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What changed in John Marshall Bancorp, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of John Marshall Bancorp, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+302 added−286 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-28)

Top changes in John Marshall Bancorp, Inc.'s 2025 10-K

302 paragraphs added · 286 removed · 228 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

69 edited+13 added−12 removed212 unchanged
Biggest changeA rebuttable presumption of control exists if a person or company acquires 10% or more but less than 25% of any class of voting securities of an insured depository institution and either the institution has registered its securities with the SEC under Section 12 of the Exchange Act or no other person will own a greater percentage of that class of voting securities immediately after the acquisition. 15 Table of Contents In addition, Virginia law requires prior approval from the Virginia BFI for (i) the acquisition by a Virginia bank holding company of more than 5% of the voting shares of a Virginia bank or any holding company that controls a Virginia bank, or (ii) the acquisition by a Virginia bank holding company of a bank or its holding company domiciled outside Virginia.
Biggest changeA rebuttable presumption of control exists if a person or company acquires 10% or more but less than 25% of any class of voting securities of an insured depository institution and either the institution has registered its securities with the SEC 15 Table of Contents under Section 12 of the Exchange Act or no other person will own a greater percentage of that class of voting securities immediately after the acquisition.
In particular, this infrastructure reviews financial performance, trends and significant variances to budget; reviews and recommends for board approval risk limits and tolerances; reviews ongoing monitoring and reporting regarding our 13 Table of Contents performance with respect to these areas of risk, including compliance with board-approved risk limits and stress-testing; ensures annual back-testing and independent validation of models at a frequency commensurate with risk level; reviews and recommends our contingency funding plan; establishes wholesale borrowing limits to be submitted to the board of directors; and reviews information and reports submitted for the purpose of identifying, investigating, and assuring remediation, to its satisfaction, of errors or irregularities, if any.
In particular, this infrastructure reviews financial performance, trends and significant variances to budget; reviews and 13 Table of Contents recommends for board approval risk limits and tolerances; reviews ongoing monitoring and reporting regarding our performance with respect to these areas of risk, including compliance with board-approved risk limits and stress-testing; ensures annual back-testing and independent validation of models at a frequency commensurate with risk level; reviews and recommends our contingency funding plan; establishes wholesale borrowing limits to be submitted to the board of directors; and reviews information and reports submitted for the purpose of identifying, investigating, and assuring remediation, to its satisfaction, of errors or irregularities, if any.
Bergstrom, Peden and Carstater have deepened the management team by recruiting experienced financial services professionals who have demonstrated their ability to drive organic growth, improve operating efficiencies and establish a robust risk management framework. ● Disciplined credit culture. In originating loans, our relationship managers focus on experienced business owners with demonstrated capacity to fulfill their financial obligations.
Bergstrom, Peden, Carstater, and McDonough have deepened the management team by recruiting experienced financial services professionals who have demonstrated their ability to drive organic growth, improve operating efficiencies and establish a robust risk management framework. ● Disciplined credit culture. In originating loans, our relationship managers focus on experienced business owners with demonstrated capacity to fulfill their financial obligations.
The market area in which we operate has seen considerable population and economic growth over the past several decades. The most recent economic data suggest that the relative economic strength of our market area will continue, enabling us to grow our customer base and find opportunities to grow our market share.
The market area in which we operate has seen considerable population and economic growth over the past several decades. Recent economic data suggest that the relative economic strength of our market area will continue, enabling us to grow our customer base and find opportunities to grow our market share.
The role of our board of directors in our risk oversight is consistent with our leadership structure, with our President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and the other members of senior management having responsibility for assessing and managing our risk exposure, and our board of directors and its committees providing oversight in connection with those efforts.
The role of our board of directors in our risk oversight is consistent with our leadership structure, with our President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Banking Officer and the other members of senior management having responsibility for assessing and managing our risk exposure, and our board of directors and its committees providing oversight in connection with those efforts.
We provide subject matter expertise in a variety of niche industries including charter and private schools, government contractors, health services, nonprofits and associations, professional services, property management companies, and title companies. We focus on customers living and working in and near our service area.
We provide subject matter expertise in a variety of niche industries including charter and private schools, government contractors, trade contractors, health services, nonprofits and associations, professional services, property management companies, and title companies. We focus on customers living and working in and near our service area.
We could remain an emerging growth company for up to five years, or until the earliest of (i) the end of the first fiscal year during which we have total annual gross revenues of $1.07 billion or more, (ii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iii) the date on which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
We could remain an emerging growth company for up to five years, or until the earliest of (i) the end of the first fiscal year during which we have total annual gross revenues of $1.235 billion or more, (ii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iii) the date on which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
We utilize an independent, regionally based loan review firm, that focuses exclusively on community and regional bank, to validate our risk ratings and assess our underwriting and loan administration. We believe that our rigorous underwriting and diligent monitoring of the loan portfolio have created a “credit first” mentality that permeates the Company and is reflected in our asset quality statistics.
We utilize an independent, regionally based loan review firm, that focuses exclusively on community and regional banks, to validate our risk ratings and assess our underwriting and loan administration. We believe that our rigorous underwriting and diligent monitoring of the loan portfolio have created a “credit first” mentality that permeates the Company and is reflected in our asset quality statistics.
Strengths We believe that we are well-positioned to execute our banking strategy as a result of our competitive strengths: ● Experienced management team. Our executive management team brings decades of in-market experience. Christopher W. Bergstrom, our President and Chief Executive Officer, has a banking career spanning nearly 43 years. Mr. Bergstrom joined the Company in 2018.
Strengths We believe that we are well-positioned to execute our banking strategy as a result of our competitive strengths: ● Experienced management team. Our executive management team brings decades of in-market experience. Christopher W. Bergstrom, our President and Chief Executive Officer, has a banking career spanning nearly 44 years. Mr. Bergstrom joined the Company in 2018.
Prior to joining the Company, Mr. Bergstrom served in executive management capacities at banks in our market area that were significantly larger than the Company. Andrew J. Peden, our Chief Banking Officer, has over 24 years of banking experience, all of it in the Washington, D.C. MSA. He joined the Company in 2018. Kent D.
Prior to joining the Company, Mr. Bergstrom served in executive management capacities at banks in our market area that were significantly larger than the Company. Andrew J. Peden, our Chief Banking Officer, has over 25 years of banking experience, all of it in the Washington, D.C. MSA. He joined the Company in 2018. Kent D.
Through our membership in the IntraFi Network®, we can arrange FDIC insurance of up to $150 million of transaction deposits, certificates of deposits or some combination of the two. As the Bank’s overall balance sheet positions dictate, we may become more or less competitive in our interest rate structure as our liquidity position changes.
Through our membership in the IntraFi Network®, we can arrange FDIC insurance of up to $285 million of transaction deposits, certificates of deposits or some combination of the two. As the Bank’s overall balance sheet positions dictate, we may become more or less competitive in our interest rate structure as our liquidity position changes.
These and additional mandatory and permissive supervisory actions may be taken with respect to significantly undercapitalized and critically undercapitalized institutions. The Bank met the definition of being “well capitalized” as of December 31, 2024 and 2023. Deposit Insurance. The deposits of the Bank are insured up to applicable limits by the DIF.
These and additional mandatory and permissive supervisory actions may be taken with respect to significantly undercapitalized and critically undercapitalized institutions. The Bank met the definition of being “well capitalized” as of December 31, 2025 and 2024. Deposit Insurance. The deposits of the Bank are insured up to applicable limits by the DIF.
MSA had $292 billion in deposits. Owing in large part to the presence of the United States government, the unemployment rate in the Washington, D.C. MSA has consistently been lower than that of the country as a whole. The Washington, D.C. MSA has undergone a significant amount of bank consolidation in the past several decades.
MSA had $315 billion in deposits. Owing in large part to the presence of the United States government, the unemployment rate in the Washington, D.C. MSA has consistently been lower than that of the country as a whole. The Washington, D.C. MSA has undergone a significant amount of bank consolidation in the past several decades.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, laws governing flood insurance, federal and 19 Table of Contents state laws prohibiting unfair and deceptive business practices, foreclosure laws, and various regulations that implement some or all of the foregoing.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, laws governing flood insurance, federal and state laws prohibiting unfair and deceptive business practices, foreclosure laws, and various regulations that implement some or all of the foregoing.
Section 22(h) of the Federal Reserve Act prohibits loans to any of those individuals where 18 Table of Contents the aggregate amount exceeds an amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the bank’s unimpaired capital and unimpaired surplus.
Section 22(h) of the Federal Reserve Act prohibits loans to any of those individuals where the aggregate amount exceeds an amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the bank’s unimpaired capital and unimpaired surplus.
The Nominating Committee of our board of directors oversees risks associated with the independence of our board of directors and potential conflicts of interest.
The Governance and Nominating Committee of our board of directors oversees risks associated with the independence of our board of directors and potential conflicts of interest.
As of December 31, 2024 and 2023, the capital ratios of the Bank were in excess of the requirements. As discussed below, the Basel III capital reforms also integrated the new capital requirements into the prompt corrective action provisions under Section 38 of the FDIA.
As of December 31, 2025 and 2024, the capital ratios of the Bank were in excess of the requirements. As discussed below, the Basel III capital reforms also integrated the new capital requirements into the prompt corrective action provisions under Section 38 of the FDIA.
The $1 billion, 600,000 square foot campus will confer over 600 graduate degrees annually and provide talent to spur further technological growth. By 2030, Amazon’s headquarters in Arlington County is expected to occupy at least 4 million square feet of office space. Phase one of Amazon’s HQ2 was completed in the spring 2023.
The $1 billion, 600,000 square foot campus is expected to confer over 600 graduate degrees annually and provide talent to spur further technological growth. By 2030, Amazon’s headquarters in Arlington County is expected to occupy at least four million square feet of office space. Phase one of Amazon’s HQ2 was completed in the spring 2023.
Refer to the Loan Portfolio section within Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information regarding the composition of our loan portfolio as of December 31, 2024 and 2023.
Refer to the Loan Portfolio section within Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information regarding the composition of our loan portfolio as of December 31, 2025 and 2024.
Information on our website or any other website is not incorporated by reference herein and does not constitute a part of this Form 10-K. 14 Table of Contents Public Information Our Securities and Exchange Commission (“SEC”) filings are available to the public on the SEC’s Internet site at http://www.sec.gov.
Information on our website or any other website is not incorporated by reference herein and does not constitute a part of this Form 10-K. Public Information Our Securities and Exchange Commission (“SEC”) filings are available to the public on the SEC’s Internet site at http://www.sec.gov.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . ​ ​ 22 Table of Contents
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . ​ 23 Table of Contents
We offer a full range of consumer and commercial deposit products, including online banking with free bill pay, cash management with the means to detect and prevent fraud, sweep accounts, wire transfer, check imaging and remote deposit capture.
We offer a full range of consumer and commercial deposit products, including online banking with free bill pay, cash management with the means to detect and prevent fraud, sweep accounts, wire transfer, real time payments, check imaging and remote deposit capture.
Interest rate charges on this group of loans generally float at a factor at or above the prime lending rate, subject in many cases to a minimum rate. Generally, personal guarantees are required on these loans. Combined, commercial term loans and lines of credit represent approximately 2.6% of our loan portfolio as of December 31, 2024. Mortgage Lending .
Interest rate charges on this group of loans generally float at a factor at or above the prime lending rate, subject in many cases to a minimum rate. Generally, personal guarantees are required on these loans. Combined, commercial term loans and lines of credit represent approximately 2.5% of our loan portfolio as of December 31, 2025. Mortgage Lending .
Over the past five years, annual ROAA averaged 0.94% and annual ROAE averaged 9.61%. ● Hire experienced commercial banking officers. Our growth strategy centers around the hiring of highly experienced, local banking professionals with successful track records and established customer relationships with small to medium-sized businesses, their owners, professionals and non-profits.
Over the past five years, annual ROAA averaged 0.91% and annual ROAE averaged 9.16%. ● Hire experienced commercial banking officers. Our growth strategy centers around the hiring of highly experienced, local banking professionals with successful track records and established customer relationships with small to medium-sized businesses, their owners, professionals and non-profits.
For the year ended December 31, 2024, the Company’s overhead-to-average assets ratio was 1.41%. The Company’s overhead-to-average asset ratio is calculated by dividing non-interest expense by average assets. Competition The banking business is highly competitive, and we face competition in our market area from many other local, regional, and national financial institutions.
For the year ended December 31, 2025, the Company’s overhead-to-average assets ratio was 1.48%. The Company’s overhead-to-average asset ratio is calculated by dividing non-interest expense by average assets. Competition The banking business is highly competitive, and we face competition in our market area from many other local, regional, and national financial institutions.
Any non-bank subsidiaries of the Company may pay dividends to the Company periodically, subject to certain statutory restrictions. 16 Table of Contents The Company may receive fees from or pay fees to its affiliated companies for expenses incurred related to certain activities performed by or for the Company for the benefit of its affiliated companies or for its benefit.
Any non-bank subsidiaries of the Company may pay dividends to the Company periodically, subject to certain statutory restrictions. The Company may receive fees from or pay fees to its affiliated companies for expenses incurred related to certain activities performed by or for the Company for the benefit of its affiliated companies or for its benefit.
In addition, approximately 48.1% of the loans in our loan portfolio were first originated during the past three years. While we believe our underwriting standards are designed to manage normal lending risks, it is difficult to assess the future 8 Table of Contents performance of our loan portfolio due to the recent origination of many of our loans.
In addition, approximately 37.5% of the loans in our loan portfolio were first originated during the past three years. While we believe our underwriting standards are designed to manage normal lending risks, it is difficult to assess the future 8 Table of Contents performance of our loan portfolio due to the recent origination of many of our loans.
Under the FDIA, insured depository institutions, such as the Bank, are prohibited from making capital distributions, including the payment of dividends, if after making such distributions the institution would become “undercapitalized” (as such term is used in the statute).
Under the FDIA, insured depository institutions, such as the Bank, are prohibited from making capital distributions, including the payment of dividends, if after making such distributions the institution would become “undercapitalized” (as 16 Table of Contents such term is used in the statute).
At December 31, 2024, the Company and the Bank have not been made aware of any instances of noncompliance with this guidance.
At December 31, 2025, the Company and the Bank have not been made aware of any instances of noncompliance with this guidance.
General Corporate Information Our principal executive offices are located at 1943 Isaac Newton Square, Suite 100, Reston, Virginia 20190 and our telephone number at that address is (703) 584-0840. Additional information can be found on our website: www.johnmarshallbank.com.
General Corporate Information Our principal executive offices are located at 1943 Isaac Newton Square, Suite 100, Reston, Virginia 20190 and our telephone number at that address is (703) 584-0840. Additional information can be found on our website: 14 Table of Contents www.johnmarshallbank.com.
Finally, the Bank works with highly sophisticated sponsors that are experienced, well capitalized, and positioned to manage through a downturn. As of December 31, 2024, construction and development loans made up approximately 8.8% of our loan portfolio. 10 Table of Contents Commercial Term Loans . We provide funds for equipment and general corporate needs.
Finally, the Bank works with highly sophisticated sponsors that are experienced, well capitalized, and positioned to manage through a downturn. As of December 31, 2025, construction and development loans made up approximately 11.3% of our loan portfolio. 10 Table of Contents Commercial Term Loans . We provide funds for equipment and general corporate needs.
Certain provisions of Regulation Z require creditors to make a reasonable and good faith determination based on verified and documented information that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms.
Certain provisions of Regulation Z require creditors to make a reasonable and good faith determination based on verified and documented information that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms. Fair Access to Financial Services .
Although the mortgage loans the Bank originates often carry amortization periods of up to 30 years, interest rate risk is controlled through balloon payments or interest rate adjustments of generally six years or less. At December 31, 2024, Bank originated 1-4 residential mortgage loans represented 3.5% of our loan portfolio.
Although the mortgage loans the Bank originates often carry amortization periods of up to 30 years, interest rate risk is controlled through balloon payments or interest rate adjustments of generally six years or less. At December 31, 2025, Bank originated 1-4 residential mortgage loans represented 8.1% of our loan portfolio.
According to data sourced from S&P Global Market Intelligence, among the largest MSAs ranked by gross domestic product (Chicago, Dallas, Los Angeles, New York, Houston, and Atlanta), the Washington D.C.
According to data sourced from S&P Global Market Intelligence, among the largest MSAs ranked by gross domestic product (New York, Los Angeles, Chicago, San Francisco, Dallas and Washington), the Washington, D.C.
CAMELS composite ratings set a maximum insurance assessment for CAMELS 1 and 2 rated banks and set minimum assessments for lower rated institutions. For the years ended December 31, 2024 and 2023, the Company recorded expense of $1.0 million and $1.0 million, respectively, for FDIC insurance premiums. Transactions with Affiliates .
CAMELS composite ratings set a maximum insurance assessment for CAMELS 1 and 2 rated banks and set minimum assessments for lower rated institutions. The Company recorded an expense of $1.0 million for FDIC insurance premiums for each of the years ended December 31, 2025 and 2024. Transactions with Affiliates .
Management views purchased mortgages as a managed risk means of diversifying our earning asset portfolio and achieving a yield, net of the amortized premium, superior to that which may be available in the fixed income market. At December 31, 2024, approximately 16.0% of our loan portfolio related to purchased mortgages. Other Loans .
Management views purchased mortgages as a managed risk means of diversifying our earning asset portfolio and achieving a yield, net of the amortized premium, superior to that which may be available in the fixed income market. At December 31, 2025, approximately 17.1% of our loan portfolio related to purchased mortgages. Other Loans .
The Dodd-Frank Act centralized responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau (the “CFPB”), and giving it responsibility for implementing, examining, and enforcing compliance with federal consumer protection laws.
The Dodd-Frank Act centralized responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau (the “CFPB”), and giving it responsibility for implementing, examining, and enforcing 19 Table of Contents compliance with federal consumer protection laws.
In addition to the $0.25 per share cash dividend paid in July 2024, total return to shareholders when considering the change in book value per share and cash dividend for 2024 was $1.28 per share, an increase of 7.9%. ● Attractive markets. As of June 30, 2024, the most recent FDIC data available, the Washington, D.C.
In addition to the $0.30 per share cash dividend paid in July 2025, total return to shareholders when considering the change in book value per share and cash dividend for 2025 was $1.71 per share, an increase of 9.9%. ● Attractive markets. As of June 30, 2025, the most recent FDIC data available, the Washington, D.C.
As of December 31, 2024, the Company had no non-accrual loans and no other real estate owned. In each of the past five fiscal years, net charge-offs have not exceeded 0.01% of gross loans. ● Conservative balance sheet. The Company’s balance sheet provides the foundation for prudent growth.
As of December 31, 2025, the Company had no non-accrual loans and no other real estate owned (“OREO”). In each of the past five fiscal years, net charge-offs have not exceeded 0.02% of average gross loans. ● Conservative balance sheet. The Company’s balance sheet provides the foundation for prudent growth.
See Item 1A, Risk Factors, of this Form 10-K for more information on emerging growth companies. Employees As of December 31, 2024, we had 130 full-time employees and 3 part-time employees. None of our employees are covered by a collective bargaining agreement.
See Item 1A, Risk Factors, of this Form 10-K for more information on emerging growth companies. Employees As of December 31, 2025, we had 138 full-time employees and 2 part-time employees. None of our employees are covered by a collective bargaining agreement.
The Bank’s capital ratios exceed the thresholds required of a well capitalized institution. As of December 31, 2024, the Bank had the capacity to add $990 million of risk-weighted assets to its balance sheet and still maintain well capitalized status. The Company has ample liquidity to meet its obligations and fund anticipated loan growth.
The Bank’s capital ratios exceed the thresholds required of a well-capitalized institution. As of December 31, 2025, the Bank had the capacity to add $1.0 billion of risk-weighted assets to its balance sheet and still maintain well-capitalized status. The Company has ample liquidity to meet its obligations and fund anticipated loan growth.
Our team of 5 Table of Contents professionals has been an important driver of our organic growth by developing banking relationships with current and potential customers. We believe our ability to recruit and retain talented, customer service-oriented professionals has been at the core of our growing and expanding banking relationships. ● Stable profitability and completive shareholder returns earnings.
Our team of professionals has been an important driver of our organic growth by developing banking relationships with current and potential customers. We believe our ability to recruit and retain talented, customer service-oriented professionals has been at the core of our growing and expanding banking relationships. ● Accelerating earnings momentum and completive returns.
As of December 31, 2024, the Bank had over $228 million of liquid assets, defined as cash and unpledged securities, over $490 million of available secured borrowing facilities and $110 million of available unsecured borrowing facilities. Management believes the Company’s balance sheet is well-positioned for organic growth and potential acquisitions. ● Proven ability to grow.
As of December 31, 2025, the Bank had over $233.5 million of liquid assets, defined as cash and unpledged securities, over $594 million of available secured borrowing facilities and $110 million of available unsecured borrowing facilities. Management believes the Company’s balance sheet is well-positioned for organic growth and potential acquisitions. 5 Table of Contents ● Proven ability to grow.
As of December 31, 2024, we had total consolidated assets of $2.23 billion, gross loans of $1.87 billion, total deposits of $1.89 billion and total shareholders’ equity of $246.6 million. Market Area A key factor in our ability to achieve our strategic goals and create shareholder value is the attractiveness of our market area.
As of December 31, 2025, we had total consolidated assets of $2.33 billion, gross loans of $1.97 billion, total deposits of $1.97 billion and total shareholders’ equity of $265.6 million. Market Area A key factor in our ability to achieve our strategic goals and create shareholder value is the attractiveness of our market area.
We intend to execute on this goal by focusing on the following objectives: ● Maintain financial and credit quality discipline. 2024 underscored the importance of consistency of purpose and a conservative balance sheet. We are committed to being a high performing bank and will strive to continue to grow our loan and deposit portfolios in a disciplined manner.
We intend to execute on this goal by focusing on the following objectives: ● Maintain financial and credit quality discipline. We are committed to being a high performing bank and will strive to continue to grow our loan and deposit portfolios in a disciplined manner.
At December 31, 2024, approximately 17.6% of our loan portfolio related to owner occupied commercial real estate loans, and approximately 40.5% of our loan portfolio related to managed investment commercial real estate. Stress testing remains an important component of our organization, including oversight of commercial real estate loans.
At December 31, 2025, approximately 16.4% of our loan portfolio related to owner occupied commercial real estate loans, and approximately 38.5% of our loan portfolio related to managed investment commercial real estate. Stress testing remains an important component of our organization, including oversight of commercial real estate loans.
At June 30, 2024, our deposits were $1.92 billion, ranked 18 th in the MSA and represented a 0.7% market share. Ten of the seventeen banks ranked ahead of the Company are headquartered outside of the Washington, D.C. MSA. Our market area has experienced a significant degree of banking consolidation over the last several decades.
At June 30, 2025, our deposits were $1.90 billion, ranked 17 th in the MSA and represented a 0.6% market share. Nine of the sixteen banks ranked ahead of the Company are headquartered outside of the Washington, D.C. MSA. Our market area has experienced a significant degree of banking consolidation over the last several decades.
Some of the products and services that we offer include commercial checking, savings and money market accounts, certificates of deposit, treasury and cash management services, commercial and industrial loans, commercial real estate loans, residential and commercial construction and development loans, online banking, and mobile banking.
Some of the products and services that we offer include commercial checking, savings and money market accounts, certificates of deposit, treasury and cash management services, commercial and industrial loans, commercial real estate loans, residential and commercial construction and development loans, U.S. Small Business Administration (“SBA”) 7(a) loans, consumer mortgages, online banking, and mobile banking.
As described above, the final rules to implement the Basel III regulatory capital framework also integrated new requirements into the prompt corrective action framework. “Well capitalized” institutions may generally operate without additional supervisory restriction.
The federal bank regulatory agencies have additional enforcement authority with respect to undercapitalized depository institutions. As described above, the final rules to implement the Basel III regulatory capital framework also integrated new requirements into the prompt corrective action framework. “Well capitalized” institutions may generally operate without additional supervisory restriction.
At December 31, 2024, the Bank’s statutory lending limit to any single borrower was approximately $44.3 million, subject to certain exceptions provided under applicable law. As of December 31, 2024, the Bank’s credit exposure to its largest borrower was $32.6 million. Commercial Loans .
At December 31, 2025, the Bank’s statutory lending limit to any single borrower was approximately $46.7 million, subject to certain exceptions provided under applicable law. As of December 31, 2025, the Bank’s credit exposure to its largest borrower was $30.0 million. Commercial Loans .
MSA ranked second for 2024 median household income at $118,391, second in 2024 to 2029 projected population growth at 2.7% and first in the percentage of inhabitants 25 or older with a bachelor’s degree or higher educational attainment at 54.5%. According to the U.S. Bureau of Labor Statistics, the Washington, D.C.
MSA ranked second for 2025 median household income at $123,209, second in 2026 to 2031 projected population growth at 2.8% and first in the percentage of inhabitants 25 or older with a bachelor’s degree or higher educational attainment at 55.4%. According to the U.S. Bureau of Labor Statistics, the Washington, D.C.
These privacy provisions generally prohibit a financial institution from providing a customer’s personal financial information to unaffiliated parties without prior notice to and approval from the customer.
Each institution must conduct an internal risk assessment of its ability to protect customer information. These privacy provisions generally prohibit a financial institution from providing a customer’s personal financial information to unaffiliated parties without prior notice to and approval from the customer.
Over the long term we have demonstrated an ability to grow our loans and deposits. For the five year period ended December 31, 2024, the Company’s compound annual growth rates in assets, loans, deposits and non-interest bearing deposits were 7.2%, 7.1%, 7.7% and 14.3%, respectively.
Over the long term we have demonstrated an ability to grow our loans and deposits. For the eight year period ended December 31, 2025, the Company’s compound annual growth rates in assets, gross loans, deposits and non-interest bearing deposits were 8.9%, 8.8%, 10.4% and 12.0%, respectively.
MSA’s December 2024 unemployment rate was 2.8%, the lowest among the aforementioned MSAs. Based upon Federal Deposit Insurance Corporation (the “FDIC”) data as of June 30, 2024, the Washington D.C. MSA housed $292 billion of deposits, with the top five financial institutions controlling 66.7%.
MSA’s December 2025 unemployment rate was 4.5%, less than the average of six largest MSAs. Based upon Federal Deposit Insurance Corporation (the “FDIC”) data as of June 30, 2025, the Washington D.C. MSA housed $315 billion of deposits, with the top five financial institutions controlling 68%.
Furthermore, such assessment is also required of banks that have applied, among other things, to merge or consolidate with or acquire the assets or assume the liabilities of an insured depository institution, or to open or relocate a branch.
The CRA requires the appropriate federal banking agency, in connection with its examination of a bank, to assess the bank’s record in meeting such credit needs. 18 Table of Contents Furthermore, such assessment is also required of banks that have applied, among other things, to merge or consolidate with or acquire the assets or assume the liabilities of an insured depository institution, or to open or relocate a branch.
As a result, the future of the CFPB and its impact on our business are uncertain. Privacy Legislation . Several laws, including the Right to Financial Privacy Act and the Gramm-Leach-Bliley Act (“GLB Act”), and related regulations issued by the federal bank regulatory agencies, provide protections against the transfer and use of customer information by financial institutions.
Several laws, including the Right to Financial Privacy Act and the Gramm-Leach-Bliley Act (“GLB Act”), and related regulations issued by the federal bank regulatory agencies, provide protections against the transfer and use of customer information by financial institutions. A financial institution must provide its customers information regarding its policies and procedures with respect to the handling of customers’ personal information.
The CRA imposes on financial institutions an affirmative and ongoing obligation to meet the credit needs of the local communities they serve, including low and moderate income neighborhoods. The CRA requires the appropriate federal banking agency, in connection with its examination of a bank, to assess the bank’s record in meeting such credit needs.
The CRA imposes on financial institutions an affirmative and ongoing obligation to meet the credit needs of the local communities they serve, including low and moderate income neighborhoods.
Carstater, our Chief Financial Officer, has over 26 years of financial services experience as a commercial banker and investment banker. He joined the Company in 2016. Messrs.
Carstater, our Chief Financial Officer, has over 28 years of financial services experience as a commercial banker and investment banker. He joined the Company in 2016. Jason R. McDonough, our Chief Lending Officer, has close to 20 years of banking experience, all of it in the Washington, D.C. MSA. He joined the Company in 2018. Messrs.
If the Company or the Bank fails to meet the expectations set forth in this regulatory guidance, the Company or the Bank could be subject to various regulatory actions and any remediation efforts may require significant resources of the Company or the Bank.
If the Company or the Bank fails to meet the expectations set forth in this regulatory guidance, the Company or the Bank could be subject to various regulatory actions and any remediation efforts may require significant resources of the Company or the Bank. ​ On November 18, 2021, the federal bank regulatory agencies issued a final rule, effective April 1, 2022, imposing new notification requirements for cybersecurity incidents.
The Company’s website address is www.johnmarshallbank.com . The information on the Company’s website is not incorporated into this report or any other filing the Company makes with the SEC.
The Company’s SEC filings are posted and available at no cost on its website as soon as reasonably practicable after the reports are filed electronically with the SEC. The Company’s website address is www.johnmarshallbank.com . The information on the Company’s website is not incorporated into this report or any other filing the Company makes with the SEC.
This legal challenge has since been paused to allow time for the CFPB to assess the rule and determine whether it aligns with the agency’s current policy objectives. ​ Cybersecurity . The federal bank regulatory agencies have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of a financial institution’s board of directors.
The federal bank regulatory agencies have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of a financial institution’s board of directors.
A change in statutes, regulations, or regulatory policies applicable to the Company or the Bank could have a material, adverse effect on the business, financial condition, and results of operations of the Company and the Bank.
A change in statutes, regulations, or regulatory policies applicable to the Company or the Bank could have a material, adverse effect on the business, financial condition, and results of operations of the Company and the Bank. 22 Table of Contents Reporting Obligations under Securities Laws The Company is subject to the periodic and other reporting requirements of the Exchange Act, including the filing of annual, quarterly, and other reports with the SEC.
Immediately upon becoming “undercapitalized,” a depository institution becomes subject to the provisions of Section 38 of the FDIA, which: (i) restrict payment of capital distributions and management fees; (ii) require that the appropriate federal banking agency monitor the condition of the institution and its efforts to restore its capital; (iii) require submission of a capital restoration plan; (iv) restrict the growth of the institution’s assets; and (v) require prior approval of certain expansion proposals.
With respect to “adequately capitalized” institutions, such banks cannot normally pay dividends or make any capital contributions that would leave the bank undercapitalized; they cannot pay a management fee to a controlling person if after paying the fee, it would be undercapitalized; and they cannot accept, renew, or rollover any brokered deposit unless the bank has applied for and been granted a waiver by the FDIC. 17 Table of Contents Immediately upon becoming “undercapitalized,” a depository institution becomes subject to the provisions of Section 38 of the FDIA, which: (i) restrict payment of capital distributions and management fees; (ii) require that the appropriate federal banking agency monitor the condition of the institution and its efforts to restore its capital; (iii) require submission of a capital restoration plan; (iv) restrict the growth of the institution’s assets; and (v) require prior approval of certain expansion proposals.
The minimum total capital to risk-weighted assets ratio (10.0%) and minimum leverage ratio (5.0%) for well capitalized status were unchanged by the final rules.
The minimum total capital to risk-weighted assets ratio (10.0%) and minimum leverage ratio (5.0%) for well capitalized status were unchanged by the final rules. Prompt Corrective Action . Federal banking regulators are authorized and, under certain circumstances, required to take certain actions against banks that fail to meet their capital requirements.
Our 10 largest borrowing relationships account for approximately 9.3% of our loans as of December 31, 2024.
Our 10 largest borrowing relationships by outstanding borrowings accounted for approximately 11.7% of our loans as of December 31, 2025.
Gross loans net of unearned income grew $12.2 million or 0.7% during 2024, with $29.6 million of the growth taking place during the three months ended December 31, 2024. Average loan growth over the past five years has been $108.4 million a year. The Company’s asset quality remains outstanding, with no non-accrual loans and no other real estate owned (“OREO”).
Gross loans net of unearned income grew $103.2 million or 5.5% during 2025, with $37.3 million of the growth taking place during the three months ended December 31, 2025. The Company’s asset quality remains outstanding, with no non-accrual loans and no OREO.
The Company has adopted a clawback policy compliant with such rule, a copy of which is attached as Exhibit 97 to this Form 10-K. Mortgage Banking Regulation.
A copy of our clawback policy is included as Exhibit 97 to this Annual Report on 10-K. Mortgage Banking Regulation.
The Company reported net income of $4.8 million for the three months ended December 31, 2024 and $4.2 million for the three months ended September 30, 2024. From December 31, 2023 to December 31, 2024, the Company increased book value per share from $16.25 to $17.28.
From December 31, 2024 to December 31, 2025, the Company increased book value per share from $17.28 to $18.69.
Further regulatory positions taken by the CFPB may influence how other regulatory agencies may apply the subject consumer financial protection laws and regulations. In February 2025, the Trump administration halted the CFPB’s operations, and its employees were instructed to cease all supervision and examination activity.
Further regulatory positions taken by the CFPB may influence how other regulatory agencies may apply the subject consumer financial protection laws and regulations. During 2025, the CFPB reduced its staff by over 80%. The reduction in force is the subject of litigation, and the staffing cuts are currently stayed pending the federal circuit court’s rehearing of the case.
Removed
In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires financial institutions to estimate and establish an allowance for credit losses using a current expected credit loss (“CECL”) model.
Added
The Company reported net income of $21.2 million for the twelve months ended December 31, 2025, a 24.0% increase over the $17.1 million reported for the twelve months ended December 31, 2024. Net income for the fourth quarter of 2025 marked the sixth consecutive quarter of net income growth.
Removed
The CECL model estimates credit losses over the lifetime of our financial assets measured at amortized cost at the date of origination or acquisition, as opposed to reserving for incurred or probable losses through the balance sheet date.
Added
In addition, Virginia law requires prior approval from the Virginia BFI for (i) the acquisition by a Virginia bank holding company of more than 5% of the voting shares of a Virginia bank or any holding company that controls a Virginia bank, or (ii) the acquisition by a Virginia bank holding company of a bank or its holding company domiciled outside Virginia.
Removed
The Federal Reserve and FDIC have adopted rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in over a three-year transition period ending January 1, 2026 the day-one impact on regulatory capital that may result from the adoption of the CECL model.
Added
The revised rules would have substantially altered the methodology for assessing compliance with the CRA, and likely would have made it more challenging and/or costly for the Bank to maintain its “satisfactory” rating. Following its finalization on March 29, 2024, the 2023 modernization rule became subject to an ongoing injunction.
Removed
The Company implemented the CECL model on January 1, 2023 and elected to apply the provisions of the CECL deferral transition in the determination of its risk based capital ratios. The impact of the application of this deferral transition on the ratios was not significant. 17 Table of Contents Prompt Corrective Action .
Added
On July 16, 2025, the federal bank regulatory agencies issued a joint proposal to rescind the 2023 modernization rule. The agencies continue to apply the CRA rules as they existed before the 2023 modernization, considering the injunction and pending finalization of the rescission of the modernization rule. ​ Anti-Money Laundering Laws and Regulations .
Removed
Federal banking regulators are authorized and, under certain circumstances, required to take certain actions against banks that fail to meet their capital requirements. The federal bank regulatory agencies have additional enforcement authority with respect to undercapitalized depository institutions.
Added
The impact of these developments on banking organizations is uncertain. States and state attorneys general may increase regulatory, investigative and enforcement activity with respect to consumer protection, in response to changes in regulation, supervision and enforcement of consumer protection laws by federal regulators.
Removed
With respect to “adequately capitalized” institutions, such banks cannot normally pay dividends or make any capital contributions that would leave the bank undercapitalized; they cannot pay a management fee to a controlling person if after paying the fee, it would be undercapitalized; and they cannot accept, renew, or rollover any brokered deposit unless the bank has applied for and been granted a waiver by the FDIC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to an Investment in Our Common Stock We currently qualify as an “emerging growth company” and a “smaller reporting company,” and the reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
Biggest changeGiven the lack of empirical data on the credit and other financial risks posed by climate change, it is impossible to predict how climate change may impact our financial condition and operations; however, as a banking organization, the physical effects of climate change may present certain unique risks to us. ​ Risks Related to an Investment in Our Common Stock We currently qualify as an “emerging growth company” and a “smaller reporting company,” and the reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
We are subject to regulation and supervision by the Federal Reserve, and our Bank is subject to regulation and supervision by the FDIC and the Virginia BFI.
We are subject to regulation and supervision by the Federal Reserve, and our Bank is subject to regulation and supervision by the Federal Reserve, the FDIC, and the Virginia BFI.
These factors could adversely affect our business, financial condition, liquidity and results of operations, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this Annual Report on Form 10-K, in which case the trading price of our common stock could decline.
These factors could adversely affect our future business, financial condition, liquidity and results of operations, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this Annual Report on Form 10-K, in which case the trading price of our common stock could decline.
Liquidity stress testing, interest rate sensitivity analysis, allowance for loan credit loss measurement, portfolio stress testing and the identification of possible violations of anti-money laundering regulations are examples of areas in which we are dependent on models and the data that underlie them. We anticipate that model-derived insights will be used more widely in our decision making in the future.
Liquidity stress testing, interest rate sensitivity analysis, allowance for loan credit losses measurement, portfolio stress testing and the identification of possible violations of anti-money laundering regulations are examples of areas in which we are dependent on models and the data that underlie them. We anticipate that model-derived insights will be used more widely in our decision making in the future.
The Company did not have any OREO as of December 31, 2024. Risks Related to Funding and Liquidity Our deposit portfolio includes significant concentrations and a large percentage of our deposits are attributable to a relatively small number of customers. We rely on a small number of large deposit customers, including high-average balance municipal deposits, as a source of funds.
The Company did not have any OREO as of December 31, 2025. Risks Related to Funding and Liquidity Our deposit portfolio includes significant concentrations and a large percentage of our deposits are attributable to a relatively small number of customers. We rely on a small number of large deposit customers, including high-average balance municipal deposits, as a source of funds.
Our inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of OREO could have an adverse effect on our business, financial condition and results of operations. The Company did not have any OREO as of December 31, 2024.
Our inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of OREO could have an adverse effect on our business, financial condition and results of operations. The Company did not have any OREO as of December 31, 2025.
Further, the Company may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the outputs of their models, matters over which the Company may have limited visibility.
Further, the Company may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated 40 Table of Contents with the outputs of their models, matters over which the Company may have limited visibility.
Any problems caused by these third parties, including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor, failure of a vendor to provide services for any reason, or poor performance of services by a vendor, could adversely affect our ability to deliver 31 Table of Contents products and services to our customers and otherwise conduct our business.
Any problems caused by these third parties, including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor, failure of a vendor to provide services for any reason, or poor performance of services by a vendor, could adversely affect our ability to deliver products and services to our customers and otherwise conduct our business.
As these technologies improve in the future, we may be required to make significant capital expenditures in order to remain competitive, which may increase our overall expenses and have an adverse effect on our business, financial condition and results of operations. 29 Table of Contents Interest rate shifts may reduce net interest income and otherwise negatively impact our financial condition and results of operations.
As these technologies improve in the future, we may be required to make significant capital expenditures in order to remain competitive, which may increase our overall expenses and have an adverse effect on our business, financial condition and results of operations. Interest rate shifts may reduce net interest income and otherwise negatively impact our financial condition and results of operations.
Nevertheless, we could be required to maintain higher levels of capital as a result of our commercial real estate concentration, which could limit our 35 Table of Contents growth, require us to obtain additional capital, and have an adverse effect on our business, financial condition and results of operations. Changes in accounting standards could materially impact our financial statements.
Nevertheless, we could be required to maintain higher levels of capital as a result of our commercial real estate concentration, which could limit our growth, require us to obtain additional capital, and have an adverse effect on our business, financial condition and results of operations. Changes in accounting standards could materially impact our financial statements.
We actively monitor our available for sale securities portfolio and we do not currently anticipate the need to sell securities for liquidity purposes. Furthermore, we believe it is unlikely that we would be required to sell any such securities before recovery of their amortized cost bases, which may be at maturity.
We actively monitor our available-for-sale securities portfolio and we do not currently anticipate the need to sell securities for liquidity purposes. Furthermore, we believe it is 29 Table of Contents unlikely that we would be required to sell any such securities before recovery of their amortized cost bases, which may be at maturity.
From time to time, FASB or the SEC may change the financial accounting and reporting standards that govern the preparation of our financial statements. Such changes may result in us being subject to new or changing accounting and reporting standards.
From time to time, the Financial Accounting Standards Board or the SEC may change the financial accounting and reporting standards that govern the preparation of our financial statements. Such changes may result in us being subject to new or changing accounting and reporting standards.
The outlook for commercial real estate remains dependent on the broader economic environment and, specifically, how major subsectors respond to a higher interest rate environment and higher prices for 25 Table of Contents commodities, goods and services. Our underwriting, review and monitoring cannot eliminate all of the risks related to these loans.
The outlook for commercial real estate remains dependent on the broader economic environment and, specifically, how major subsectors respond to a higher interest rate environment and higher prices for commodities, goods and services. Our underwriting, review and monitoring cannot eliminate all of the risks related to these loans.
Our limited experience with these loans may not provide us with a significant history with which to judge future collectability or performance. However, we believe that our stringent credit underwriting process, our ongoing credit review processes, and our history of successful management of our loan portfolio, mitigate these risks.
Our limited experience with 27 Table of Contents these loans may not provide us with a significant history with which to judge future collectability or performance. However, we believe that our stringent credit underwriting process, our ongoing credit review processes, and our history of successful management of our loan portfolio, mitigate these risks.
If we are not able to continue our historical levels of growth, we may not be able to maintain our historical revenue trends. In addition, the Company periodically evaluates acquisition opportunities as an additional means to achieve growth. While we have not made any acquisitions to date, we may do so in the future.
If we are not able to continue our historical levels of growth, we may not be able to maintain our historical revenue trends. 39 Table of Contents In addition, the Company periodically evaluates acquisition opportunities as an additional means to achieve growth. While we have not made any acquisitions to date, we may do so in the future.
This spread may be exacerbated by higher prevailing interest rates. In addition, because our available-for-sale investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when 28 Table of Contents interest rates are elevated.
This spread may be exacerbated by higher prevailing interest rates. In addition, because our available-for-sale investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. Risks Related to Our Operations We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. 31 Table of Contents Risks Related to Our Operations We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors.
Although we endeavor to maintain our allowance for loan credit losses at a level adequate to absorb any inherent expected losses in the loan portfolio, these estimates of loan credit losses are necessarily subjective and their accuracy depends on the outcome of future events.
Although we endeavor to maintain our allowance for loan credit losses at a level adequate to absorb any inherent expected losses in the loan portfolio, these estimates of 24 Table of Contents loan credit losses are necessarily subjective and their accuracy depends on the outcome of future events.
If we are forced to foreclose on a project prior to or at completion due to a default, we may not be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs.
If we are forced to foreclose on a project prior to or at completion due to a default, we may not be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and 26 Table of Contents holding costs.
We may also be subject to potentially adverse regulatory consequences. 32 Table of Contents System failure or breaches of our network security, including as a result of cyber-attacks or data security breaches, could subject us to increased operating costs as well as litigation and other liabilities.
We may also be subject to potentially adverse regulatory consequences. System failure or breaches of our network security, including as a result of cyber-attacks or data security breaches, could subject us to increased operating costs as well as litigation and other liabilities.
Failure to maintain capital to meet current or future regulatory requirements could have an adverse effect on our business, financial condition and results of operations. Our use of third party vendors and our other ongoing third party business relationships are subject to increasing regulatory requirements and attention.
Failure to maintain capital to meet current or future regulatory requirements could have an adverse effect on our business, financial condition and results of operations. 35 Table of Contents Our use of third party vendors and our other ongoing third party business relationships are subject to increasing regulatory requirements and attention.
Negative public opinion can result from our actual or alleged conduct in any number of activities, including business and lending practices, corporate governance and acquisitions, and from actions taken by government regulators and community organizations in response to those activities.
Negative public opinion can result from our actual or alleged conduct in any number of activities, including business and lending practices, corporate 32 Table of Contents governance and acquisitions, and from actions taken by government regulators and community organizations in response to those activities.
Additional equity offerings may dilute the holdings of our existing shareholders or reduce the market price of our common stock, or both. Holders of our common stock are not entitled to preemptive rights or other protections against dilution. 37 Table of Contents Our common stock is subordinate to our existing and future indebtedness.
Additional equity offerings may dilute the holdings of our existing shareholders or reduce the market price of our common stock, or both. Holders of our common stock are not entitled to preemptive rights or other protections against dilution. Our common stock is subordinate to our existing and future indebtedness.
We are dependent on our management team and key employees. We believe that our growth and future success will depend on the retention of our management team and key employees. Our management team and other key employees, including those who conduct our loan origination and other business 39 Table of Contents development activities, have significant industry experience.
We are dependent on our management team and key employees. We believe that our growth and future success will depend on the retention of our management team and key employees. Our management team and other key employees, including those who conduct our loan origination and other business development activities, have significant industry experience.
The unavailability of a sufficient volume of brokered deposits could have an adverse effect on our business, financial condition and results of operations. Liquidity risk could impair our ability to fund operations and meet our obligations as they become due.
The 28 Table of Contents unavailability of a sufficient volume of brokered deposits could have an adverse effect on our business, financial condition and results of operations. Liquidity risk could impair our ability to fund operations and meet our obligations as they become due.
We require sufficient liquidity to fund asset growth, meet customer loan requests, customer deposit 27 Table of Contents maturities and withdrawals, payments on our debt obligations as they come due and other cash commitments under both normal operating conditions and other unpredictable circumstances, including events causing industry or general financial market stress.
We require sufficient liquidity to fund asset growth, meet customer loan requests, customer deposit maturities and withdrawals, payments on our debt obligations as they come due and other cash commitments under both normal operating conditions and other unpredictable circumstances, including events causing industry or general financial market stress.
In either event, if market interest rates should move contrary to our position, this “gap” will negatively impact our earnings. Many factors impact interest rates, including governmental monetary policies, inflation, recession, changes in unemployment, the money supply, and international disorder and instability in domestic and foreign financial markets.
In either event, if market interest rates should move contrary to our position, this “gap” will negatively impact 30 Table of Contents our earnings. Many factors impact interest rates, including governmental monetary policies, inflation, recession, changes in unemployment, the money supply, and international disorder and instability in domestic and foreign financial markets.
Our operations rely on the secure processing, transmission and storage of confidential information in our computer systems and networks. In addition, to access our products and services, our customers may use devices that are beyond our control systems.
Our operations rely on the secure processing, transmission and storage of 33 Table of Contents confidential information in our computer systems and networks. In addition, to access our products and services, our customers may use devices that are beyond our control systems.
Applicable laws, regulations, interpretations, enforcement policies and accounting principles have been subject to significant changes in recent years, and may be subject to significant future changes. Additionally, federal and state 34 Table of Contents regulatory agencies may change the manner in which existing regulations are applied.
Applicable laws, regulations, interpretations, enforcement policies and accounting principles have been subject to significant changes in recent years, and may be subject to significant future changes. Additionally, federal and state regulatory agencies may change the manner in which existing regulations are applied.
Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our disclosure controls and procedures or internal control over financial reporting, such deficiencies may adversely affect us.
Moreover, effective internal 37 Table of Contents controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our disclosure controls and procedures or internal control over financial reporting, such deficiencies may adversely affect us.
These concentrations expose us to the risk that adverse developments in the real estate market, or in the general economic conditions in such areas, or the 24 Table of Contents continuation of such adverse developments, could increase the levels of nonperforming loans and charge-offs, and reduce loan demand and deposit growth. Actual and proposed spending cuts by the U.S.
These concentrations expose us to the risk that adverse developments in the real estate market, or in the general economic conditions in such areas, or the continuation of such adverse developments, could increase the levels of nonperforming loans and charge-offs, and reduce loan demand and deposit growth. Prolonged or repeated shutdowns and actual and proposed spending cuts by the U.S.
As of December 31, 2024, commercial real estate loans represented 344.6% of our total risk-based capital and had increased 19.4 % during the prior 36 months. We cannot guarantee that any risk management practices we implement will be effective to prevent losses relating to our commercial real estate portfolio.
As of December 31, 2025, commercial real estate loans represented 344.6% of our total risk-based capital and had increased 13.3 % during the prior 36 months. We cannot guarantee that any risk management practices we implement will be effective to prevent losses relating to our commercial real estate portfolio.
The nature of fixed-income securities is such that changes in market interest rates impact the value of these assets. Based on the duration of our AFS securities portfolio, a one percent increase or decrease in market rates is projected to negatively or positively impact the market value of the AFS securities portfolio by approximately $3.4 million and $3.4 million, respectively.
The nature of fixed-income securities is such that changes in market interest rates impact the value of these assets. Based on the duration of our AFS securities portfolio, a one percent increase or decrease in market rates is projected to negatively or positively impact the market value of the AFS securities portfolio by approximately $3.2 million in either instance.
We make loans primarily to borrowers in the Washington, D.C. MSA, focusing on the Virginia counties of Arlington, Fairfax, Loudoun and Prince William and the independent cities located within those counties, and Washington D.C. and its Maryland suburbs, and have a substantial portion of our loans secured by real estate.
MSA, focusing on the Virginia counties of Arlington, Fairfax, Loudoun and Prince William and the independent cities located within those counties, and Washington D.C. and its Maryland suburbs, and have a substantial portion of our loans secured by real estate.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window in order to manage our liquidity risk. ​ Unrealized losses in our securities portfolio could affect liquidity. As market interest rates increased in 2022 and 2023, we experienced significant unrealized losses on our available for sale securities portfolio.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window in order to manage our liquidity risk. ​ Unrealized losses in our securities portfolio could affect liquidity. As market interest rates increase, we may experience significant unrealized losses on our available-for-sale securities portfolio.
The fair value of our investment securities can fluctuate due to factors outside of our control. We maintain an investment portfolio consisting of various high-quality liquid fixed-income securities. The total carrying value of the AFS securities portfolio as of December 31, 2024 was $130.3 million and the estimated duration of the portfolio was approximately 3.1 years.
The fair value of our investment securities can fluctuate due to factors outside of our control. We maintain an investment portfolio consisting of various high-quality liquid fixed-income securities. The total carrying value of the available-for-sale securities portfolio as of December 31, 2025 was $123.9 million and the estimated duration of the portfolio was approximately 3.1 years.
Our business depends on our ability to successfully measure and manage credit risk. As a lender, we are exposed to the risk that the principal of, or interest on, a loan will not be paid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover our outstanding exposure.
As a lender, we are exposed to the risk that the principal of, or interest on, a loan will not be paid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover our outstanding exposure.
We have used brokered deposits in the past, and we may continue to use brokered deposits as one of our funding sources to support future growth. As of December 31, 2024, brokered deposits represented approximately 14.6% of our total deposits. Reciprocal deposits represented an additional 17.3% of total liabilities at December 31, 2024.
We have used brokered deposits in the past, and we may continue to use brokered deposits as one of our funding sources to support future growth. As of December 31, 2025, brokered deposits represented approximately 15.3% of our total deposits. Reciprocal deposits represented an additional 18.3% of total deposits at December 31, 2025.
In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. These costs and claims could adversely affect our business, results of operations and prospects.
In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.
Our 10 largest depositor relationships accounted for approximately 17.5% of our deposits at December 31, 2024. Our largest depositor relationship accounted for approximately 3.7% of our deposits at December 31, 2024. These deposits can and do fluctuate substantially.
Our 10 largest depositor relationships accounted for approximately 16.7% of our deposits at December 31, 2025. Our largest depositor relationship accounted for approximately 3.6% of our deposits at December 31, 2025. These deposits can and do fluctuate substantially.
As of December 31, 2024, the allowance for loan credit losses was $18.7 million or 1.00% of total loans, net of unearned income. 23 Table of Contents Deterioration of economic conditions affecting borrowers, new information regarding existing loans, inaccurate management assumptions, identification of additional problem loans, temporary modifications, loan forgiveness, automatic forbearance and other factors, both within and outside of our control, may result in our experiencing higher levels of nonperforming assets and charge-offs, and incurring loan credit losses in excess of our current allowance for loan credit losses, requiring us to make material additions to our allowance for loan credit losses, which could have an adverse effect on our business, financial condition and results of operations.
Deterioration of economic conditions affecting borrowers, new information regarding existing loans, inaccurate management assumptions, identification of additional problem loans, temporary modifications, loan forgiveness, automatic forbearance and other factors, both within and outside of our control, may result in our experiencing higher levels of nonperforming assets and charge-offs, and incurring loan credit losses in excess of our current allowance for loan credit losses, requiring us to make material additions to our allowance for loan credit losses, which could have an adverse effect on our business, financial condition and results of operations.
Lack of seasoning of our loan portfolio could increase risk of credit defaults in the future. As a result of our organic growth over the past several years, as of December 31, 2024, approximately $0.9 billion, or 48.1%, of the loans in our loan portfolio were first originated during the past three years.
Lack of seasoning of our loan portfolio could increase risk of credit defaults in the future. As a result of our organic growth over the past several years, as of December 31, 2025, approximately $738.6 million, or 37.5%, of the loans in our loan portfolio were first originated during the past three years.
These types of loans also involve larger loan balances to a single borrower or groups of related borrowers. These higher credit risks are further heightened when the loans are concentrated in a small number of larger borrowers leading to relationship exposure. As of December 31, 2024, we had 39 relationships with over $10 million of outstanding borrowings with us.
These higher credit risks are further heightened when the loans are concentrated in a small number of larger borrowers leading to relationship exposure. As of December 31, 2025, we had 29 relationships with over $10 million of outstanding loan principal balances with us.
Similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations, such as an exemption from providing selected financial data and an ability to provide simplified executive compensation information and only two years of audited financial statements.
We are also a “smaller reporting company,” as defined in the federal securities laws. Similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations, such as an exemption from providing selected financial data and an ability to provide simplified executive compensation information and only two years of audited financial statements.
At December 31, 2024, we had one non-performing loan that was 90 days past due and still accruing interest. The loan was paid off, in full, on January 7, 2025. We had no non-accrual loans and no OREO at December 31, 2024 or 2023.
At December 31, 2025, we had one loan that was 90 days past due and still accruing interest. We had no non-accrual loans and no OREO at December 31, 2025 or 2024.
Their use also affects interest rates charged on loans or paid on deposits. The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.
The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.
The occurrence of any failures, interruptions or security breaches of the Company’s information systems could damage its reputation, result in a loss of customer business, subject it to additional regulatory scrutiny or expose it to civil litigation and possible financial liability, any of which could have a material adverse effect on results of operations. 33 Table of Contents We are dependent on the use of data and modeling in both our management’s decision-making generally and in meeting regulatory expectations in particular.
The occurrence of any failures, interruptions or security breaches of the Company’s information systems could damage its reputation, result in a loss of customer business, subject it to additional regulatory scrutiny or expose it to civil litigation and possible financial liability, any of which could have a material adverse effect on results of operations.
A substantial portion of our loans are and will continue to be real estate related loans in the Washington, D.C. metropolitan area. Adverse changes in the real estate market or economy in this area could lead to higher levels of problem loans and charge-offs, adversely affecting our earnings and financial condition.
Adverse changes in the real estate market or economy in this area could lead to higher levels of problem loans and charge-offs, adversely affecting our earnings and financial condition. We make loans primarily to borrowers in the Washington, D.C.
The use of statistical and quantitative models and other quantitatively-based analyses is endemic to bank decision making and regulatory compliance processes, and the employment of such analyses is becoming increasingly widespread in our operations.
We are dependent on the use of data and modeling in both our management’s decision-making generally and in meeting regulatory expectations in particular. The use of statistical and quantitative models and other quantitatively-based analyses is endemic to bank decision making and regulatory compliance processes, and the employment of such analyses is becoming increasingly widespread in our operations.
Moreover, the overall market and the price of our common stock may experience volatility due to this lack of liquidity. The market price for our common stock has fluctuated significantly, ranging between $26.52 and $15.00 per share during the 12 months ended December 31, 2024.
Moreover, the overall market and the price of our common stock may experience volatility due to this lack of liquidity. The market price for our common stock has fluctuated during the twelve months ended December 31, 2025, ranging between $21.37 and $14.19 per share.
The average age by loan type for loans originated in the past three years is: commercial real estate loans—1.76 years; commercial and industrial loans—1.31 years; commercial construction loans—0.86 years; and consumer residential loans—1.84 years.
The average age by loan type for loans originated in the past three years is: commercial real estate loans— 1.23 years; commercial and industrial loans— 1.26 years; commercial construction loans— 0.97 years; and residential mortgage loans— 1.33 years.
The leadership of the Federal Reserve has emphasized that their supervisory charge is not to regulate climate concerns, but rather focus on climate-related risks that are faced by banking organizations of all types and sizes, specifically including physical and transition risks, and are in the process of enhancing supervisory expectations through the implementation of climate related regulations and guidelines governing banks' risk management practices, which could result in increased compliance costs and other compliance-related risks.
The leadership of the Federal Reserve has emphasized that their supervisory charge is not to regulate climate concerns, but rather focus on climate-related risks that are faced by banking organizations of all types and sizes, specifically including physical and transition risks, and are in the process of enhancing supervisory expectations through the implementation of climate related regulations and guidelines governing banks' risk management practices, which could result in increased compliance costs and other compliance-related risks. 36 Table of Contents The above measures may also result in the imposition of taxes and fees, the required purchase of emission credits, and the implementation of significant operational changes, each of which may require us to expend significant capital and incur compliance, operating, maintenance and other costs.
We may also borrow funds from third-party lenders, such as other financial institutions. Our access to funding sources in amounts adequate to finance our activities or on acceptable terms could be impaired by factors that affect our organization specifically or the financial services industry or economy in general.
Our access to funding sources in amounts adequate to finance our activities or on acceptable terms could be impaired by factors that affect our organization specifically or the financial services industry or economy in general.
Furthermore, our clients are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.
Furthermore, our clients are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. Higher interest rates reduce the demand for loans and increase the attractiveness of alternative investment and savings products, like U.S.
Risks Related to our Regulatory Environment Our industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a materially adverse effect on our operations.
These costs and claims could adversely affect our business, results of operations and prospects. 34 Table of Contents Risks Related to our Regulatory Environment Our industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a materially adverse effect on our operations.
Our business, financial condition, liquidity or results of operations could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. Risks Related to Our Lending Activities We may not be able to measure and limit our credit risk adequately, which could adversely affect our profitability.
Our business, financial condition, liquidity or results of operations could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.
Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits.
In a declining interest rate environment, there may be an increase in prepayments on loans as borrowers refinance their loans at lower rates. Changes in interest rates also can affect the value of loans, securities and other assets.
In a declining interest rate environment, there may be an increase in prepayments on loans as borrowers refinance their loans at lower rates.
These provisions may discourage potential acquisition proposals and could delay or prevent a change in control, including under circumstances in which our shareholders might otherwise receive a premium over the market price of our shares.
These provisions may discourage potential acquisition proposals and could delay or prevent a change in control, including under circumstances in which our shareholders might otherwise receive a premium over the market price of our shares. 38 Table of Contents An investment in our common stock is not an insured deposit and is not guaranteed by the FDIC, so you could lose some or all of your investment.
In many instances, depositors moved these funds into money market mutual funds or other similar securities accounts in an effort to diversify the risk of further bank failure(s). Uninsured deposits historically have been viewed by the FDIC as less stable than insured deposits.
In many instances, depositors moved these funds into money market mutual funds or other similar securities accounts in an effort to diversify the risk of further bank failure(s). Deposits that were not insured or not collateralized by securities represented 35.1% of our total deposits as of December 31, 2025.
Our 10 largest borrowing relationships accounted for approximately 9.3% of our loans at December 31, 2024. Our largest single borrowing relationship accounted for approximately 1.8% of our loans at December 31, 2024.
Our 10 largest borrowing relationships by outstanding borrowings accounted for approximately 11.7% of our loans at December 31, 2025. Our largest single borrowing relationship accounted for approximately 1.5% of our loans at December 31, 2025.
Monetary policies and regulations of the Federal Reserve could have an adverse effect on our business, financial condition and results of operations. Our earnings and growth are affected by the policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the money supply and credit conditions.
Treasury securities and money market funds, which can make it difficult to attract and retain deposits. Monetary policies and regulations of the Federal Reserve could have an adverse effect on our business, financial condition and results of operations. Our earnings and growth are affected by the policies of the Federal Reserve.
While the Company’s common stock is currently listed on the Nasdaq Capital Market, it has less liquidity than stocks for larger companies listed on national securities exchanges. The trading volume in the Company’s common stock on the Nasdaq Capital Market has been relatively low when compared with larger companies listed on national securities exchanges.
The trading volume in the Company’s common stock on the Nasdaq Capital Market has been relatively low when compared with larger companies listed on national securities exchanges. There is no assurance that a more active and liquid trading market for the common stock will exist in the future.
Moreover, a portion of these loans have been made by us in recent years and the borrowers may not have experienced a complete business or economic cycle. The deterioration of our borrowers’ businesses may hinder their ability to repay their loans with us, which could have an adverse effect on our financial condition and results of operations.
Moreover, a portion of these loans have been made by us in recent years and the borrowers may not have experienced a complete business or economic cycle.
There is no assurance that a more active and liquid trading market for the common stock will exist in the future. Consequently, shareholders may not be able to sell a substantial number of shares for the same price at which shareholders could sell a smaller number of shares.
Consequently, shareholders may not be able to sell a substantial number of shares for the same price at which shareholders could sell a smaller number of shares.
Nevertheless, if delinquencies and defaults increase, we may be required to increase our provision for loan credit losses, which could have an adverse effect on our business, financial condition and results of operations. 26 Table of Contents The appraisals and other valuation techniques we use in evaluating and monitoring loans secured by real property and other real estate owned may not accurately reflect the net value of the asset.
Nevertheless, if delinquencies and defaults increase, we may be required to increase our provision for loan credit losses, which could have an adverse effect on our business, financial condition and results of operations.
Regulatory authorities 38 Table of Contents could impose administratively stricter limitations on the ability of the Bank to pay dividends to us if such limits were deemed appropriate to preserve certain capital adequacy requirements.
Regulatory authorities could impose administratively stricter limitations on the ability of the Bank to pay dividends to us if such limits were deemed appropriate to preserve certain capital adequacy requirements. While the Company’s common stock is currently listed on the Nasdaq Capital Market, it has less liquidity than stocks for larger companies listed on national securities exchanges.
The Bank is under continuous threat of loss due to hacking and cyber-attacks especially as we continue to expand customer capabilities to utilize internet and other remote channels to transact business. Two of the most significant cyber-attack risks that we face are e-fraud and loss of sensitive customer data.
The Bank is under continuous threat of loss due to hacking and cyber-attacks especially as we continue to expand customer capabilities to utilize internet and other remote channels to transact business. We cannot assure that we will not be the victim of successful hacking or cyberattacks in the future that could cause us to suffer material losses.
In considering whether to make a loan secured by real property, we generally require an appraisal of the property.
The appraisals and other valuation techniques we use in evaluating and monitoring loans secured by real property and other real estate owned may not accurately reflect the net value of the asset. In considering whether to make a loan secured by real property, we generally require an appraisal of the property.
While we observed a decrease in exposure year-over-year, as of December 31, 2024, the following loan types accounted for the stated percentages of our loan portfolio: commercial real estate (both owner-occupied and non-owner occupied) - 63.2%; commercial and industrial - 2.6%; and construction and land - 8.8%.
As of December 31, 2025, the following loan types accounted for the stated percentages of our loan portfolio: commercial real estate (both owner-occupied and non-owner occupied) – 59.6%; commercial and industrial – 2.5%; and construction and land – 11.3%. These types of loans also involve larger loan balances to a single borrower or groups of related borrowers.
Any of these risks could expose the Company to liability or adverse legal or regulatory consequences and harm the Company’s reputation and the public perception of its business or the effectiveness of its security measures. ​ Item 1B. Unresolved Staff Comments None.
Any of these risks could expose the Company to liability or adverse legal or regulatory consequences and harm the Company’s reputation and the public perception of its business or the effectiveness of its security measures. ​ We are subject to the potential adverse effects of a U.S. federal government shutdown. ​ A prolonged or repeated shutdown of the U.S. federal government could adversely affect our business, financial condition, liquidity, and results of operations.
Removed
Market conditions or other events could also negatively affect the level or cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, and fund asset growth and new business transactions at a reasonable cost, in a timely manner, and without adverse consequences.
Added
References to past events in these risk factors are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
Removed
The actual borrowing needs of our customers may exceed our expectations, especially during a challenging economic environment when our customers’ companies may be more dependent on our credit commitments due to the lack of available credit elsewhere, the increasing costs of credit, or the limited availability of financings from other sources.
Added
Risks Related to Our Lending Activities We may not be able to measure and limit our credit risk adequately, which could adversely affect our profitability. Our business depends on our ability to successfully measure and manage credit risk.
Removed
Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and proceeds from issuance and sale of our equity and debt securities. Additional liquidity is provided by the ability to borrow from the FHLB, and the Federal Reserve Bank of Richmond (“Reserve Bank”) to fund our operations.
Added
As of December 31, 2025, the allowance for loan credit losses was $19.8 million or 1.00% of total loans, net of unearned income.
Removed
An interagency policy statement issued in July 2023 noted that banks should maintain actionable contingency funding plans that take into account a range of possible stress scenarios, assess the stability of their funding and maintain a broad range of funding sources, ensure that collateral is available for borrowing, and review and revise contingency funding plans periodically and more frequently as market conditions and strategic initiatives change.
Added
The deterioration of our borrowers’ businesses may hinder their ability to repay their loans with us, which could have an adverse effect on our financial condition and results of operations. 25 Table of Contents A substantial portion of our loans are and will continue to be real estate related loans in the Washington, D.C. metropolitan area.
Removed
Deposits that were not insured or not collateralized by securities represented 34.7% of total deposits as of December 31, 2024.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAny third parties used in any cybersecurity processes are vetted through our vendor management process. ​ Risks from Cybersecurity threats or previous incidents have not materially affected business strategy, results of operations, or financial condition.
Biggest changeAny third parties used in any cybersecurity processes are vetted through our vendor management process. ​ Risks from Cybersecurity threats or previous incidents have not materially affected business strategy, results of operations, or financial condition. A vendor management report is presented to the Board of Directors on an annual basis by the Chief Technology and Information Security Officer.
The security of the Company’s network infrastructure is maintained via • internal and perimeter firewalls with intrusion detection, • the use of some network segmentation to isolate access to certain applications and systems, • virtual local area networks, • email filtering to identify spam, malware, and phishing messages in received email messages, • malware detection, • data loss prevention controls to prevent the theft, or mass exfiltration of data, 41 Table of Contents • Virtual Private Networks to control remote access to our network, • intrusion detection capabilities, • network access controls are in place to prevent unauthorized assets from connecting to the network, and • web filtering. ​ Security Event Monitoring .
The security of the Company’s network infrastructure is maintained via • internal and perimeter firewalls with intrusion detection, • the use of some network segmentation to isolate access to certain applications and systems, • virtual local area networks, • email filtering to identify spam, malware, and phishing messages in received email messages, • malware detection, • data loss prevention controls to prevent the theft, or mass exfiltration of data, • Virtual Private Networks to control remote access to our network, • intrusion detection capabilities, • network access controls are in place to prevent unauthorized assets from connecting to the network, and • web filtering. ​ Security Event Monitoring .
Our management is directly involved in assessing and managing cybersecurity risks. 40 Table of Contents ​ The Company uses the National Institute of Standards and Technology Cybersecurity framework (“NIST CF”) for improving critical infrastructure by measuring and evaluating the effectiveness of information and cybersecurity controls. We utilize Payment Card Industry Data Security Standards, and other applicable standards, laws, and regulations.
Our management is directly involved in assessing and managing cybersecurity risks. ​ The Company uses the National Institute of Standards and Technology Cybersecurity framework (“NIST CF”) for improving critical infrastructure by measuring and evaluating the effectiveness of information and cybersecurity controls. We utilize Payment Card Industry Data Security Standards, and other applicable standards, laws, and regulations.
The 24 x 7 monitoring is third-party provided security information and event management tool, and enables threat identification, detects suspicious activity in the environment using a nationally recognized, third-party framework, performs user behavior analytics, and endpoint detection and response. Alerts are investigated to ascertain whether a cyber-incident is occurring or not. ​ Security Awareness .
The 24 x 7 monitoring is third-party provided security information and event management tool, and enables threat identification, 42 Table of Contents detects suspicious activity in the environment using a nationally recognized, third-party framework, performs user behavior analytics, and endpoint detection and response. Alerts are investigated to ascertain whether a cyber-incident is occurring or not. ​ Security Awareness .
On an annual basis, a risk assessment and maturity analysis is performed for the Company based on the NIST CSF Framework. The risk assessment takes into consideration a combination of risks related to the identification, prevention, detection, response, and recovery from cyber events.
On an annual basis, a risk assessment and maturity analysis is performed for the Company based on the NIST CSF Framework. The risk assessment takes into consideration a combination of risks related to the 41 Table of Contents identification, prevention, detection, response, and recovery from cyber events.
Removed
A vendor management report is presented to the Board of Directors on an annual basis by the Chief Technology and Information Security Officer. 42 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWashington St., Ste. 100 Rockville, MD 20850 ​ 2010 Tysons Branch 8229 Boone Blvd., Ste. 102 Tysons, VA 22182 ​ 2016 (1) Suite 200 of the Company’s headquarters was leased starting in 2016. We believe that the current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion.
Biggest changeWashington St., Ste. 100 Rockville, MD 20850 ​ 2010 Tysons Branch 8229 Boone Blvd., Ste. 102 Tysons, VA 22182 ​ 2016 (1) Suite 200 of the Company’s headquarters was leased starting in 2016. 43 Table of Contents We believe that the current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion.
E, Suites 100, 125, 200, and 220 Reston, VA 20190 ​ 2011 1 Other Properties: ​ Reston Branch 1943 Isaac Newton Sq. E, Ste. 150 Reston, VA 20190 ​ 2011 Alexandria Branch 640 Franklin St., Suites 120 and 230 Alexandria, VA 22314 ​ 2013 Arlington Branch 2300 Wilson Blvd., Ste. 120 Arlington, VA 22201 ​ 2014 Washington, D.C.
E, Suites 100, 125, 200, and 220 Reston, VA 20190 ​ 2011 1 Other Properties: ​ Reston Branch 1943 Isaac Newton Sq. E, Ste. 150 Reston, VA 20190 ​ 2011 Alexandria Branch 700 South Washington St. Suites 120 and 230 Alexandria, VA 22314 ​ 2013 Arlington Branch 2300 Wilson Blvd., Ste. 120 Arlington, VA 22201 ​ 2014 Washington, D.C.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough the ultimate outcome of legal proceedings cannot be ascertained at this time, it is the opinion of management that the liabilities (if any) resulting from such legal proceedings will not have an adverse effect on the Company’s business, including its consolidated financial position, results of operations, or cash flows. Item 4.
Biggest changeAlthough the ultimate outcome of legal proceedings cannot be ascertained at this time, it is the opinion of management that the liabilities (if any) resulting from such legal proceedings will not have an adverse effect on the Company’s business, including its consolidated financial position, results of operations, or cash flows. Item 4. Mine Safety Disclosures Not applicable. Part II
Removed
Mine Safety Disclosures Not applicable. 43 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeA discussion of applicable regulatory restrictions on dividends by the Company and the Bank is provided in Item 1 (“Business”) under “Supervision and Regulation – The Company – Limits on Dividends and Other Payments.” On August 18, 2021, the Company’s Board of Directors approved a share repurchase plan (the “Plan”) of up to 5% of outstanding common stock.
Biggest changeA discussion of applicable regulatory restrictions on dividends by the Company and the Bank is provided in Item 1 (“Business”) under “Supervision and Regulation – The Company – Limits on Dividends and Other Payments.” On August 18, 2021, the Company’s Board of Directors approved a share repurchase plan (the “Plan”) of up to 700,000 shares of its common stock, par value of $0.01 per share, or approximately 5% of outstanding shares of common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders of Record Our common stock is currently listed on the Nasdaq Capital Market under the symbol "JMSB." As of February 26, 2025, there were 456 holders of record of our common stock and approximately 2,524 total beneficial shareholders.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders of Record Our common stock is currently listed on the Nasdaq Capital Market under the symbol "JMSB." As of February 18, 2026, there were 434 holders of record of our common stock and approximately 3,506 total beneficial shareholders.
Removed
Dividends On April 24, 2024, the Company declared an annual cash dividend of $0.25 per outstanding share of common stock paid on July 8, 2024 to shareholders of record as of June 28, 2024.
Added
Dividends On January 27, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.09 per share on the Company’s common stock. The dividend is payable on March 4, 2026 to shareholders of record at the close of business on February 11, 2026.
Removed
As announced in the Current Report of Form 8-K filed with the SEC on July 25, 2024, the Plan, which was set to expire August 31, 2024, was extended to August 31, 2025. There were no repurchases under the Plan during the three months ended December 31, 2024. Item 6. [Reserved]
Added
As announced in the Current Report of Form 8-K filed with the SEC on August 19, 2025, the Plan, which was set to expire August 31, 2025, was extended to August 31, 2026. ​ 44 Table of Contents The following table reflects share repurchase activity during the three months ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares Repurchased ​ ​ ​ Average Price Paid Per Share (1) ​ ​ ​ Total Number of Shares Purchased as Part of Publicly Announced Plan ​ ​ ​ Maximum Number of Shares that May Yet Be Purchased Under the Plan October 2025 9,000 ​ $ 19.00 ​ 9,000 ​ 592,894 November 2025 31,102 ​ ​ 18.85 ​ 31,102 ​ 561,792 December 2025 435 ​ ​ 20.26 ​ 435 ​ 561,357 ​ 40,537 ​ $ 18.90 ​ 40,537 ​ ​ ​ ​ (1) The average price paid per share is calculated on a trade date basis for all open market transactions and excludes commissions and other transaction expenses. ​ Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAverage Balance Sheets and Interest Rates on Interest-Earning Assets and Interest-Bearing Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ Interest Income / Average ​ ​ Interest Income / Average (Dollars in thousands) ​ Average Balance ​ Expense ​ Rate ​ Average Balance ​ Expense ​ Rate Assets: ​ ​ ​ ​ ​ Securities: ​ ​ ​ ​ ​ Taxable ​ $ 253,421 $ 5,083 2.01 % $ 368,922 $ 7,506 2.03 % Tax-exempt (1) ​ 1,379 ​ 45 3.26 % 2,351 ​ 68 2.89 % Total securities ​ $ 254,800 ​ $ 5,128 2.01 % $ 371,273 ​ $ 7,574 2.04 % Loans, net of unearned income (2) : ​ ​ ​ ​ ​ Taxable ​ 1,807,547 ​ 95,770 5.30 % 1,764,315 ​ 85,515 4.85 % Tax-exempt (1) ​ 18,389 ​ 712 3.87 % 28,190 ​ 1,164 4.13 % Total loans, net of unearned income ​ $ 1,825,936 ​ $ 96,482 5.28 % $ 1,792,505 ​ $ 86,679 4.84 % Interest-bearing deposits in other banks ​ $ 162,165 ​ $ 8,682 5.35 % $ 126,623 ​ $ 6,776 5.35 % Total interest-earning assets ​ $ 2,242,901 ​ $ 110,292 4.92 % $ 2,290,401 ​ $ 101,029 4.41 % Total non-interest earning assets ​ 15,630 ​ ​ ​ ​ 32,430 ​ ​ ​ ​ Total assets ​ $ 2,258,531 ​ ​ ​ ​ $ 2,322,831 ​ ​ ​ ​ Liabilities & Shareholders’ Equity: ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ NOW accounts ​ $ 322,028 ​ $ 8,848 2.75 % $ 299,468 ​ $ 6,804 2.27 % Money market accounts ​ 342,057 ​ 10,707 3.13 % 362,243 ​ 10,150 2.80 % Savings accounts ​ 48,466 ​ 664 1.37 % 69,742 ​ 831 1.19 % Time deposits ​ 757,494 ​ 34,273 4.52 % 842,121 ​ 29,383 3.49 % Total interest-bearing deposits ​ $ 1,470,045 ​ $ 54,492 3.71 % $ 1,573,574 ​ $ 47,168 3.00 % Federal funds purchased ​ ​ 28 ​ ​ 2 ​ 7.14 % ​ 302 ​ ​ 15 ​ 4.97 % Subordinated debt ​ 24,747 ​ 1,396 5.64 % 24,664 ​ 1,396 5.66 % Federal Reserve Bank borrowings ​ ​ 51,314 ​ ​ 2,451 ​ 4.78 % ​ 34,176 ​ ​ 1,640 ​ 4.80 % Federal Home Loan Bank advances ​ 18,361 ​ 745 4.06 % 1,487 ​ 67 4.51 % Total interest-bearing liabilities ​ $ 1,564,495 ​ $ 59,086 3.78 % $ 1,634,203 ​ $ 50,286 3.08 % Demand deposits ​ 437,694 ​ ​ ​ ​ 447,804 ​ ​ ​ ​ Other liabilities ​ 17,261 ​ ​ ​ ​ 18,791 ​ ​ ​ ​ Total liabilities ​ $ 2,019,450 ​ ​ ​ ​ $ 2,100,798 ​ ​ ​ ​ Shareholders’ equity ​ $ 239,081 ​ ​ ​ ​ $ 222,033 ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 2,258,531 ​ ​ ​ ​ $ 2,322,831 ​ ​ ​ ​ Tax-equivalent net interest income and spread (Non-GAAP)(1) ​ ​ ​ ​ $ 51,206 ​ 1.14 % ​ ​ ​ ​ 50,743 ​ 1.33 % Less: tax-equivalent adjustment ​ ​ ​ ​ ​ 159 ​ ​ ​ ​ ​ ​ $ 259 ​ ​ ​ Net interest income and spread (GAAP) ​ ​ ​ ​ $ 51,047 ​ 1.13 % ​ ​ ​ ​ 50,484 ​ 1.32 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income/earnings assets ​ ​ ​ ​ ​ ​ ​ 4.91 % ​ ​ ​ ​ ​ ​ 4.40 % Interest expense/earning assets ​ ​ ​ ​ ​ ​ ​ 2.63 % ​ ​ ​ ​ ​ ​ 2.20 % Net interest margin ​ ​ ​ ​ ​ ​ ​ 2.28 % ​ ​ ​ ​ ​ ​ 2.20 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-equivalent interest income/earnings assets (Non-GAAP)(1) ​ ​ ​ ​ ​ ​ ​ 4.92 % ​ ​ ​ ​ ​ ​ 4.41 % Interest expense/earning assets ​ ​ ​ ​ ​ ​ ​ 2.63 % ​ ​ ​ ​ ​ ​ 2.20 % Tax-equivalent net interest margin (Non-GAAP)(3) ​ ​ ​ ​ ​ ​ ​ 2.28 % ​ ​ ​ ​ ​ ​ 2.21 % 49 Table of Contents (1) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory tax rate of 21%.
Biggest changeAverage Balance Sheets and Interest Rates on Interest-Earning Assets and Interest-Bearing Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ For the Year Ended ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Income / ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ Interest Income / ​ ​ ​ Average (Dollars in thousands) ​ Average Balance ​ Expense ​ Rate ​ Average Balance ​ Expense ​ Rate Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ $ 224,275 $ 4,682 2.09 % $ 253,421 $ 5,083 2.01 % Tax-exempt (1) ​ 1,378 ​ 45 3.27 % 1,379 ​ 45 3.26 % Total securities ​ $ 225,653 ​ $ 4,727 2.09 % $ 254,800 ​ $ 5,128 2.01 % Loans, net of unearned income (2) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 1,881,636 ​ 102,086 5.43 % 1,807,547 ​ 95,770 5.30 % Tax-exempt (1) ​ 17,428 ​ 716 4.11 % 18,389 ​ 712 3.87 % Total loans, net of unearned income ​ $ 1,899,064 ​ $ 102,802 5.41 % $ 1,825,936 ​ $ 96,482 5.28 % Interest-bearing deposits in other banks ​ $ 135,714 ​ $ 5,888 4.34 % $ 162,165 ​ $ 8,682 5.35 % Total interest-earning assets ​ $ 2,260,431 ​ $ 113,417 5.01 % $ 2,242,901 ​ $ 110,292 4.91 % Total non-interest earning assets ​ 13,288 ​ ​ ​ ​ ​ 15,630 ​ ​ ​ ​ ​ ​ Total assets ​ $ 2,273,719 ​ ​ ​ ​ ​ $ 2,258,531 ​ ​ ​ ​ ​ ​ Liabilities & Shareholders’ Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOW accounts ​ $ 353,556 ​ $ 8,115 2.30 % $ 322,028 ​ $ 8,848 2.75 % Money market accounts ​ 352,226 ​ 9,383 2.66 % 342,057 ​ 10,707 3.13 % Savings accounts ​ 41,227 ​ 422 1.02 % 48,466 ​ 664 1.37 % Time deposits ​ 733,433 ​ 31,107 4.24 % 757,494 ​ 34,273 4.52 % Total interest-bearing deposits ​ $ 1,480,442 ​ $ 49,027 3.31 % $ 1,470,045 ​ $ 54,492 3.71 % Federal funds purchased ​ ​ 46 ​ ​ 2 ​ 4.35 % ​ 28 ​ ​ 2 ​ 7.14 % Subordinated debt ​ 24,831 ​ 1,396 5.62 % 24,747 ​ 1,396 5.64 % Federal Reserve Bank borrowings ​ ​ — ​ ​ — ​ N/M ​ ​ 51,314 ​ ​ 2,451 ​ 4.78 % Federal Home Loan Bank advances ​ 56,000 ​ 2,268 4.05 % 18,361 ​ 745 4.06 % Total interest-bearing liabilities ​ $ 1,561,319 ​ $ 52,693 3.37 % $ 1,564,495 ​ $ 59,086 3.78 % Demand deposits ​ 438,171 ​ ​ ​ ​ ​ 437,694 ​ ​ ​ ​ ​ Other liabilities ​ 17,322 ​ ​ ​ ​ ​ 17,261 ​ ​ ​ ​ ​ Total liabilities ​ $ 2,016,812 ​ ​ ​ ​ ​ $ 2,019,450 ​ ​ ​ ​ ​ Shareholders’ equity ​ $ 256,907 ​ ​ ​ ​ ​ $ 239,081 ​ ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 2,273,719 ​ ​ ​ ​ ​ $ 2,258,531 ​ ​ ​ ​ ​ Tax-equivalent net interest income and spread (Non-GAAP) (1) ​ ​ ​ ​ $ 60,724 ​ 1.64 % ​ ​ ​ $ 51,206 ​ 1.13 % Less: tax-equivalent adjustment ​ ​ ​ ​ ​ 160 ​ ​ ​ ​ ​ ​ ​ 159 ​ ​ ​ Net interest income and spread (GAAP) ​ ​ ​ ​ $ 60,564 ​ 1.64 % ​ ​ ​ $ 51,047 ​ 1.13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income/earnings assets ​ ​ ​ ​ ​ ​ ​ 5.01 % ​ ​ ​ ​ ​ ​ 4.91 % Interest expense/earning assets ​ ​ ​ ​ ​ ​ ​ 2.33 % ​ ​ ​ ​ ​ ​ 2.63 % Net interest margin ​ ​ ​ ​ ​ ​ ​ 2.68 % ​ ​ ​ ​ ​ ​ 2.28 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-equivalent interest income/earnings assets (Non-GAAP) (1) ​ ​ ​ ​ ​ ​ ​ 5.01 % ​ ​ ​ ​ ​ ​ 4.91 % Interest expense/earning assets ​ ​ ​ ​ ​ ​ ​ 2.33 % ​ ​ ​ ​ ​ ​ 2.63 % Tax-equivalent net interest margin (Non-GAAP) (3) ​ ​ ​ ​ ​ ​ ​ 2.68 % ​ ​ ​ ​ ​ ​ 2.28 % (1) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory tax rate of 21%.
Certain policies inherently rely more extensively on the use of estimates, assumptions, and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported. The following is a discussion of the critical accounting policy and significant estimate that require us to make complex and subjective judgments.
Certain policies inherently rely more extensively on the use of estimates, assumptions, and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported. The following is a discussion of a critical accounting policy and significant estimate that require us to make complex and subjective judgments.
The allowance for loan credit losses is measured and recorded upon the initial recognition of a financial asset. The allowance for loan credit losses is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recovery of) credit losses, which is recorded in the Consolidated Statements of Income.
The allowance for loan credit losses is measured and recorded upon the initial recognition of a financial asset. The allowance for loan credit losses is reduced by charge-offs, net of recoveries of previous charge-offs, and is increased or decreased by a provision for (or recovery of) credit losses, which is recorded in the Consolidated Statements of Income.
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.
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 Federal Reserve Bank.
(2) The Company did not have any loans on non-accrual as of December 31, 2024 or December 31, 2023. (3) Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets.
(2) The Company did not have any loans on non-accrual as of December 31, 2025 or December 31, 2024. (3) Tax-equivalent net interest margin adjusts for differences in tax treatment of interest income sources. The entire tax-equivalent adjustment is attributable to interest income on earning assets.
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 consist of checking accounts, NOW accounts, money market accounts, savings accounts, time deposits, reciprocal IntraFi Demand ® deposits, IntraFi Money Market ® deposits and IntraFi CD ® deposits.
Interest-bearing deposits represented 77.1% and 78.4% of total deposits at December 31, 2024 and December 31, 2023, respectively. The Company focuses on funding asset growth with deposit accounts, with an emphasis on core deposit growth, as its primary source of deposits.
Interest-bearing deposits represented 78.1% and 77.1% of total deposits at December 31, 2025 and December 31, 2024, respectively. The Company focuses on funding asset growth with deposit accounts, with an emphasis on core deposit growth, as its primary source of deposits.
Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components. ​ Net interest margin as presented above is calculated by dividing tax-equivalent net interest income by total average earning assets.
Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the tax-equivalent components. 51 Table of Contents ​ Net interest margin as presented above is calculated by dividing tax-equivalent net interest income by total average earning assets.
Where the non-GAAP financial measure is used, the comparable GAAP financial measure, as well as reconciliation to that comparable 44 Table of Contents GAAP financial measure, a statement of the company’s reasons for utilizing the non-GAAP financial measure, can be found within this discussion and analysis.
Where the non-GAAP financial measure is used, the comparable GAAP financial measure, as well as reconciliation to that comparable GAAP financial measure, a statement of the company’s reasons for utilizing the non-GAAP financial measure, can be found within this discussion and analysis.
The Chief Credit Officer is responsible for establishing credit risk policies and procedures, including underwriting and hold guidelines and credit approval authority, and monitoring credit exposure and performance of the Company’s lending-related transactions. 56 Table of Contents The Company’s asset quality remained strong during the year ended December 31, 2024.
The Chief Credit Officer is responsible for establishing credit risk policies and procedures, including underwriting and hold guidelines and credit approval authority, and monitoring credit exposure and performance of the Company’s lending-related transactions. 58 Table of Contents The Company’s asset quality remained strong during the year ended December 31, 2025.
At December 31, 2024, the allowance for loan credit losses was $18.7 million, or 1.00% of outstanding loans, net of unearned income, compared to $19.5 million, or 1.05% of outstanding loans, net of unearned income, at December 31, 2023.
At December 31, 2025, the allowance for loan credit losses was $19.8 million, or 1.00% 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.
These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral.
These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under the current expected credit loss model (“CECL,”) for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral.
Note 16 to the Consolidated Financial Statements, included in Item 8 of this Form 10-K, contains additional discussion and analysis regarding the Company and Bank’s regulatory capital requirements. Shareholders’ equity increased $16.7 million or 7.3% to $246.6 million at December 31, 2024 compared to $229.9 million at December 31, 2023.
Note 16 to the Consolidated Financial Statements, included in Item 8 of this Form 10-K, contains additional discussion and analysis regarding the Company and Bank’s regulatory capital requirements. Shareholders’ equity increased $19.0 million or 7.7% to $265.6 million at December 31, 2025 compared to $246.6 million at December 31, 2024.
The following table summarizes the Company’s loan credit loss experience by loan portfolio for the years ended December 31, 2024 and December 31, 2023. 57 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ Net ​ Net ​ Net ​ Net ​ ​ (charge-offs) ​ (charge-off) ​ (charge-offs) ​ (charge-off) (Dollars in thousands) recoveries recovery rate (1) recoveries recovery rate (1) Real estate loans: ​ ​ ​ ​ Commercial ​ $ — ​ — ​ $ — — % Construction and land development ​ — ​ — ​ — — ​ Residential ​ — ​ — ​ — — ​ Commercial loans ​ 2 ​ 0.01 % 2 0.01 % Consumer loans ​ — ​ — ​ — — ​ Total ​ $ 2 ​ ​ ​ ​ $ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average loans outstanding during the period ​ $ 1,825,936 ​ ​ ​ ​ $ 1,792,505 ​ Allowance coverage ratio (2) ​ ​ ​ 1.00 % 1.05 % Total net (charge-off) recovery rate ​ ​ ​ 0.00 % 0.00 % Allowance to nonaccrual loans ratio (3) ​ ​ ​ NM ​ NM ​ NM – Not meaningful (1) The net (charge-off) recovery rate is calculated by dividing total net (charge-offs) recoveries during the period by average gross loans outstanding during the period.
The following table summarizes the Company’s loan credit loss experience by loan portfolio for the years ended December 31, 2025 and December 31, 2024. 59 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ Net ​ Net ​ Net ​ Net ​ ​ (charge-offs) ​ (charge-off) ​ (charge-offs) ​ (charge-off) (Dollars in thousands) ​ ​ ​ recoveries ​ ​ ​ recovery rate (1) ​ ​ ​ recoveries ​ ​ ​ recovery rate (1) Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ — ​ — ​ $ — — ​ Construction and land development ​ — ​ — ​ — — ​ Residential ​ — ​ — ​ — — ​ Commercial loans ​ (359) ​ (0.84) % 2 0.01 % Consumer loans ​ — ​ — ​ — — ​ Total ​ $ (359) ​ ​ ​ ​ $ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average loans outstanding during the period ​ $ 1,899,064 ​ ​ ​ ​ $ 1,825,936 ​ ​ Allowance coverage ratio (2) ​ ​ ​ 1.00 % ​ 1.00 % Total net (charge-off) recovery rate ​ ​ ​ (0.02) % ​ 0.00 % Allowance to nonaccrual loans ratio (3) ​ ​ ​ N/M ​ ​ N/M ​ NM – Not meaningful (1) The net (charge-off) recovery rate is calculated by dividing total net (charge-offs) recoveries during the period by average gross loans outstanding during the period.
Provision Expense The Company recorded a $0.4 million recovery of provision for credit losses for the year ended December 31, 2024 compared to a $3.3 million recovery of provision for the year ended December 31, 2023.
Provision Expense The Company recorded a $1.7 million provision for credit losses for the year ended December 31, 2025 compared to a $0.4 million recovery of provision for the year ended December 31, 2024.
Within the quantitative portion of the calculation, the Company utilizes at least one or a combination of loss drivers, which may include unemployment rates, home price indices, and/or gross domestic product, to adjust its loss rates over a reasonable and supportable forecast period of one year.
Within the quantitative portion of the calculation, the Company utilizes at least one or a combination of economic variables, such as unemployment rates, home price indices, and/or gross domestic product, to adjust its loss rates over a reasonable and supportable forecast period of one year.
Principal repayments consisted of $18.8 million of mortgage-backed securities and $6.4 million of collateralized mortgage obligation securities. 54 Table of Contents The following table summarizes the amortized cost and fair value of the Company’s fixed income investment portfolio as of December 31, 2024 and December 31, 2023, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 ​ ​ Amortized ​ Fair ​ Amortized ​ Fair (Dollars in thousands) Cost Value Cost Value Held-to-maturity ​ ​ ​ ​ U.S.
Principal repayments consisted of $19.3 million of mortgage-backed securities and $7.6 million of collateralized mortgage obligation securities. 56 Table of Contents The following table summarizes the amortized cost and fair value of the Company’s fixed income investment portfolio as of December 31, 2025 and December 31, 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ ​ Amortized ​ Fair ​ Amortized ​ Fair (Dollars in thousands) ​ ​ ​ Cost ​ ​ ​ Value ​ ​ ​ Cost ​ ​ ​ Value Held-to-maturity ​ ​ ​ ​ ​ ​ ​ ​ U.S.
As a result, the Company did not have any interest income that would have been recognized on nonaccrual loans for the years ended December 31, 2024 or December 31, 2023. The Company made one loan modification to a borrower experiencing financial difficulty during the twelve months ended December 31, 2024.
As a result, the Company did not have any interest income that would have been recognized on nonaccrual loans for the years ended December 31, 2025 or December 31, 2024. The Company did not make any loan modifications to borrowers experiencing financial difficulty during the twelve months ended December 31, 2025.
The following table summarizes the Company’s asset quality as of December 31, 2024 and December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) December 31, 2024 December 31, 2023 Nonaccrual loans ​ $ — ​ $ — ​ Loans past due 90 days and accruing interest ​ 9,978 ​ — ​ Other real estate owned and repossessed assets ​ — ​ — ​ Total nonperforming assets ​ $ 9,978 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan credit losses to nonperforming assets ​ NM ​ NM ​ Nonaccrual loans to gross loans ​ 0.00 % 0.00 % Nonperforming assets to period end loans and OREO ​ 0.53 % 0.00 % NM – Not meaningful Allowance for Loan Credit Losses Refer to the discussion in the “Critical Accounting Policies and Estimates” section above for management’s approach to estimating the allowance for loan credit losses.
The following table summarizes the Company’s asset quality as of December 31, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Nonaccrual loans ​ $ — ​ $ — ​ Loans past due 90 days and accruing interest ​ 1,084 ​ 9,978 ​ Other real estate owned and repossessed assets ​ — ​ — ​ Total nonperforming assets ​ $ 1,084 ​ $ 9,978 ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan credit losses to nonperforming assets ​ 18.3 x 1.9 x Nonaccrual loans to total loans ​ 0.00 % 0.00 % Nonperforming loans to total loans ​ 0.05 % 0.53 % ​ Allowance for Loan Credit Losses Refer to the discussion in the “Critical Accounting Policies and Estimates” section above for management’s approach to estimating the allowance for loan credit losses.
Overview We are a bank holding company headquartered in Reston, Virginia primarily serving the Washington, D.C. metropolitan area. The material business operations of our organization are performed through the Bank. As a result, the discussion and analysis within this section primarily relate to activities conducted at the Bank.
Overview John Marshall Bancorp, Inc. is a bank holding company headquartered in Reston, Virginia primarily serving the Washington, D.C. metropolitan area. The material business operations of the Company are performed through its only subsidiary, John Marshall Bank. As a result, the discussion and analysis within this section primarily relate to activities conducted at the Bank.
To further adjust the allowance for credit losses for expected losses not already included within the quantitative component of the calculation, the Company may consider qualitative factors, including but not limited to: variability in the economic forecast, changes in volume and severity of adversely classified loans, changes in concentrations of credit, changes in the nature and volume of the loan segments, factors related to credit administration, and other idiosyncratic risks not embedded in the data used in the model. 45 Table of Contents Loans that do not share risk characteristics are evaluated on an individual basis.
To further adjust the allowance for credit losses for expected losses not already included within the quantitative component of the calculation, the Company may consider qualitative factors, including but not limited to: variability in the economic forecast, changes in volume and severity of adversely classified loans, changes in concentrations of loan portfolio, changes in the nature and volume of the loan segments, factors related to credit administration, and other idiosyncratic risks not embedded in the data used in the model.
The Company recorded net recoveries of $2 thousand during the year ended December 31, 2024 compared to net recoveries of $2 thousand during the year ended December 31, 2023.
The Company recorded net charge-offs of $359 thousand during the year ended December 31, 2025 compared to net recoveries of $2 thousand during the year ended December 31, 2024.
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.
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 net interest margin.
The Company’s available-for-sale investment portfolio had an estimated weighted average remaining life of approximately 3.1 years and 3.0 years in the prevailing rate environments as of December 31, 2024 and December 31, 2023, respectively.
The Company’s available-for-sale investment portfolio had an estimated weighted average remaining life of approximately 3.1 years in the prevailing rate environments at both December 31, 2025 and December 31, 2024. The held-to-maturity investment portfolio had an estimated weighted average remaining life of approximately 5.2 years and 6.0 years as of December 31, 2025 and December 31, 2024, respectively.
Included in these amounts were $157.4 million and $168.7 million of public fund deposits that are collateralized by securities as of December 31, 2024 and December 31, 2023, respectively. Deposits that were not insured or not collateralized by securities represented 35% and 33% of total deposits, respectively, as of December 31, 2024 and December 31, 2023.
Included in these amounts were $161.8 million and $157.4 million of public fund deposits that are collateralized by securities as of December 31, 2025 and December 31, 2024, respectively. Deposits that were not insured or not collateralized by securities represented 35.1% of total deposits at both December 31, 2025 and December 31, 2024.
The Company had $45.6 million in maturities and principal repayments on securities during the year ended December 31, 2024. Maturities consisted of $17.0 million in U.S. treasuries, $3.0 million in U.S. agency, and $0.3 million in municipal -taxable.
The Company had $47.0 million in maturities and principal repayments on securities during the year ended December 31, 2025. Maturities consisted of $14.8 million in U.S. treasuries, $5.0 million in U.S. agency securities, and $0.3 million in municipal-taxable securities.
Total borrowings as of December 31, 2024 consisted of subordinated debt totaling $24.8 million and the FHLB advances. Total liquidity, defined as cash and cash equivalents, unencumbered securities at fair value, and available secured borrowing capacity, was $727.3 million at December 31, 2024 compared to $638.9 million at December 31, 2023.
In addition to outstanding FHLB advances, total borrowings as of December 31, 2025 included subordinated debt totaling $24.9 million. Total liquidity, defined as cash and cash equivalents, unencumbered securities at fair value, and available secured borrowing capacity, was $827.0 million at December 31, 2025 compared to $727.3 million at December 31, 2024.
Specifically, the Company has pledged a portion of its loan portfolio to the FHLB and the Reserve Bank. Based on collateral pledged as of December 31, 2024, the total FHLB available borrowing capacity was $462.2 million. Additional borrowing capacity with the Reserve Bank was approximately $104.0 million as of December 31, 2024.
Specifically, the Company has pledged a portion of its loan portfolio to the FHLB and the Federal Reserve Bank. Based on collateral pledged as of December 31, 2025, the total FHLB available borrowing capacity was $454.8 million. Additional borrowing capacity with the Federal Reserve Bank was approximately $139.5 million as of December 31, 2025.
(2) The Company did not have any loans on non-accrual as of December 31, 2024 or December 31, 2023. ​ Interest Income Interest income increased by $9.3 million or 9.2% to $110.3 million on a fully tax-equivalent basis for the year ended December 31, 2024 compared to $101.0 million for the year ended December 31, 2023, driven by an increase in rates which was partially offset by decrease in volume on interest-earning assets.
(2) The Company did not have any loans on non-accrual as of December 31, 2025 or December 31, 2024. ​ Interest Income Interest income increased by $3.1 million or 2.8% to $113.4 million on a fully tax-equivalent basis for the year ended December 31, 2025 compared to $110.3 million for the year ended December 31, 2024, driven by an increase in volume and rates on interest-earning assets.
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.
For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated to volume.
Deposits Total deposits decreased $14.2 million or 0.7% to $1.89 billion as of December 31, 2024 compared to $1.91 billion as of December 31, 2023. Non-interest bearing demand deposits increased $21.9 million or 5.3% to $433.3 million as of December 31, 2024 compared to $411.4 million at December 31, 2023.
Deposits Total deposits increased $79.9 million or 4.2% to $1.97 billion as of December 31, 2025 compared to $1.89 billion as of December 31, 2024. Non-interest bearing demand deposits decreased $0.6 million or 0.1% to $432.7 million as of December 31, 2025 compared to $433.3 million at December 31, 2024.
(3) The allowance to nonaccrual loans ratio is calculated by dividing the allowance for loan credit losses at the end of the period by nonaccrual loans at the end of the period. ​ The following table summarizes the allowance for loan credit losses by portfolio with a comparison of the percentage composition in relation to total allowance for loan credit losses and total loans as of December 31, 2024 and December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Allowance ​ Percent of Allowance ​ Percent of Loans in ​ ​ for Loan Credit ​ in Each Category to ​ Each Category to Total (Dollars in thousands) ​ Losses ​ Total Allocated Allowance ​ Loans Real Estate Loans: ​ ​ ​ Commercial ​ $ 11,732 62.69 % 63.24 % Construction and land development ​ 1,761 9.41 % 8.83 % Residential ​ 4,594 24.54 % 25.32 % Commercial - Non-Real Estate: ​ ​ Commercial loans ​ 548 2.93 % 2.56 % Consumer - Non-Real Estate: ​ ​ Consumer loans ​ 80 0.43 % 0.05 % Total ​ $ 18,715 100.00 % 100.00 % ​ 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ Allowance Percent of Allowance Percent of Loans in ​ ​ for Loan Credit ​ in Each Category to ​ Each Category to Total (Dollars in thousands) ​ Losses ​ Total Allocated Allowance ​ Loans Real Estate Loans: ​ ​ ​ Commercial ​ $ 12,841 65.71 % 61.79 % Construction and land development ​ 1,787 9.14 % 9.75 % Residential ​ 4,323 22.12 % 25.99 % Commercial - Non-Real Estate: ​ ​ ​ Commercial loans ​ 495 2.53 % 2.44 % Consumer - Non-Real Estate: ​ ​ ​ Consumer loans ​ 97 0.50 % 0.03 % Total ​ $ 19,543 100.00 % 100.00 % ​ Management believes that the allowance for loan credit losses is adequate to absorb lifetime credit losses inherent in the portfolio as of December 31, 2024.
(3) The allowance to nonaccrual loans ratio is calculated by dividing the allowance for loan credit losses at the end of the period by nonaccrual loans at the end of the period. ​ The following table summarizes the allowance for loan credit losses by portfolio with a comparison of the percentage composition in relation to total allowance for loan credit losses and total loans as of December 31, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Allowance ​ Percent of Allowance ​ Percent of Loans in ​ ​ for Loan Credit ​ in Each Category to ​ Each Category to Total (Dollars in thousands) ​ Losses ​ Total Allocated Allowance ​ Loans Real Estate Loans: ​ ​ ​ ​ ​ ​ Commercial ​ $ 11,177 56.43 % 59.57 % Construction and land development ​ 3,014 15.22 % 11.30 % Residential ​ 5,018 25.34 % 26.54 % Commercial - Non-Real Estate: ​ ​ ​ ​ ​ Commercial loans ​ 564 2.85 % 2.54 % Consumer - Non-Real Estate: ​ ​ ​ ​ ​ Consumer loans ​ 32 0.16 % 0.05 % Total ​ $ 19,805 100.00 % 100.00 % ​ 60 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Allowance ​ ​ ​ Percent of Allowance ​ ​ ​ Percent of Loans in ​ ​ for Loan Credit ​ in Each Category to ​ Each Category to Total (Dollars in thousands) ​ Losses ​ Total Allocated Allowance ​ Loans Real Estate Loans: ​ ​ ​ ​ ​ Commercial ​ $ 11,732 62.69 % 63.24 % Construction and land development ​ 1,761 9.41 % 8.83 % Residential ​ 4,594 24.54 % 25.32 % Commercial - Non-Real Estate: ​ ​ ​ ​ ​ Commercial loans ​ 548 2.93 % 2.56 % Consumer - Non-Real Estate: ​ ​ ​ ​ ​ Consumer loans ​ 80 0.43 % 0.05 % Total ​ $ 18,715 100.00 % 100.00 % ​ Management believes that the allowance for loan credit losses is adequate to absorb lifetime credit losses inherent in the portfolio as of December 31, 2025.
For further information, see Note 11 to the Consolidated Financial Statements, included in Item 8 of this Form 10-K, for further discussion of the nature, business purpose and elements of risk involved with these off-balance sheet arrangements.
For further information, see Note 11 to the Consolidated Financial Statements, included in Item 8 of this Form 10-K, for further discussion of the nature, business purpose and elements of risk involved with these off-balance sheet arrangements. 63 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not required for smaller reporting companies.
The selected balance sheet data as of December 31, 2024 and 2023 and the selected income statement data for the years ended December 31, 2024 and 2023 have been derived from our audited consolidated financial statements included elsewhere in this Form 10-K and should be read in conjunction with the other information contained in this Form 10-K, including the information contained within this “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8 – Financial Statements and Supplementary Data.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of or for the Twelve Months Ended ​ (Dollars in thousands, except per share data) December 31, 2024 December 31, 2023 Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Loans, net of unearned income ​ $ 1,872,173 ​ $ 1,859,967 ​ Allowance for loan credit losses ​ 18,715 ​ 19,543 ​ Total assets ​ 2,234,947 ​ 2,242,549 ​ Deposits ​ 1,892,415 ​ 1,906,600 ​ Shareholders’ equity ​ 246,614 ​ 229,914 ​ Asset Quality Data: ​ ​ ​ Net (charge-offs) recoveries to average total loans, net of unearned income ​ 0.00 % 0.00 % Allowance for loan credit losses to nonperforming loans ​ 0.00 % 0.00 % Allowance for loan credit losses to total gross loans net of unearned income ​ 1.00 % 1.05 % Non-performing assets to total assets ​ 0.45 % 0.00 % Non-performing loans to total loans ​ 0.53 % 0.00 % Capital Ratios (Bank level): ​ ​ ​ Equity-to-total assets ratio ​ ​ 11.9 % ​ 11.1 % Total risk-based capital ratio ​ 16.2 % 15.7 % Tier 1 risk-based capital ratio ​ 15.2 % 14.7 % Common equity tier 1 ratio ​ ​ 15.2 % ​ 14.7 % Leverage ratio ​ 12.4 % 11.6 % Income Statement Data: ​ ​ ​ Interest and dividend income ​ $ 110,133 ​ $ 100,770 ​ Interest expense ​ 59,086 ​ 50,286 ​ Net interest income ​ $ 51,047 ​ $ 50,484 ​ Provision for (recovery of) credit losses ​ (370) ​ (3,252) ​ Non-interest income (loss) ​ 2,271 ​ (14,940) ​ Non-interest expense ​ 31,809 ​ 30,815 ​ Income before taxes ​ $ 21,879 ​ $ 7,981 ​ Income tax expense ​ 4,758 ​ 2,823 ​ Net income ​ $ 17,121 ​ $ 5,158 ​ Per Share Data and Shares Outstanding: ​ ​ ​ Weighted average common shares (basic) ​ 14,172,166 ​ 14,076,925 ​ Weighted average common shares (diluted) ​ 14,206,109 ​ 14,147,193 ​ Common shares outstanding ​ 14,269,469 ​ 14,148,533 ​ Earnings per share, basic ​ $ 1.20 ​ $ 0.37 ​ Earnings per share, diluted ​ $ 1.20 ​ $ 0.36 ​ Book value per share ​ $ 17.28 ​ $ 16.25 ​ Performance Ratios: ​ ​ ​ ​ Return on average assets ("ROAA") (1) ​ 0.76 % 0.22 % Return on average equity ("ROAE") (2) ​ 7.16 % 2.32 % Net interest margin ​ 2.28 % 2.20 % Tax-equivalent net interest margin (Non-GAAP) (3) ​ ​ 2.28 % ​ 2.21 % Non-interest expense to average assets (4) ​ ​ 1.41 % ​ 1.33 % Efficiency ratio (5) ​ 59.7 % 86.7 % 47 Table of Contents (1) ROAA is calculated by dividing net income by year-to-date average assets.
The selected balance sheet data as of December 31, 2025 and 2024 and the selected income statement data for the years ended December 31, 2025 and 2024 have been derived from our audited consolidated financial statements included elsewhere in this Form 10-K and should be read in conjunction with the other information contained in this Form 10-K, including the information contained within this “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8 – Financial Statements and Supplementary Data.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of or for the Twelve Months Ended ​ (Dollars in thousands, except per share data) ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Loans, net of unearned income ​ $ 1,975,360 ​ $ 1,872,173 ​ Allowance for loan credit losses ​ 19,805 ​ 18,715 ​ Total assets ​ 2,332,550 ​ 2,234,947 ​ Deposits ​ 1,972,285 ​ 1,892,415 ​ Shareholders’ equity ​ 265,638 ​ 246,614 ​ Asset Quality Data: ​ ​ ​ ​ ​ Net (charge-offs) recoveries to average total loans, net of unearned income ​ (0.02) % 0.00 % Allowance for loan credit losses to nonperforming assets ​ 18.3 x ​ 1.9 x Allowance for loan credit losses to total gross loans net of unearned income ​ 1.00 % 1.00 % Non-performing assets to total assets ​ 0.05 % 0.45 % Non-performing loans to total loans ​ 0.05 % 0.53 % Capital Ratios (Bank level): ​ ​ ​ ​ ​ Equity-to-total assets ratio ​ ​ 12.2 % ​ 11.9 % Total risk-based capital ratio ​ 16.3 % 16.2 % Tier 1 risk-based capital ratio ​ 15.2 % 15.2 % Common equity tier 1 ratio ​ ​ 15.2 % ​ 15.2 % Leverage ratio ​ 12.5 % 12.4 % Income Statement Data: ​ ​ ​ ​ ​ Interest and dividend income ​ $ 113,257 ​ $ 110,133 ​ Interest expense ​ 52,693 ​ 59,086 ​ Net interest income ​ $ 60,564 ​ $ 51,047 ​ Provision for (recovery of) credit losses ​ 1,688 ​ (370) ​ Non-interest income ​ 2,074 ​ 2,271 ​ Non-interest expense ​ 33,567 ​ 31,809 ​ Income before taxes ​ $ 27,383 ​ $ 21,879 ​ Income tax expense ​ 6,150 ​ 4,758 ​ Net income ​ $ 21,233 ​ $ 17,121 ​ Per Share Data and Shares Outstanding: ​ ​ ​ ​ ​ Weighted average common shares (basic) ​ 14,189,522 ​ 14,172,166 ​ Weighted average common shares (diluted) ​ 14,194,603 ​ 14,206,109 ​ Common shares outstanding ​ 14,214,603 ​ 14,269,469 ​ Earnings per share, basic ​ $ 1.49 ​ $ 1.20 ​ Earnings per share, diluted ​ $ 1.49 ​ $ 1.20 ​ Book value per share ​ $ 18.69 ​ $ 17.28 ​ Performance Ratios: ​ ​ ​ ​ ​ Return on average assets (1) ​ 0.93 % 0.76 % Return on average equity (2) ​ 8.26 % 7.16 % Net interest margin ​ 2.68 % 2.28 % Non-interest expense to average assets (3) ​ ​ 1.48 % ​ 1.41 % Efficiency ratio (4) ​ 53.6 % 59.7 % ​ ​ 48 Table of Contents (1) ROAA is calculated by dividing net income by year-to-date average assets.
Non-interest bearing demand deposits represented 22.9% and 21.6% of total deposits at December 31, 2024 and December 31, 2023, respectively. Interest-bearing deposits, which include NOW accounts, regular savings accounts, money market accounts, and time deposits, decreased $36.1 million or 2.41% to $1.46 billion as of December 31, 2024 compared to $1.50 billion as of December 31, 2023.
Non-interest bearing demand deposits represented 21.9% and 22.9% of total deposits at December 31, 2025 and December 31, 2024, respectively. Interest-bearing deposits, which include NOW accounts, savings accounts, money market accounts, and time deposits, increased $80.4 million or 5.5% to $1.54 billion as of December 31, 2025 compared to $1.46 billion as of December 31, 2024.
Tax-Equivalent Net Interest Income ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, (Dollars in thousands) 2024 2023 GAAP Financial Measurements: ​ ​ ​ Interest Income - Loans ​ $ 96,332 ​ $ 86,435 Interest Income - Securities and Other Interest-Earning Assets ​ 13,801 ​ 14,335 Interest Expense - Deposits ​ 54,492 ​ 47,168 Interest Expense - Borrowings ​ 4,594 ​ 3,118 Total Net Interest Income (GAAP) ​ $ 51,047 ​ $ 50,484 ​ ​ ​ ​ ​ ​ ​ Non-GAAP Financial Measurements: ​ ​ Add: Tax Benefit on Tax-Exempt Interest Income - Loans ​ 150 ​ 244 Add: Tax Benefit on Tax-Exempt Interest Income - Securities ​ 9 ​ 15 Total Tax Benefit on Tax-Exempt Interest Income (1) ​ $ 159 ​ $ 259 Tax-Equivalent Net Interest Income (Non-GAAP) ​ $ 51,206 ​ $ 50,743 (1) Tax benefit was calculated using the federal statutory tax rate of 21%.
Tax-Equivalent Net Interest Income ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, (Dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 GAAP Financial Measurements: ​ ​ ​ ​ ​ Interest Income - Loans ​ $ 102,651 ​ $ 96,332 Interest Income - Securities and Other Interest-Earning Assets ​ 10,606 ​ 13,801 Interest Expense - Deposits ​ 49,027 ​ 54,492 Interest Expense - Borrowings ​ 3,666 ​ 4,594 Total Net Interest Income (GAAP) ​ $ 60,564 ​ $ 51,047 ​ ​ ​ ​ ​ ​ ​ Non-GAAP Financial Measurements: ​ ​ ​ ​ Add: Tax Benefit on Tax-Exempt Interest Income - Loans ​ 151 ​ 150 Add: Tax Benefit on Tax-Exempt Interest Income - Securities ​ 9 ​ 9 Total Tax Benefit on Tax-Exempt Interest Income (1) ​ $ 160 ​ $ 159 Tax-Equivalent Net Interest Income (Non-GAAP) ​ $ 60,724 ​ $ 51,206 (1) Tax benefit was calculated using the federal statutory tax rate of 21%.
The decrease was primarily the result of volume decreasing from the Restructuring and to a lesser extent, the amortization and maturities of securities. Average investment securities decreased approximately $116.5 million between the years ended December 31, 2024 and December 31, 2023.
This decrease was primarily the result of volume decreasing from the amortization and maturities of securities. Average investment securities decreased approximately $29.1 million between the years ended December 31, 2025 and December 31, 2024.
Changes in economic conditions or exposure to credit, market, operational, legal, and reputation risks also can affect a bank’s liquidity. Management maintains that the Company has a strong liquidity position, but any of the factors referenced above could materially impact that in the future. The Company has various contractual obligations that affect its cash flows and liquidity.
Management maintains that the Company has a strong liquidity position, but any of the factors referenced above could materially impact that in the future. The Company has various contractual obligations that affect its cash flows and liquidity.
The following table presents the Company’s composition of loans held for investment, net of deferred fees and costs, in dollar amounts and as a percentage of total gross loans as of December 31, 2024 and December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 (Dollars in thousands) Amount Percent Amount Percent Real Estate Loans: ​ ​ ​ ​ Commercial ​ $ 1,181,090 63.24 % $ 1,146,116 61.79 % Construction and land development ​ 164,988 8.83 % 180,922 9.75 % Residential ​ 472,932 25.32 % 482,182 25.99 % Commercial - Non Real Estate: ​ ​ ​ ​ ​ Commercial loans ​ 47,736 2.56 % 45,204 2.44 % Consumer - Non-Real Estate: ​ ​ ​ ​ ​ Consumer loans ​ 906 0.05 % 560 0.03 % Total Gross Loans ​ $ 1,867,652 100.00 % $ 1,854,984 100.00 % Allowance for loan credit losses ​ (18,715) ​ ​ ​ (19,543) ​ Net deferred loan costs ​ 4,521 ​ ​ ​ 4,983 ​ Total net loans ​ $ 1,853,458 ​ ​ ​ $ 1,840,424 ​ ​ The following table summarizes the contractual maturities of the loans as of December 31, 2024 by loan type.
The following table presents the Company’s composition of loans held for investment, net of deferred fees and costs, in dollar amounts and as a percentage of total gross loans as of December 31, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 (Dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent Real Estate Loans: ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 1,173,617 59.57 % $ 1,181,090 63.24 % Construction and land development ​ 222,659 11.30 % 164,988 8.83 % Residential ​ 522,990 26.54 % 472,932 25.32 % Commercial - Non Real Estate: ​ ​ ​ ​ ​ ​ ​ Commercial loans ​ 49,967 2.54 % 47,736 2.56 % Consumer - Non-Real Estate: ​ ​ ​ ​ ​ ​ ​ Consumer loans ​ 1,043 0.05 % 906 0.05 % Total Gross Loans ​ $ 1,970,276 100.00 % $ 1,867,652 100.00 % Allowance for loan credit losses ​ (19,805) ​ ​ ​ (18,715) ​ ​ ​ Net deferred loan costs ​ 5,084 ​ ​ ​ 4,521 ​ ​ ​ Total net loans ​ $ 1,955,555 ​ ​ ​ $ 1,853,458 ​ ​ ​ ​ The following table summarizes the contractual maturities of the loans as of December 31, 2025 by loan type.
Treasuries ​ $ 27,920 ​ $ 27,137 ​ $ 44,793 ​ $ 42,977 U.S. government and federal agencies ​ 10,966 ​ 10,581 ​ 13,850 ​ 13,275 Corporate bonds ​ 3,000 ​ 2,739 ​ 3,000 ​ 2,523 U.S. agency collateralized mortgage obligations ​ 36,032 ​ 29,611 ​ 40,806 ​ 34,310 Tax-exempt municipal ​ 1,379 ​ 1,171 ​ 1,380 ​ 1,231 Taxable municipal ​ 270 ​ 263 ​ 606 ​ 587 U.S. agency mortgage-backed ​ 64,274 ​ 58,755 ​ 81,255 ​ 75,090 Total Available-for-sale Securities ​ $ 143,841 ​ $ 130,257 ​ $ 185,690 ​ $ 169,993 ​ In the prevailing rate environments as of both December 31, 2024 and December 31, 2023, the Company’s investment portfolio had an estimated weighted average remaining life of approximately 4.2 years.
Treasuries ​ $ 13,244 ​ $ 13,132 ​ $ 27,920 ​ $ 27,137 U.S. government and federal agencies ​ 6,976 ​ 6,820 ​ 10,966 ​ 10,581 Corporate bonds ​ 3,000 ​ 2,820 ​ 3,000 ​ 2,739 U.S. agency collateralized mortgage obligations ​ 31,019 ​ 25,693 ​ 36,032 ​ 29,611 Tax-exempt municipal ​ 1,378 ​ 1,236 ​ 1,379 ​ 1,171 Taxable municipal ​ — ​ — ​ 270 ​ 263 U.S. agency mortgage-backed ​ 77,306 ​ 74,151 ​ 64,274 ​ 58,755 Total Available-for-sale Securities ​ $ 132,923 ​ $ 123,852 ​ $ 143,841 ​ $ 130,257 ​ In the prevailing rate environments as of both December 31, 2025 and December 31, 2024, the Company’s investment portfolio had an estimated weighted average remaining life of approximately 3.9 years and 4.2 years, respectively.
The Company also had restricted stock and equity securities within its investment securities portfolio with total carrying values of $7.6 million and $2.8 million, respectively, as of December 31, 2024 and $5.0 million and $2.8 million, respectively, as of December 31, 2023. The Company did not purchase or sell any investment securities during the year ended December 31, 2024.
The Company also had restricted stock and equity securities within its investment securities portfolio with total carrying values of $7.6 million and $2.8 million, respectively, at both December 31, 2025 and December 31, 2024.
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 years ended December 31, 2024 and 2023.
Management expects net interest income and net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of the Company’s interest-earning assets and interest-bearing liabilities. 50 Table of Contents 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 years ended December 31, 2025 and 2024.
The Company had no non accrual loans and OREO as of December 31, 2024 and December 31, 2023. 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.
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. The Company did not have any nonaccrual loans as of December 31, 2025 or December 31, 2024 nor were there any loans placed on nonaccrual during those periods.
The increase in rate on interest-earning assets 51 Table of Contents was primarily attributable to the Company’s loan portfolio. The decrease in volume of average interest-earning assets was primarily attributable to the Company’s securities portfolio. Fully tax-equivalent interest income on loans increased by approximately $9.9 million or 11.5% primarily as a result of rate.
The increase in rates and volume on interest-earning assets was primarily attributable to the Company’s loan portfolio, which was partially offset by the decrease in rate and volume of interest-bearing deposits in other banks. Fully tax-equivalent interest income on loans increased by approximately $6.3 million or 6.6% primarily as a result of higher volume and rates.
Book value per share was $17.28 as of December 31, 2024 compared to $16.25 as of December 31, 2023. Investment Securities The Company maintains a primarily fixed income investment securities portfolio that had a total carrying value of $222.3 million at December 31, 2024 and $265.5 million at December 31, 2023.
Investment Securities The Company maintains a primarily fixed income investment securities portfolio that had a total carrying value of $212.3 million at December 31, 2025 and $222.3 million at December 31, 2024.
Treasuries ​ $ 6,001 ​ $ 5,418 ​ $ 6,001 ​ $ 5,334 U.S. government and federal agencies ​ 35,349 ​ 30,606 ​ 35,434 ​ 30,334 U.S. agency collateralized mortgage obligations ​ 17,805 ​ 13,857 ​ 19,395 ​ 15,300 Taxable municipal ​ 6,041 ​ 4,952 ​ 6,057 ​ 4,956 U.S. agency mortgage-backed ​ 26,813 ​ 21,437 ​ 28,618 ​ 23,608 Total Held-to-maturity Securities ​ $ 92,009 ​ $ 76,270 ​ $ 95,505 ​ $ 79,532 Available-for-sale ​ ​ ​ ​ U.S.
Treasuries ​ $ 6,002 ​ $ 5,694 ​ $ 6,001 ​ $ 5,418 U.S. government and federal agencies ​ 35,314 ​ 32,380 ​ 35,349 ​ 30,606 U.S. agency collateralized mortgage obligations ​ 16,163 ​ 13,157 ​ 17,805 ​ 13,857 Taxable municipal ​ 6,024 ​ 5,270 ​ 6,041 ​ 4,952 U.S. agency mortgage-backed ​ 24,918 ​ 21,074 ​ 26,813 ​ 21,437 Total Held-to-maturity Securities ​ $ 88,421 ​ $ 77,575 ​ $ 92,009 ​ $ 76,270 Available-for-sale ​ ​ ​ ​ ​ ​ ​ ​ U.S.
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 following table summarizes the maturity composition of our investment securities as of December 31, 2025, including the weighted average yield of each maturity range. 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.
(5) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income.
(2) ROAE is calculated by dividing net income by year-to-date average equity. (3) Non-interest expense to average assets is calculated by dividing non-interest expense by average assets. (4) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income.
The following table summarizes non-interest expense for the years ended December 31, 2024 and December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, (Dollars in thousands) 2024 2023 Salaries and employee benefits expense ​ $ 19,240 ​ $ 19,436 Occupancy expense of premises ​ 1,760 ​ 1,811 Furniture and equipment expenses ​ 1,220 ​ 1,178 Advertising expense ​ 386 ​ 288 Data processing ​ 2,192 ​ 1,936 FDIC insurance ​ 1,000 ​ 1,041 Professional fees ​ 1,001 ​ 329 State franchise tax ​ 2,405 ​ 2,389 Bank insurance ​ 238 ​ 174 Vendor services ​ 640 ​ 407 Supplies, printing, and postage ​ 152 ​ 152 Director costs ​ 776 ​ 876 Other operating expenses ​ 799 ​ 798 Total non-interest expense ​ $ 31,809 ​ $ 30,815 ​ Non-interest expense increased $1.0 million or 3.2% during the year ended December 31, 2024 compared to the same period in 2023.
The following table summarizes non-interest expense for the years ended December 31, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ $ Change ​ % Change ​ Salaries and employee benefits expense ​ $ 20,729 ​ $ 19,240 ​ $ 1,489 ​ 7.7 % Occupancy expense of premises ​ 1,544 ​ 1,760 ​ ​ (216) ​ (12.3) % Furniture and equipment expenses ​ 1,285 ​ 1,220 ​ ​ 65 ​ 5.3 % Advertising expense ​ 381 ​ 386 ​ ​ (5) ​ (1.3) % Data processing ​ 2,360 ​ 2,192 ​ ​ 168 ​ 7.7 % FDIC insurance ​ 992 ​ 1,000 ​ ​ (8) ​ (0.8) % Professional fees ​ 1,146 ​ 1,001 ​ ​ 145 ​ 14.5 % State franchise tax ​ 2,520 ​ 2,405 ​ ​ 115 ​ 4.8 % Bank insurance ​ 243 ​ 238 ​ ​ 5 ​ 2.1 % Vendor services ​ 649 ​ 640 ​ ​ 9 ​ 1.4 % Supplies, printing, and postage ​ 148 ​ 152 ​ ​ (4) ​ (2.6) % Director costs ​ 667 ​ 776 ​ ​ (109) ​ (14.0) % Other operating expenses ​ 903 ​ 799 ​ ​ 104 ​ 13.0 % Total non-interest expense ​ $ 33,567 ​ $ 31,809 ​ $ 1,758 ​ 5.5 % ​ Non-interest expense increased $1.8 million or 5.5% during the year ended December 31, 2025 compared to the same period in 2024 primarily resulting from increases in salaries and employee benefits, data processing service fees, professional fees, and other operating expenses.
In August of 2023, 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.
In August of 2025, the Company’s Board of Directors authorized the extension of the Company’s stock repurchase program that was originally adopted in August of 2021.
Core deposits totaled $1.62 billion or 85.4% of total deposits and $1.58 billion or 82.7% of total deposits at December 31, 2024 and December 31, 2023, respectively. 59 Table of Contents The following table sets forth the average balances of deposits and the average interest rates paid for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ Average ​ Average ​ (Dollars in thousands) ​ Amount ​ Rate ​ Amount ​ Rate Non-interest bearing ​ $ 437,694 ​ ​ $ 447,804 ​ Interest bearing: ​ ​ ​ ​ NOW accounts ​ 322,028 ​ 2.75 % ​ 299,468 2.27 % Money market accounts ​ 342,057 ​ 3.13 % ​ 362,243 2.80 % Savings accounts ​ 48,466 ​ 1.37 % ​ 69,742 1.19 % Time deposits ​ 757,494 ​ 4.52 % ​ 842,121 3.49 % Total interest-bearing ​ 1,470,045 ​ 3.71 % ​ 1,573,574 3.00 % Total ​ $ 1,907,739 ​ 2.86 % $ 2,021,378 2.33 % ​ The following table sets forth the maturity ranges of certificates of deposit with balances of $250,000 or more as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 (Dollars in thousands) Total Uninsured Three months or less ​ $ 65,443 ​ $ 46,443 Over three through 6 months ​ 120,452 ​ 101,952 Over 6 through 12 months ​ 61,133 ​ 48,383 Over 12 months ​ 68,520 ​ 55,270 Total ​ $ 315,548 ​ $ 252,048 ​ The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was estimated at $816.7 million at December 31, 2024 and $802.8 million at December 31, 2023.
Core deposits totaled $1.67 billion or 84.7% of total deposits and $1.62 billion or 85.4% of total deposits at December 31, 2025 and December 31, 2024, respectively. 61 Table of Contents The following table sets forth the average balances of deposits and the average interest rates paid for the years ended December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ (Dollars in thousands) ​ Amount ​ Rate ​ Amount ​ Rate Non-interest bearing ​ $ 438,171 ​ ​ $ 437,694 ​ ​ Interest bearing: ​ ​ ​ ​ ​ ​ ​ ​ NOW accounts ​ 353,556 ​ 2.30 % ​ 322,028 2.75 % Money market accounts ​ 352,226 ​ 2.66 % ​ 342,057 3.13 % Savings accounts ​ 41,227 ​ 1.02 % ​ 48,466 1.37 % Time deposits ​ 733,433 ​ 4.24 % ​ 757,494 4.52 % Total interest-bearing ​ 1,480,442 ​ 3.31 % ​ 1,470,045 3.71 % Total ​ $ 1,918,613 ​ 2.56 % $ 1,907,739 2.86 % ​ The following table sets forth the maturity ranges of certificates of deposit with balances of $250,000 or more as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 (Dollars in thousands) ​ ​ ​ Total ​ ​ ​ Uninsured Three months or less ​ $ 57,048 ​ $ 41,548 Over three through 6 months ​ 124,531 ​ 96,031 Over 6 through 12 months ​ 49,690 ​ 35,190 Over 12 months ​ 106,395 ​ 97,145 Total ​ $ 337,664 ​ $ 269,914 ​ The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was estimated at $853.4 million at December 31, 2025 and $816.7 million at December 31, 2024.
The increase in the cost of interest-bearing liabilities was primarily due to a 71 basis point increase in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with an increase in rates offered on money market, NOW and savings deposit accounts since the fourth quarter of 2023.
The decrease in the cost of interest-bearing liabilities was primarily due to a 40 basis points decrease in the cost of interest-bearing deposits as a result of the repricing of the Company’s time deposits coupled with a decrease in rates offered on money market, interest-bearing demand deposits and savings deposit accounts since the fourth quarter of 2024. ​ The yield on interest-earning assets was 5.01% for the twelve months ended December 31, 2025 compared to 4.91% for the same period in 2024.
Net Interest Income and Net Interest Margin Net interest income is the excess of interest earned on loans and investments over the interest paid on deposits and borrowings, and is the Company’s primary revenue source. Net interest income is affected by overall balance sheet growth, changes in interest rates and changes in the mix of investments, loans, deposits and borrowings.
Results of Operations – Years Ended December 31, 2025 and December 31, 2024 Net Interest Income and Net Interest Margin Net interest income is the excess of interest earned on loans and investments over the interest paid on deposits and borrowings, and is the Company’s primary revenue source.
The increase in shareholders’ equity was primarily attributable to the Company’s earnings over the previous twelve months and a decrease in accumulated other comprehensive loss, which was due to decreases in unrealized losses on our available-for-sale investment portfolio from market value increases. This increase was partially offset by increased cash dividends paid.
The year-over-year change in book value per share was primarily due to the Company’s earnings over the previous twelve months and a decrease in accumulated other comprehensive loss, resulting from an increase in the market value of our available-for-sale investment portfolio.
The following table summarizes non-interest income for the years ended December 31, 2024 and December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, (Dollars in thousands) 2024 2023 Service charges on deposit accounts ​ ​ ​ ​ ​ ​ Overdrawn account fees ​ $ 84 ​ $ 82 Account service fees ​ 265 ​ 248 Other service charges and fees ​ ​ Interchange income ​ 363 ​ 403 Other charges and fees ​ 292 ​ 435 Bank owned life insurance ​ — ​ 224 Losses on sale of available-for-sale securities ​ — ​ (17,316) Net gains on premises and equipment ​ 1 ​ 16 Insurance commissions ​ 416 ​ 386 Gain on sale of government guaranteed loans ​ ​ 520 ​ ​ 131 Non-qualified deferred compensation plan asset gains, net ​ ​ 236 ​ ​ 317 Other operating income ​ 94 ​ 134 Total non-interest income ​ $ 2,271 ​ $ (14,940) ​ Non-interest income increased $17.2 million during the year ended December 31, 2024 compared to the same period in 2023.
The following table summarizes non-interest income for the years ended December 31, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ $ Change ​ % Change ​ Service charges on deposit accounts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Overdrawn account fees ​ $ 81 ​ $ 84 ​ $ (3) ​ (3.6) % Account service fees ​ 255 ​ 265 ​ ​ (10) ​ (3.8) % Other service charges and fees ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interchange income ​ 327 ​ 363 ​ ​ (36) ​ (9.9) % Other charges and fees ​ 244 ​ 292 ​ ​ (48) ​ (16.4) % Net gain (loss) on premises and equipment ​ (3) ​ 1 ​ ​ (4) ​ N/M ​ Insurance commissions ​ 328 ​ 416 ​ ​ (88) ​ (21.2) % Gain on sale of government guaranteed loans ​ ​ 322 ​ ​ 520 ​ ​ (198) ​ (38.1) % Non-qualified deferred compensation plan asset gains, net ​ ​ 402 ​ ​ 236 ​ ​ 166 ​ 70.3 % Other operating income ​ 118 ​ 94 ​ ​ 24 ​ 25.5 % Total non-interest income ​ $ 2,074 ​ $ 2,271 ​ $ (197) ​ (8.7) % ​ Non-interest income decreased $197 thousand or 8.7% during the year ended December 31, 2025 compared to the same period of 2024.
Management seeks to maximize net interest income without exposing the Company to an excessive level of interest rate risk through management’s asset and liability management policies. Interest rate risk is managed by monitoring the pricing, maturity, and repricing options of all classes of interest-bearing assets and liabilities.
Interest rate risk is managed by monitoring the pricing, maturity, and repricing options of all classes of interest-earning assets and interest-bearing liabilities.
Conditions may arise in the future that could negatively impact the Company’s future liquidity position resulting in funding mismatches. These include market constraints on the ability to convert assets into cash or accessing sources of funds (i.e., market liquidity) and contingent liquidity events.
These include market constraints on the ability to convert assets into cash or accessing sources of funds (i.e., market liquidity) and contingent liquidity events. Changes in economic conditions or exposure to credit, market, operational, legal, and reputation risks also can affect a bank’s liquidity.
Non-interest Income The Company’s recurring sources of non-interest income consist primarily of interchange income, service charges on deposit accounts, gain on sale of government guaranteed loans, and insurance commissions. Generally speaking, loan fees are included in interest income on the loan portfolio and not reported as non-interest income.
Generally speaking, loan fees are included in interest income on the loan portfolio and not reported as non-interest income.
The following table presents the effects of changing rates and volumes on 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 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 52 Table of Contents represents the sum of the prior columns.
The Company’s liquidity position represented 110.3% of uninsured, non-collateralized deposits at December 31, 2024. In addition to available secured borrowing capacity, the Company had available federal funds lines with correspondent banks of $110.0 million at December 31, 2024. Liquidity is a core pillar of the Company’s operations.
The Company’s liquidity position, defined as the sum of cash, unencumbered securities and available secured borrowing capacity, totaled $827.0 million as of December 31, 2025 compared to $727.3 million as of December 31, 2024, respectively. In addition to available secured borrowing capacity, the Bank had available federal funds lines of $110.0 million at December 31, 2025.
Rate/Volume Analysis ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2024 and 2023 ​ ​ Increase ​ ​ ​ ​ ​ (Decrease) Due to ​ ​ ​ (Dollars in thousands) Volume Rate Total Increase (Decrease) Interest-earning Assets: ​ ​ ​ Securities: ​ ​ ​ Taxable ​ $ (2,321) ​ $ (102) ​ $ (2,423) Tax-exempt (1) ​ (28) ​ 5 ​ (23) Total securities ​ $ (2,349) ​ $ (97) ​ $ (2,446) Loans, net of unearned income: ​ ​ ​ Taxable ​ 2,292 ​ 7,963 ​ 10,255 Tax-exempt (1) ​ (379) ​ ​ (73) ​ (452) Total loans, net of unearned income (2) ​ $ 1,913 ​ $ 7,890 ​ $ 9,803 Interest-bearing deposits in other banks ​ $ 1,824 ​ $ 82 ​ $ 1,906 Total interest-earning assets ​ $ 1,388 ​ $ 7,875 ​ $ 9,263 Interest-bearing Liabilities: ​ ​ ​ Interest-bearing deposits: ​ ​ ​ NOW accounts ​ $ 1,107 ​ $ 937 ​ $ 2,044 Money market accounts ​ (873) ​ 1,430 ​ 557 Savings accounts ​ (291) ​ 124 ​ (167) Time deposits ​ (3,856) ​ 8,746 ​ 4,890 Total interest-bearing deposits ​ $ (3,913) ​ $ 11,237 ​ $ 7,324 Federal funds purchased ​ (13) ​ — ​ (13) Subordinated debt ​ 5 ​ (5) ​ — Federal Reserve Bank borrowings ​ ​ 819 ​ (8) ​ 811 Federal Home Loan Bank advances ​ 685 ​ (7) ​ 678 Total interest-bearing liabilities ​ $ (2,417) ​ $ 11,217 ​ $ 8,800 Change in tax-equivalent net interest income (Non-GAAP) ​ $ 3,805 ​ $ (3,342) ​ $ 463 (1) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory tax rate of 21%.
Rate/Volume Analysis ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2025 and 2024 ​ ​ Increase ​ ​ ​ ​ ​ (Decrease) Due to ​ ​ ​ (Dollars in thousands) ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ Total Increase (Decrease) Interest-earning Assets: ​ ​ ​ ​ ​ ​ Securities: ​ ​ ​ ​ ​ ​ Taxable ​ $ (603) ​ $ 202 ​ $ (401) Tax-exempt (1) ​ — ​ — ​ — Total securities ​ $ (603) ​ $ 202 ​ $ (401) Loans, net of unearned income: ​ ​ ​ ​ ​ ​ Taxable ​ 4,019 ​ 2,297 ​ 6,316 Tax-exempt (1) ​ (39) ​ ​ 43 ​ 4 Total loans, net of unearned income (2) ​ $ 3,980 ​ $ 2,340 ​ $ 6,320 Interest-bearing deposits in other banks ​ $ (1,146) ​ $ (1,648) ​ $ (2,794) Total interest-earning assets ​ $ 2,231 ​ $ 894 ​ $ 3,125 Interest-bearing Liabilities: ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ NOW accounts ​ $ 773 ​ $ (1,506) ​ $ (733) Money market accounts ​ 464 ​ (1,788) ​ (1,324) Savings accounts ​ (75) ​ (167) ​ (242) Time deposits ​ (915) ​ (2,251) ​ (3,166) Total interest-bearing deposits ​ $ 247 ​ $ (5,712) ​ $ (5,465) Federal funds purchased ​ — ​ — ​ — Subordinated debt ​ 5 ​ (5) ​ — Federal Reserve Bank borrowings ​ ​ (2,451) ​ — ​ (2,451) Federal Home Loan Bank advances ​ 1,523 ​ — ​ 1,523 Total interest-bearing liabilities ​ $ (676) ​ $ (5,717) ​ $ (6,393) Change in tax-equivalent net interest income (Non-GAAP) ​ $ 2,907 ​ $ 6,611 ​ $ 9,518 (1) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory tax rate of 21%.
The stock repurchase program will expire on August 31, 2025 or earlier if all the authorized shares have been repurchased. The Company repurchased 3,003 shares at $16.48 per share during the twelve months ended December 31, 2024. 60 Table of Contents Liquidity Liquidity reflects a financial institution’s ability to fund assets and meet current and future financial obligations.
During the twelve months ended December 31, 2025, the Company repurchased 135,640 shares of its outstanding common stock at a weighted average price of $17.80. The aggregate repurchase activity was accretive to the Company’s book value per share. Liquidity Liquidity reflects a financial institution’s ability to fund assets and meet current and future financial obligations.
Interest Expense Interest expense increased by $8.8 million to $59.1 million for the year ended December 31, 2024 compared to $50.3 million for the year ended December 31, 2023, primarily due to an increase in rates. The increase in rates was primarily a result of the repricing of the Company’s time deposits.
Interest Expense Interest expense decreased by $6.4 million to $52.7 million for the year ended December 31, 2025 compared to $59.1 million for the year ended December 31, 2024, primarily due to a decrease in rates on interest-bearing deposits coupled with lower average balance of borrowings.
The Company’s interest-earning assets include loans, investment securities and interest-bearing deposits in other banks, while our interest-bearing liabilities include interest-bearing deposits and borrowings. Net interest margin represents the difference between interest 48 Table of Contents received and interest paid as a percentage of average total interest-earning assets.
Net interest income is affected by overall balance sheet growth, changes in interest rates and changes in the mix of investments, loans, deposits and borrowings. The Company’s interest-earning assets include loans, investment securities and interest-bearing deposits in other banks, while our interest-bearing liabilities include interest-bearing deposits and borrowings.
The increase in shareholders’ equity was primarily attributable the Company’s earnings during the year and a decrease in accumulated other comprehensive loss, which was attributable to a decrease in unrealized losses on our available-for-sale portfolio due to market value increases. These increases were partially offset by cash dividends paid.
The year-over-year change in book value per share was primarily due to the Company’s earnings over the previous twelve months and a decrease in accumulated other comprehensive loss, resulting from an increase in the market value of our available-for-sale investment portfolio.
The weighted-average yield below represents the effective yield for the investment securities and is calculated based on the amortized cost of each security. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Amortized ​ Fair ​ Weighted-Average (Dollars in thousands) Cost Value Yield Held-to-maturity ​ ​ ​ Due in one year or less ​ $ — ​ $ — — ​ Due after one year through five years ​ 27,431 ​ 24,641 1.17 % Due after five years through ten years ​ 21,620 ​ 17,962 1.67 % Due after ten years ​ 42,958 ​ 33,667 1.45 % Total Held-to-maturity Securities ​ $ 92,009 ​ $ 76,270 1.42 % Available-for-sale ​ ​ ​ Due in one year or less ​ $ 21,057 ​ $ 20,798 1.80 % Due after one year through five years ​ 29,996 ​ 28,849 2.14 % Due after five years through ten years ​ 36,750 ​ 34,830 2.66 % Due after ten years ​ 56,038 ​ 45,780 1.56 % Total Available-for-sale Securities ​ $ 143,841 ​ $ 130,257 2.00 % ​ 55 Table of Contents Loan Portfolio Gross loans net of unearned income increased $12.7 million or 0.7% to $1.87 billion as of December 31, 2024 compared to $1.85 billion as of December 31, 2023.
The weighted-average yield below represents the effective yield for the investment securities and is calculated based on the amortized cost of each security. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Amortized ​ Fair ​ Weighted-Average (Dollars in thousands) ​ ​ ​ Cost ​ ​ ​ Value ​ ​ ​ Yield Held-to-maturity ​ ​ ​ ​ ​ ​ Due in one year or less ​ $ — ​ $ — — ​ Due after one year through five years ​ 34,754 ​ 32,532 1.21 % Due after five years through ten years ​ 15,208 ​ 13,340 1.82 % Due after ten years ​ 38,459 ​ 31,703 1.44 % Total Held-to-maturity Securities ​ $ 88,421 ​ $ 77,575 1.41 % Available-for-sale ​ ​ ​ ​ ​ ​ Due in one year or less ​ $ 17,400 ​ $ 17,280 1.34 % Due after one year through five years ​ 21,600 ​ 21,079 2.79 % Due after five years through ten years ​ 42,717 ​ 42,158 3.71 % Due after ten years ​ 51,206 ​ 43,335 1.62 % Total Available-for-sale Securities ​ $ 132,923 ​ $ 123,852 2.45 % ​ Loan Portfolio Gross loans net of unearned income increased $103.2 million or 5.5% to $1.98 billion as of December 31, 2025 compared to $1.87 billion as of December 31, 2024.
On a fully tax-equivalent basis, the net interest margin was 2.28% for the year ended December 31, 2024, compared to 2.21% for the same period in 2023. The increase in net interest margin was primarily due to increases in the yield of interest-bearing assets, which was partially offset by an increase in the cost of interest-bearing deposits.
Net interest income increased $9.5 million or 18.6% on a fully tax-equivalent basis for the year ended December 31, 2025. The net interest margin for the year ended December 31, 2025 was 2.68% as compared to 2.28% for the same period in the prior year.
The loan portfolio’s yield for the year ended December 31, 2024 was 5.28% compared to 4.84% for the year ended December 31, 2023.
Our effective tax rate for the year ended December 31, 2025 was 22.5% compared to 21.7% for the year ended December 31, 2024.
Average loans increased approximately $33.4 million between the years ended December 31, 2024 and December 31, 2023, which was primarily attributable to growth in the investor real estate and residential loan portfolios. Fully tax-equivalent interest income on investment securities decreased by approximately $2.4 million.
Average loans increased approximately $73.1 million, primarily attributable to growth in the construction & development and residential loan portfolios, while loan yields increased 13 basis points between the years ended December 31, 2025 and December 31, 2024.
Excluding the impact of the Restructuring, non-interest income decreased $0.1 million or 4.4%. The decrease reflects the surrender of BOLI as part of the Restructuring. 52 Table of Contents Non-interest Expense 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.
These decreases were partially offset by a $166 thousand increase to the mark-to-market adjustments on the Company’s NQDC plan and a $37 thousand increase in swap fee income. ​ 54 Table of Contents Non-interest Expense 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 decreases were partially offset by an increase in non-interest bearing demand deposits and interest-bearing demand deposits of $21.9 million and $97.1 million, respectively. Shareholders’ equity increased $16.7 million or 7.3% to $246.6 million at December 31, 2024 compared to $229.9 million at December 31, 2023.
At December 31, 2025, total cash and cash equivalents were $130.0 million, an increase of $7.5 million or 6.1% compared to December 31, 2024. Shareholders’ equity increased $19.0 million or 7.7% to $265.6 million at December 31, 2025 compared to $246.6 million at December 31, 2024.
The increase in data processing fees was primarily due to contractual increases and volume-based activity.
Increase in incentive compensation reflected the 24% year-over-year increase in net income and the fact that the Company’s operating performance for 2025 exceeded the budget and strategic plan. The $168 thousand or 7.7% increase in data processing service fees was primarily due to contractual increases and volume-based activity.
The decrease in salaries and employee benefits was due to lower incentive accruals and higher direct loan origination costs when compared to the same period of the prior year, partially offset by higher deferred compensation expense as a result of a mark-to-market fluctuations on the Company’s NQDC. ​ Income Taxes Income tax expense increased $1.9 million or 68.5% to $4.8 million for the year ended December 31, 2024 compared to $2.8 million for the year ended December 31, 2023.
These increases were partially offset by a decrease in the Company’s occupancy expense, which declined by $216 thousand or 12.3%, due to a decrease in office rent as a result of the renegotiation of more favorable terms on certain leases. ​ Income Taxes Income tax expense increased $1.4 million or 29.3% to $6.2 million for the year ended December 31, 2025 compared to $4.8 million for the year ended December 31, 2024.
The Company’s total liabilities decreased $24.3 million or 1.2% to $1.99 billion at December 31, 2024 compared to $2.01 billion at December 31, 2023. The decrease in total liabilities was primarily attributable to a decrease in time deposits of $125.5 million and a decrease of Federal Reserve Bank borrowings of $54.0 million.
The Company’s total liabilities increased $78.6 million or 4.0% to $2.07 billion at December 31, 2025 compared to $1.99 billion at December 31, 2024, which was driven by the $49.9 million and $40.2 million increases in time deposits and interest-bearing demand deposits, respectively.
Results of Operations – Years Ended December 31, 2024 and December 31, 2023 Overview The Company reported net income of $17.1 million for the year ended December 31, 2024, an increase of $12.0 million when compared to the same period in 2023.
Net income for the year ended December 31, 2025 was $21.2 million ($1.49 per diluted common share) compared to $17.1 million ($1.20 per diluted common share) for the year ended December 31, 2024, representing a 24.0% and 24.2% increase in net income and earnings per diluted common share, respectively.
The cost of interest-bearing liabilities increased 0.70% from 3.08% for the year ended December 31, 2023 to 3.78% for the year ended December 31, 2024. The increase in the cost of interest-bearing liabilities was primarily due to higher interest expense on deposits and other borrowings.
These increases in net interest income and net interest margin were driven primarily by the decrease in rates of interest-bearing deposits coupled with increases in average balances and yields of the loan portfolio. ​ The cost of interest-bearing liabilities was 3.37% for the year ended December 31, 2025 compared to 3.78% for the year ended December 31, 2024.
The increase in yield on the Company’s loan portfolio was primarily a result of repricing of assets subsequent to the fourth quarter of 2023 and certain prepayment penalties. 50 Table of Contents The investment securities portfolio’s yield for the year ended December 31, 2024 was 2.01% compared to 2.04% for the year ended December 31, 2023.
The increase in yield on interest-earning assets was primarily due to a 13 basis point increase in loan yield and an eight basis point increase in securities yield, as a result of higher prevailing interest rates as assets repriced subsequent to the fourth quarter of 2024.
Income tax for the twelve months ended December 31, 2024 represents a $0.6 million or 10.5% decrease when compared to the Company’s core income tax expense (Non-GAAP) for the twelve months ended December 31, 2023 of $5.3 million. 53 Table of Contents Discussion and Analysis of Financial Condition – Years Ended December 31, 2024 and December 31, 2023 Assets, Liabilities, and Shareholders’ Equity The Company’s total assets decreased $7.6 million or 0.3% to $2.23 billion at December 31, 2024 compared to $2.24 billion at December 31, 2023.
The increase in the effective tax rate between the comparative periods was primarily driven by higher permanent differences, the most significant component of which was the increased disallowance of compensation under Internal Revenue Code Section 162(m). 55 Table of Contents Discussion and Analysis of Financial Condition – Years Ended December 31, 2025 and December 31, 2024 Assets, Liabilities, and Shareholders’ Equity The Company’s total assets increased $97.6 million or 4.4% to $2.33 billion at December 31, 2025 compared to $2.23 billion at December 31, 2024.
Removed
Non-GAAP measures used in this report consist of tax-equivalent net interest income, core net income, core earnings per share (diluted), core return on average assets, core return on average equity and core income tax expense.
Added
The increase during 2025 was driven by a $9.5 million increase in net interest income, which was partially offset by a $2.1 million increase in provision for credit losses and a $1.8 million increase in non-interest expense.

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