Jefferson Security Bank Reports First Quarter 2022 Results

Jefferson Security Bank (OTC Pink: JFWV) reported net income of $791 thousand for the quarter ended March 31, 2022, compared to net income of $782 thousand for the quarter ended March 31, 2021. Basic and diluted earnings per share were $2.87 for the first quarter of 2022, compared to $2.81 for the first quarter of 2021. Annualized return on average assets and average equity for March 31, 2022 was 0.73% and 10.31%, respectively, compared to 0.81% and 10.16%, respectively, for March 31, 2021.

“Results for the first quarter were in line with expectations, with steady loan growth and strong credit quality metrics as evidenced by the continuation of historically low charge-offs and low levels of nonperforming assets,” said President and Chief Executive Officer, Cindy Kitner. “We remain focused on the core fundamentals to expand our net interest income through organic loan growth and disciplined expense management,” said Kitner.

As of March 31, 2022, total assets were $437.9 million, compared to total assets of $398.5 million and $426.8 million at March 31, 2021 and December 31, 2021, respectively. Loans, net of the allowance for loan losses, totaled $253.2 million at March 31, 2022, compared to $245.11 million at March 31, 2021 and $244.8 million at December 31, 2021. Paycheck Protection Program (PPP) loans totaled $4.5 million as of March 31, 2022, representing a decline from $17.0 million at March 31, 2021 and $9.5 million at December 31, 2021, resulting from the forgiveness of loans by the Small Business Administration (SBA). Total deposits were $410.4 million at March 31, 2022, an increase from total deposits of $363.8 million and $390.7 million at March 31, 2021 and December 31, 2021, respectively.

The allowance for loan losses at March 31, 2022 totaled $2.9 million or 1.13% of total loans, compared to $2.8 million or 1.14% at March 31, 2021 and December 31, 2021. The allowance for loan losses at March 31, 2022, March 31, 2021 and December 31, 2022 represented 1.15%, 1.22% and 1.19%, respectively, of total loans, excluding outstanding PPP loans. The provision for loan losses totaled $75 thousand for first quarter of 2022, compared to $80 thousand for the first quarter of 2021. Net loan charge-offs were $4 thousand in the first quarter of 2021, compared to $38 thousand for the first quarter of 2021. Loans classified as nonaccrual totaled $606 thousand at March 31, 2022, representing a decline from $2.7 million at March 31, 2021 and $618 thousand at December 31, 2021.

Total shareholder’s equity was $24.2 million as of March 31, 2022, representing a decline from $29.6 million at March 31, 2021 and $32.9 million at December 31, 2021. The change in equity was caused by rapid and significant changes in market interest rates resulting in an increase in net unrealized losses on the available for sale securities in the investment portfolio. These unrealized losses were caused by interest rate changes and not due to the credit deterioration of the issuers. The adjustment for the change in net unrealized losses on the investment portfolio was recorded in accumulated other comprehensive loss. This change to equity does not impact the Bank’s regulatory capital ratios under current capital requirements. As of March 31, 2022, the Bank was considered well-capitalized with a Tier 1 leverage ratio of 8.29%, common equity Tier 1 risk-based capital ratio of 15.25%, Tier 1 risk-based capital ratio of 15.25% and total risk-based capital ratio of 16.49%.

“While the Bank is well-capitalized and maintains strong capital ratios under the regulatory requirements, our team will remain responsive to changing market conditions and will continue to monitor the related impact to our total capital and book value,” said President and Chief Executive Officer, Cindy Kitner.

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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