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JM

John Marshall Bancorp, Inc. (JMSB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered accelerating earnings and margin expansion: Net income rose 27.6% YoY to $5.4M and diluted EPS to $0.38, with GAAP net interest margin at 2.72% (tax‑equivalent 2.73%) and a pristine credit profile .
  • Against consensus, EPS modestly beat (+$0.01), and “Revenue” tracked S&P’s bank revenue construct; quarter also showed sequential EPS growth vs Q2 ($0.36) and Q1 ($0.34) [GetEstimates]*.
  • Core deposit growth and lower wholesale funding propelled NIM and net interest income; deposits +$71.9M QoQ while wholesale sources −$16.5M, improving funding mix and cost of funds (3.37%) .
  • Management highlighted robust loan commitments, favorable rate path tailwinds, and optionality for organic growth and potential M&A given capital and liquidity strength .
  • Operational investments (headcount, incentives) increased non‑interest expense, but efficiency ratio improved to 55.6% as revenue growth outpaced costs; book value/share climbed to $18.27 .

What Went Well and What Went Wrong

What Went Well

  • Earnings acceleration: Net income $5.4M (+27.6% YoY) and EPS $0.38 (+26.7% YoY); net interest income +18.6% YoY to $15.6M as margin expanded for the sixth consecutive quarter .
  • Funding mix and deposits: Total deposits +$71.9M QoQ (15% annualized), wholesale funding −$16.5M QoQ; cost of interest‑bearing liabilities declined to 3.37% vs 3.86% YoY .
  • Asset quality and capital: No loans >30 days past due, no non‑accruals or OREO; risk‑based ratios well above well‑capitalized thresholds (Total RBC 16.6%); book value/share up to $18.27 .

Management quote:

  • “We believe that additional…rate reductions and a continuing normalization of the yield curve could enhance our performance trend by increasing loan demand, lowering the cost of funds and further improving net interest margin and profitability.” — Chris Bergstrom, CEO .

What Went Wrong

  • Non‑interest expense: +12.5% YoY driven by salaries/benefits (+16.3%) and other expenses (+9.3%), reflecting growth investments and performance‑linked incentives (marketing, taxes) .
  • SBA gains softness: Lower sale activity reduced gains on sales of guaranteed SBA 7(a) loans by $54K YoY in Q3; YTD non‑interest income down 16.3% .
  • Securities runoff and balance sheet size: Investment securities continued to decline YoY due to amortization/maturities, dampening securities income (taxable securities interest −8.3% YoY in Q3) .

Financial Results

Quarterly performance vs prior periods

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Diluted EPS ($)$0.30 $0.34 $0.36 $0.38
Net Income ($MM)$4.235 $4.810 $5.103 $5.404
Net Interest Income ($MM)$13.156 $14.097 $14.926 $15.600
Non‑interest Income ($MM)$0.617 $0.505 $0.507 $0.653
Efficiency Ratio (%)58.3% 56.5% 53.9% 55.6%
Net Interest Margin (GAAP, %)2.30% 2.58% 2.69% 2.72%

Results vs Wall Street consensus (S&P Global)

MetricQ2 2025Q3 2025
EPS — Consensus$0.34*$0.37*
EPS — Actual$0.36 $0.38
EPS — Beat/(Miss)+$0.02+$0.01
Revenue — Consensus ($MM)$15.114*$15.882*
Revenue — Actual ($MM)$14.896*$15.897*
Revenue — Beat/(Miss) ($MM)(0.218)+0.015

Values marked with * retrieved from S&P Global (Capital IQ) via GetEstimates.

Segment/portfolio breakdown (period-end balances)

Loans ($000)Q2 2025Q3 2025
Commercial business43,158 46,486
Commercial owner‑occupied RE320,061 327,269
Investor real estate777,591 770,405
Construction & development186,409 193,444
Multi‑family94,415 93,477
Residential mortgage489,522 501,104
Total loans1,912,278 1,933,338

KPIs and balance sheet trends

KPIQ2 2025Q3 2025
Total Deposits ($000)1,896,893 1,968,828
Core Customer Funding ($000)1,594,682 1,666,617
Wholesale Funding ($000)374,711 358,211
Cost of Interest‑bearing Liabilities (%)3.38% 3.37%
Yield on Interest‑earning Assets (%)5.03% 5.06%
ROA (annualized, %)0.91% 0.94%
ROE (annualized, %)8.06% 8.31%
Asset Quality — NPLs/Total Loans— (none) — (none)
Allowance / Loans (%)1.01% 1.02%
Book Value/Share ($)17.83 18.27

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS, Revenue, NIM, OpEx, OI&E, Tax rateFY/Q4 2025None formalNone formalMaintained (no formal guidance provided)
Dividend per share2025 annual$0.25 (2024)$0.30 declared Apr 22, 2025; paid Jul 7, 2025Raised (20% YoY)

Note: Management provided directional commentary (rate cuts/yield curve normalization as potential tailwinds) but no numeric ranges .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available after searching company/aggregators; themes below reflect prepared remarks/press releases.

TopicPrevious Mentions (Q1, Q2 2025)Current Period (Q3 2025)Trend
Net interest margin expansionNIM increased to 2.58% in Q1; 2.70% in Q2 with 12 bps QoQ expansion Continued expansion to 2.73% tax‑equivalent; sixth consecutive quarter Improving
Loan commitments/pipeline$96.5M Q1 commitments; $135.5M Q2 (highest since Q4’22) YTD new commitments $327.3M (+22.4% YoY), strongest since 2022 Accelerating
Funding mix and core depositsFocus on core funding; reduced wholesale sources Q1/Q2 Deposits +$71.9M QoQ; wholesale −$16.5M QoQ Improving
Asset qualityNo past dues/non‑accrual/OREO through Q1/Q2 Pristine; no past dues/non‑accrual/OREO; no substandard loans Stable, strong
Rate outlook/yield curveQ1 noted macro/trade/tariff headwinds; cautious optimism Expected rate cuts and curve normalization seen as tailwinds for demand and NIM Turning favorable
Operating investmentsHires and BD officers raised salaries/benefits Q1/Q2 Incentive comp and staffing drove OpEx; efficiency improved on higher revenue Investment continues

Management Commentary

  • “Our year‑to‑date gross loan production is 34% ahead of last year… rate reductions and normalization of the yield curve could… further improving net interest margin and profitability… increase earnings 28% this quarter… focus on organic growth, consider M&A” — Chris Bergstrom, CEO .
  • “Loan balance growth… $135.5M in new commitments… indicates additional potential loan and net interest income growth… we have the asset quality, capital and liquidity to support increased growth and returns.” — Q2 release .
  • “Margin expanded, earnings increased, and commitments were prudently underwritten… strongest first quarter commitments since 2022.” — Q1 release .

Q&A Highlights

No Q3 2025 conference call transcript found; Q&A details not available after document and internet searches .

Estimates Context

  • EPS beat: Q3 2025 EPS $0.38 vs $0.37 consensus (+$0.01); Q2 2025 EPS $0.36 vs $0.34 (+$0.02)*.
  • Revenue: Q3 2025 “Revenue” $15.897M vs $15.882M consensus (+$0.015M); Q2 2025 $14.896M vs $15.114M consensus (−$0.218M)*.
  • FY 2025 EPS consensus $1.47; target price consensus $23 (single estimate coverage)*.

Values marked with * retrieved from S&P Global (Capital IQ) via GetEstimates.

Key Takeaways for Investors

  • Funding tailwinds: Core deposits grew and wholesale funding declined, lowering cost of funds and supporting continued NIM expansion — a catalyst for bank NII/EPS momentum .
  • Earnings trajectory: Sequential EPS growth (Q1→Q2→Q3) and YoY net income +27.6% suggest operating leverage despite higher OpEx; efficiency ratio improved to 55.6% .
  • Immaculate credit: Zero past dues/non‑accrual/OREO provides significant downside protection to provisions; allowance coverage at ~1.02% of loans .
  • Balance sheet optionality: Strong capital and liquidity (Total RBC 16.6%; liquidity $826.7M) enable organic growth, opportunistic M&A, and buybacks/dividends .
  • Deposit strategy execution: New SVP of Deposit Services hired mid‑Q3 to drive core deposit growth — supports margin trajectory and funding durability .
  • Macro sensitivity: Management sees potential Fed cuts and curve normalization as accelerants to loan demand/NIM; monitor rate path for upside vs downside scenarios .
  • Trading setup: Modest beat on EPS and visible NIM expansion could support near‑term sentiment; watch next quarter’s loan funding vs commitments and deposit mix shifts for confirmation [GetEstimates]*.

Values marked with * retrieved from S&P Global (Capital IQ) via GetEstimates.