table summarizes the Company’s loan loss experience by loan portfolio for the three and six months ended June 30, 2025 and June 30, 2024.
Previous wording
Total deposits increased $29.8 million or 1.6% to $1.92 billion as of March 31, 2025 compared to $1.89 billion as of December 31, 2024.
Current wording
Total deposits increased $4.5 million or 0.2% to $1.90 billion as of June 30, 2025 compared to $1.89 billion as of December 31, 2024.
Previous wording
Non-interest bearing demand deposits increased $4.5 million or 1.0% to $437.8 million as of March 31, 2025 compared to $433.3 million at December 31, 2024. Non-interest bearing demand deposits represented 22.8% and 22.9% of total deposits at March 31, 2025 and December 31, 2024, respectively.
Current wording
Non-interest bearing demand deposits increased $5.3 million or 1.2% to $438.6 million as of June 30, 2025 compared to $433.3 million at December 31, 2024. Non-interest bearing demand deposits represented 23.1% and 22.9% of total deposits at June 30, 2025 and December 31, 2024, respectively.
Previous wording
Interest-bearing deposits, which include NOW accounts, regular savings accounts, money market accounts, and time deposits, increased $25.2 million or 1.7% to $1.48 billion as of March 31, 2025 compared to $1.46 billion as of December 31, 2024. Interest-bearing deposits represented 77.2% and 77.1% of total deposits at March 31, 2025 and December 31, 2024, respectively.
Current wording
Interest-bearing deposits, which include NOW accounts, regular savings accounts, money market accounts, and time deposits, were relatively unchanged at $1.46 billion as of June 30, 2025 compared to December 31, 2024. Interest-bearing deposits represented 76.9% and 77.1% of total deposits at June 30, 2025 and December 31, 2024, respectively.
Previous wording
The Company focuses on funding asset growth with deposit accounts, with an emphasis on core deposit growth, as its primary source of deposits. Core deposits consist of checking accounts, NOW accounts, money market accounts, regular savings accounts, time deposits, reciprocal IntraFi Demand® deposits, IntraFi Money Market® deposits and IntraFi CD® deposits. Core deposits totaled $1.63 billion or 84.8% of total deposits and $1.62 billion or 85.4% of total deposits at March 31, 2025 and December 31, 2024, respectively.
Current wording
The Company focuses on funding asset growth with deposit accounts, with an emphasis on core deposit growth, as its primary source of deposits. Core deposits consist of checking accounts, NOW accounts, money market accounts, regular savings accounts, time deposits, reciprocal IntraFi Demand® deposits, reciprocal IntraFi Money Market® deposits and reciprocal IntraFi CD® deposits. Core deposits totaled $1.59 billion or 84.1% of total deposits and $1.62 billion or 85.4% of total deposits at June 30, 2025 and December 31, 2024, respectively.
Previous wording
The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was estimated at $819.1 million at March 31, 2025 and $816.7 million at December 31, 2024. Included in these amounts were $167.8 million and $157.4 million of public fund deposits that are collateralized as of March 31, 2025 and December 31, 2024, respectively. Deposits that were not insured or not collateralized represented 37% and 35% of total deposits, respectively, as of March 31, 2025 and December 31, 2024.
Current wording
The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was estimated at $815.5 million at June 30, 2025 and $816.7 million at December 31, 2024. Included in these amounts were $159.5 million and $157.4 million of public fund deposits that are collateralized as of June 30, 2025 and December 31, 2024, respectively. Deposits that were not insured or not collateralized represented 35% of total deposits at both June 30, 2025 and December 31, 2024.
Previous wording
Shareholders’ equity increased $6.3 million or 2.6% to $253.0 million at March 31, 2025 compared to $246.6 million at December 31, 2024. The increase in shareholders’ equity was primarily attributable to an increase in net income and a decrease in accumulated other comprehensive loss due to lower interest rates during the three months ended March 31, 2025. Book value per share was $17.72 as of March 31, 2025 compared to $17.28 as of December 31, 2024.
Current wording
Shareholders’ equity increased $7.1 million or 2.9% to $253.7 million at June 30, 2025 compared to $246.6 million at December 31, 2024. During the six months ended June 30, 2025, the increase in shareholders’ equity was primarily attributable to a $5.6 million increase in retained earnings, a result of the year-to-date net income exceeding the amount of dividends paid, coupled with a $2.2 million decrease in accumulated other comprehensive loss, due to lower market interest rates. Book value per share was $17.83 as of June 30, 2025 compared to $17.28 as of December 31, 2024.
Previous wording
In July of 2024, the Company’s Board of Directors authorized the extension of the Company’s stock repurchase program that was originally adopted in August of 2021. Under the stock repurchase program, the Company may repurchase up to 700,000 shares of its outstanding common stock, or 5.0% of outstanding shares as of September 30, 2024. The stock repurchase program will expire on August 31, 2025, or earlier if all the authorized shares have been repurchased. The Company repurchased 2,639 shares of its outstanding common stock under the program during the three months ended March 31, 2025.
Current wording
In July of 2024, the Company’s Board of Directors authorized the extension of the Company’s stock repurchase program that was originally adopted in August of 2021. Under the stock repurchase program, the Company may repurchase up to 700,000 shares of its outstanding common stock, or 5.0% of outstanding shares as of September 30, 2024. The stock repurchase program will expire on August 31, 2025, or earlier if all the authorized shares have been repurchased. The Company repurchased 76,804 and 79,443 shares of its outstanding common stock under the program during the three and six months ended June 30, 2025, respectively.
Previous wording
The Company’s principal source of liquidity and funding is its deposit base. The level of deposits necessary to support the Company’s lending and investment activities is determined through monitoring loan demand. In addition to the liquidity provided by balance sheet cash flows, the Company supplements its liquidity with additional sources such as secured borrowing credit lines with the FHLB and the Reserve Bank. Specifically, the Company has pledged a portion of its commercial real estate and residential real estate loan portfolios to the FHLB and the Reserve Bank. Based on collateral pledged as of March 31, 2025, the total FHLB available borrowing capacity was $401.0 million. Additional borrowing capacity with the Reserve Bank was approximately $107.1 million as of March 31, 2025.
Current wording
In addition to the liquidity provided by balance sheet cash flows, the Company supplements its liquidity with additional sources such as secured borrowing credit lines with the FHLB and the Federal Reserve Bank. Specifically, the Company has pledged a portion of its commercial real estate and residential real estate loan portfolios to the FHLB and commercial loans to the Federal Reserve Bank. Based on collateral pledged as of June 30, 2025, the total FHLB available borrowing capacity was $416.2 million. Additional borrowing capacity with the Federal Reserve Bank was approximately $113.9 million as of June 30, 2025.
Previous wording
On September 3, 2024, the Company took out three fixed interest rate advances with terms of 18, 24, and 36 months. The interest rates on the advances range from 3.92% to 4.15%. At March 31, 2025, the Company had three outstanding FHLB advances totaling $56 million.
Current wording
On September 3, 2024, the Company took out three fixed interest rate FHLB advances with terms of 18, 24, and 36 months. The interest rates on the advances range from 3.91% to 4.14%. At June 30, 2025, the Company had three outstanding FHLB advances totaling $56.0 million.
Previous wording
Total liquidity, defined as cash and cash equivalents, unencumbered securities at fair value, and available secured borrowing capacity, was $786.9 million at March 31, 2025 compared to $727.3 million at December 31, 2024.
Current wording
Total liquidity, defined as cash and cash equivalents, unencumbered securities at fair value, and available secured borrowing capacity, was $755.6 million at June 30, 2025 compared to $727.3 million at December 31, 2024.
Previous wording
In addition to available secured borrowing capacity, the Company had available federal funds lines with correspondent banks of $110.0 million at March 31, 2025.
Current wording
In addition to available secured borrowing capacity, the Company had available federal funds lines with correspondent banks of $93.5 million at June 30, 2025.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
The following table presents the average balance for each principal balance sheet category, and the amount of interest income or expense associated with that category, as well as corresponding average yields earned and rates paid for the six months ended June 30, 2025 and June 30, 2024.
Current report — wording carried from elsewhere
(2)The Company did not have any loans on nonaccrual as of June 30, 2025 or June 30, 2024.
Current report — wording carried from elsewhere
Interest income increased by $1.4 million or 2.7% to $55.2 million on a fully tax-equivalent basis for the six months ended June 30, 2025 compared to $53.8 million for the six months ended June 30, 2024, driven by both an increase in rates and volume on interest-earning assets. The increase in rate and volume on interest-earning assets was primarily attributable to the Company’s loan portfolio.
Current report — wording carried from elsewhere
Fully tax-equivalent interest income on investment securities decreased by approximately $283 thousand, primarily as a result of a decrease in volume. Average investment securities decreased approximately $33.0 million between the six months ended June 30, 2025 and June 30, 2024, primarily due to maturities and the amortization of the portfolio.
Current report — wording carried from elsewhere
The following table summarizes non-interest expense for the six months ended June 30, 2025 and June 30, 2024.
Current report — wording carried from elsewhere
Net Interest Income and Net Interest Margin
Current report — wording carried from elsewhere
Average Balance Sheets and Interest Rates on Interest-Earning Assets and Interest-Bearing Liabilities
Current report — wording carried from elsewhere
Tax-equivalent net interest margin as presented above is calculated by dividing tax-equivalent net interest income by total average earning assets. Net interest income, on a tax-equivalent basis, is a financial measure that the Company believes provides a more accurate picture of the interest margin for comparative purposes. Tax-equivalent net interest income is calculated by adding the tax benefit on certain securities and loans, whose interest is tax-exempt, to total interest income then subtracting total interest expense. The following table, “Tax-Equivalent Net Interest Income,” reconciles net interest income to tax-equivalent net interest income, which is a non-GAAP measure.
Current report — wording carried from elsewhere
The following table presents the effects of changing rates and volumes on tax-equivalent net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated to volume.
Current report — wording carried from elsewhere
The following table sets forth the average balances of deposits and the average interest rates paid for the six months ended June 30, 2025 and June 30, 2024.
Current report — wording carried from elsewhere
The Company’s principal source of liquidity and funding is its deposit base. The level of deposits necessary to support the Company’s lending and investment activities is determined through monitoring loan demand.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table summarizes the contractual maturities of the loans as of March 31, 2025 by loan type. Maturities are based on the final contractual payment date, and do not reflect the effect of scheduled principal repayments, prepayments, or early redemptions that may occur. The table also summarizes the fixed and floating rate composition of loans held for investment for contractual maturities greater than one year.