Jefferson Security Bank Reports Third Quarter 2021 Results

Jefferson Security Bank (OTC Pink: JFWV) reported net income of $863 thousand for the quarter ended September 30, 2021, representing an increase of $180 thousand, or 26.4% when compared to net income of $683 thousand for the quarter ended September 30, 2020. Diluted earnings per share was $3.13 for the third quarter of 2021, compared to $2.45 for the third quarter of 2020. Net income for the nine months ended September 30, 2021 totaled $2.7 million, representing an increase of $646 thousand or 32.2%, compared to $2.0 million for the same period in 2020. Diluted earnings per share was $9.58 and $7.18 for the first nine months of 2021 and 2020, respectively. Annualized return on average assets and average equity for September 30, 2021 increased to 0.87% and 11.33%, respectively, compared to 0.79% and 9.09%, respectively, for September 30, 2020.

“We are pleased to report another quarter of strong performance with continued momentum in earnings,” said President and Chief Executive Officer, Cindy Kitner. “As the economy accelerates and credit quality improves, our management team remains focused on business strategies to support and drive sustained organic growth, including investing in talent development to drive revenue and technology to better serve our customers.”

As of September 30, 2021, total assets increased $61.4 million, or 16.3%, to $437.8 million compared to total assets of $376.4 million as of September 30, 2020. Loans, net of the allowance for loan losses, increased $9.3 million to $244.2 million as of September 30, 2021, compared to $234.8 million as of September 30, 2020. As of September 30, 2021, loan growth excluding PPP loans was $12.3 million when compared to September 30, 2020. Deposits totaled $398.3 million at September 30, 2021, representing an increase of $63.7 million or 19.0%, when compared to $334.6 million at September 30, 2020. Since December 31, 2020, total assets increased $57.1 million; loans, net of the allowance for loans losses, increased $4.3 million; excluding PPP loans, loan growth was $6.4 million and total deposits increased $51.9 million. As of September 30, 2021, book value per share improved to $112.87 per share compared to $111.02 per share at December 31, 2020 and $108.69 per share at September 30, 2020.

The Bank’s liquidity position remains strong with a funding base largely comprised of core noninterest bearing demand deposit accounts and low cost interest bearing checking, savings and money market deposit accounts. The continued inflows of deposits through the first nine months of 2021 resulted in elevated cash and cash equivalents and funded the purchase of $56.5 million in investment securities. At September 30, 2021, the Bank’s regulatory capital ratios exceeded the well capitalized standard. However, the Bank’s Tier 1 capital ratio decreased to 8.36% from 8.68% at December 31, 2020 and 8.99% at September 30, 2020. This decline is attributable to the significant increase in total assets related to the continued funding from deposit inflows. The ratio of common equity Tier 1 capital to risk weighted assets was 15.60%, 15.47% and 14.75% at September 30, 2021, December 31, 2020 and September 30, 2020, respectively. The ratio of total capital to risk weighted assets was 16.85%, 16.72% and 15.92% at September 30, 2021, December 31, 2021 and September 30, 2020, respectively. Management’s capital planning strategies combined with strong earnings performance will allow the Bank to continue to build, support and maintain an adequate capital position.

The allowance for loan losses as of September 30, 2021 was $2.8 million, or 1.15% of total loans compared to $2.8 million, or 1.15% as of December 31, 2020 and $2.5 million, or 1.06% as of September 30, 2020. Excluding PPP loans, which are fully government guaranteed, the allowance for loan losses was 1.20%, 1.22% and 1.14% of total loans as of September 30, 2021, December 31, 2020 and September 30, 2020, respectively. The allowance for loan losses reflects the stabilization of the economic outlook and improved credit performance. For the first nine months of 2021, the provision for loan losses totaled $80 thousand compared to $490 thousand for the same period in 2020. Credit quality metrics generally improved during the third quarter with noncurrent loans to total loans declining to 1.17% as of September 30, 2021, compared to 1.31% as of December 31, 2020 and 1.36% as of September 30, 2020. As of September 30, 2021, noncurrent loans totaled $2.9 million with the majority being attributed to one relationship that is actively managed.

About Jefferson Security Bank

Jefferson Security Bank is an independent community bank evolving with the needs of the customers and the communities it serves. Serving individuals, businesses and community organizations, Jefferson Security Bank strives to support entrepreneurial efforts within its target markets. Delivering long-term value to its shareholders is at the core of the organization’s culture. Jefferson Security Bank is a West Virginia state-chartered bank that was formed and opened for business on May 19, 1869, making it the oldest bank in Jefferson County, West Virginia. The bank provides general banking services in Berkeley County and Jefferson County, West Virginia, and Washington County, Maryland. Visit www.JSB.bank for more information

This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections.

Offices:

105 East Washington Street, Shepherdstown, WV (304-876-9000)

7994 Martinsburg Pike, Shepherdstown, WV (304-876-2800)

873 East Washington Street, Suite 100, Charles Town, WV (304-725-9752)

277 Mineral Drive, Suite 1, Inwood, WV (304-229-6000)

1861 Edwin Miller Boulevard, Martinsburg, WV (304-264-0900)

103 West Main Street, Sharpsburg, MD (301-432-3900)

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