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HomeNewsBusiness WireJohn Marshall Bancorp, Inc. Provides Mid-Quarter Update on Loan Modifications

John Marshall Bancorp, Inc. Provides Mid-Quarter Update on Loan Modifications

$194 Million Have Made Payments; Remaining $56 Million Expected to Resume by Year’s End

RESTON, Va.–(BUSINESS WIRE)–John Marshall Bancorp, Inc. (OTCQB: JMSB) (the “Company”), parent company of John Marshall Bank (the “Bank”) provided an update on its COVID loan modifications originally disclosed in its financial results for the three and six months ended June 30, 2020.

To recap, as of June 30, 2020, the Company had modified 172 loans with outstanding balances of $250.2 million, representing 16.5% of total loans. As of September 8, 2020, 149 loans representing balances of $194.0 million have resumed making regularly scheduled payments. These resumption figures amount to approximately 87% of the total number of loans and 78% of the aggregate balances modified. The resumption rate on the subset of loan modifications that have expired to date equaled 97% in terms of number of loans or 92% in terms of loan balances.

Two relationships, comprised of three loans and totaling $12.6 million were granted a second deferral. Each deferral will expire in October. One relationship consists of two loans totaling $4.0 million and is secured by the assets and the real estate of a restaurant as well as the borrower’s primary residence. The relationship has a combined loan-to-value of 76%. The second relationship is an $8.6 million loan on a retail shopping center with a loan-to-value of 68%. The first modification for this loan entailed deferral of principal and interest. The second modification, reflecting an improvement in the borrower’s position, was a deferral of principal only. These loans are well-secured with full guarantees from the owners; the Company does not anticipate a loss related to these two relationships.

Loans with COVID deferrals as of September 8, 2020 represented 3.7% of total loans as of June 30, 2020. The Company maintains regular contact with borrowers having COVID loan modifications, anticipates that the remaining $56.2 million will resume making regularly scheduled monthly payments and expects that the COVID modification process will be materially completed by December 31, 2020.

Anticipated Resumption Schedule (9/8/2020)

Expected Activity

 

% of Original Deferrals

Month

# of Loans

 

$ (millions)

 

#

 

$

Sep-20

4

$6.7

2.3%

2.1%

Oct-20

15

41.4

8.7%

16.6%

Nov-20

2

0.6

1.2%

0.2%

Dec-20

2

7.5

1.2%

3.0%

Remaining

23

$56.2

13.4%

22.5%

Commenting on the progress, Chris Bergstrom, President and Chief Executive Officer, stated, “John Marshall Bank continues to distinguish itself as a bank with a consultative customer service experience. We worked diligently to understand our impacted customers’ situations and equally hard to find solutions that allowed affected customers to regain their footing while mitigating risk to the Company. Our approach appears to be working. We expect to have substantially completed the modification process by the end of 2020.”

As of September 8, 2020, there were $56.2 million of loans remaining subject to COVID loan modifications. There were four commercial and industrial loans totaling $0.6 million and 19 commercial real estate (CRE) loans totaling $55.7 million. The following table summarizes the CRE loans still subject to COVID loan modifications as of September 8, 2020:

Loan-To-Value
Weighted Range:
Collateral # of Loans $ (millions) Average Low High
Retail

8

$20.0

62%

47%

70%

Hotel

5

24.1

65%

56%

71%

Office

1

0.3

70%

n/a

n/a

Multifamily

2

7.5

63%

63%

64%

Warehouse

1

0.3

22%

n/a

n/a

Other

2

3.5

54%

54%

54%

19

$55.7

63%

The weighted average loan-to-value ratios were based on the most recent appraisals in each individual credit file.

Key Takeaways

  • Favorable Payment Resumption Rate – The resumption rate on the subset of loan modifications that have expired to date equaled 97% in terms of number of loans or 92% in terms of loan balances.
  • Expected Completion by Year End – Generally speaking, the loans that received COVID modifications are well-secured with full guarantees from the borrowers. The Company expects the remaining $56.2 million to resume regular payments and anticipates that the modification process will be largely completed by December 31, 2020.
  • Outstanding Asset Quality – As of September 8, 2020, the Company had no non-performing assets and no real estate owned. Troubled debt restructurings were $623 thousand at September 8, 2020, a decrease of $10 thousand from June 30, 2020. Through September 8, 2020, the Company experienced year-to-date net recoveries of $43 thousand.
  • Local Loans – Of the 172 COVID loan modifications, 94% of the loans are located within the Washington metropolitan statistical area and 99% of the loans are located within Virginia, Maryland and the District of Columbia.
  • No Modifications Remaining in the Single Family Mortgage Portfolio – Single family mortgage loans with COVID modifications represented less than 1% of total loans as of June 30, 2020. As of September 8, 2020, all of the single family mortgage loans that were subject to modifications had resumed their regular payments.

About John Marshall Bancorp, Inc.

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. John Marshall Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, Rockville, Tysons, and Washington, D.C. and one loan production office in Arlington, Virginia. The Company is dedicated to providing an exceptional customer experience and value to local businesses, business owners and consumers in the Washington D.C. Metro area. The Bank offers a comprehensive line of sophisticated banking products, services and a digital platform that rival those of the largest banks. Dedicated relationship managers serving as direct point-of-contact along with an experienced staff help achieve customer’s financial goals. Learn more at www.johnmarshallbank.com.

In addition to historical information, this press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which 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. The Company’s 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 its subsidiary include, but are not limited to the following: changes in interest rates, general economic conditions, public health crises (such as the governmental, social and economic effects of the novel coronavirus), levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, 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 quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines, and other conditions which by their nature are not susceptible to accurate forecast, and are subject to significant uncertainty. 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 purpose only, are not forecasts and may not reflect actual results.

Except as otherwise indicated, this press release speaks as of the date hereof. The delivery of this press release shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company after the date hereof.

Contacts

Chris Bergstrom

(703) 584-0840

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