John Marshall Bancorp, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income increased 39.5% year-over-year to $7.5 million for the quarter ended September 30, 2026, compared to $5.4 million in the prior year quarter; diluted earnings per share rose to $0.53 from $0.38.
• Annualized return on average assets (ROAA) improved to 1.23% from 0.94%, and annualized return on average equity (ROAE) increased to 10.78% from 8.31%.
• Net interest income grew 14.0% year-over-year to $17.8 million, driven by higher yields and average balances on loans and securities.
• Net interest margin expanded 19 basis points to 2.91% for the quarter, up from 2.72% in the prior year period.
• Total revenue increased 11.1% year-over-year, while non-interest expense decreased 3.9% to $8.7 million.
• The efficiency ratio improved to 48.1% from 55.6% year-over-year; core efficiency ratio (Non-GAAP) was 46.2%.
• A provision recovery of $318 thousand was recorded for the quarter, compared to a $356 thousand expense in the prior year.
• Total assets reached $2.44 billion at September 30, 2026, up 4.8% from $2.32 billion a year ago.
• Total deposits increased 4.8% year-over-year to $2.06 billion, with core deposits growing 19.8% annualized in the quarter.
• Book value per share increased 7.5% to $19.64, up from $18.27 in the prior year.
• Shareholders' equity grew 6.7% year-over-year to $277.1 million.

Guidance and Future Outlook:

• The pending merger with Eagle Financial Services, Inc. is expected to close in the first quarter of 2027, subject to regulatory and shareholder approvals.
• The combined entity is projected to hold approximately $4.3 billion in assets and operate 23 banking offices.
• Management expressed confidence in the balance sheet soundness and outlook, positioning the company to grow the balance sheet, profits, and shareholder value.

Business Segments and Product Lines:

• Loan growth of 3.8% year-over-year to $2.01 billion was primarily driven by residential mortgage loans, investor real estate loans, and construction & development loans.
• Commercial real estate loans comprised 54.2% of the loan portfolio, while residential mortgage loans accounted for 27.0%.
• Fixed income securities portfolio increased to a carrying value of $219.2 million, with 96.0% carrying an implied U.S. government guarantee.
• The company sold its Bearing Insurance investment unit in the second quarter of 2026, resulting in an $835 thousand gain recognized in the nine-month period.

Market and Competitive Landscape:

• The company operates in the Washington, D.C. metropolitan area with eight full-service branches in Virginia, Maryland, and Washington, D.C.
• The company serves niche industries including commercial real estate, trade contractors, government contractors, health services, nonprofits, and professional services.
• Asset quality remains exceptional with no charge-offs recorded in the third quarter of 2026 and no other real estate owned assets.
• Non-accrual loans totaled $267 thousand (one SBA 7(a) loan), which is fully guaranteed by the SBA.

Risks and Challenges:

• Forward-looking statements regarding the merger with Eagle are subject to risks including the failure to obtain regulatory or shareholder approvals, integration difficulties, and potential delays.
• Risks include concentration of business in the Washington, D.C. metropolitan area and potential impacts from changes in the federal workforce or government spending.
• Potential impacts from interest rate volatility, economic conditions, and changes in monetary or fiscal policies are noted.
• Operational risks include potential cyber threats, data privacy issues, and the ability to retain key employees or maintain customer relationships during the merger process.

Management Commentary and Tone:

• Chris Bergstrom, President and CEO, highlighted the ninth consecutive quarter of net income growth and a 23% increase in core net income and core earnings per share over the second quarter of 2026.
• Management noted that core returns on assets and equity reached their highest levels in nearly four years.
• The tone was confident regarding the company's capital position, asset quality, and ability to execute growth strategies.

Other Key Points:

• The Board of Directors declared a quarterly cash dividend of $0.10 per share on October 27, 2026, payable on December 2, 2026.
• Total dividends declared for 2026 reached $0.38 per share, a 27% increase over 2025.
• The company incurred $332 thousand in merger and acquisition expenses related to the pending Eagle acquisition during the quarter.
• The Bank's regulatory capital ratios remained well in excess of well-capitalized thresholds, with a total risk-based capital ratio of 17.1% as of September 30, 2026.
• The company fully paid off $40.0 million of federal funds purchased during the quarter.
• Total borrowings decreased due to the payoff of federal funds, while FHLB advances remained unchanged at $56.0 million.