SHEPHERDSTOWN, W.Va.–(BUSINESS THREAD)–Jefferson Security Bank (OTC Pink: JFWV ) reported net income of $833,000 for the quarter ended June 30, 2022, a decrease of $173,000 or 17.2% compared to net income of $1.0 million for the quarter ended in June. 30, 2021. Diluted earnings per share were $3.02 for the second quarter of 2022, compared to $3.65 for the second quarter of 2021. For the six months ended June 30, 2022, the net income was $1.6 million, a decrease of $164 thousand or 9.2%, compared to $1.8 million for the same period in 2021. Diluted earnings per share were $5.89 and $6.45 for the first six months of 2022 and 2021, respectively. Annualized return on average assets and average equity as of June 30, 2022 was 0.75% and 12.30%, respectively, compared to 0.90% and 11.64%, respectively, as of 30 of June 2021.
Profits for the second quarter and the first six months of 2022 were affected by an increase in the provision for credit losses as a result of strong loan growth. The Bank’s provision for loan losses was $140,000 for the second quarter and $215,000 for the first six months of 2022, compared to no provision for loan losses for the second quarter and $80,000 for the first six months of 2021 Additionally, results for the second quarter and first six months of 2022, compared to the same periods in 2021, reflect lower income from the Small Business Administration’s Paycheck Protection Program (PPP) loans (SBA), due to a reduction in PPP loan forgiveness as the program nears its conclusion. PPP interest and fees recognized during the second quarter and first six months of 2022 were $72 thousand and $300 thousand, respectively, compared to $245 thousand and $407 thousand in the second quarter and first six months of 2021, respectively.
“Our performance in the second quarter benefited from solid organic loan growth, improved interest income and good asset quality; however, these positive changes were partially offset by increased expenses related to the provision for loan losses and higher staffing levels,” said President and CEO Cindy Kitner. “With loan and deposit growth that exceeds expectations, the expansion of our team has allowed us to better serve our valuable communities and provide excellent customer service. As we move into the second half of 2022, we are very focused on intentionally managing the growth of our balance sheet, increasing our net interest margin and maintaining a disciplined approach to expense management,” Kitner said.
As of June 30, 2022, total assets increased $34.6 million, or 8.4%, to $448.9 million, compared to total assets of $414.3 million as of June 30, 2022. June 2021. Loans, net of allowance for loan losses, increased $23.4 million or 9.4% to $272.7 million at June 30, 2022, compared to 249, $3 million at June 30, 2021. As of June 30, 2022, loan growth excluding PPP loans was $36.2 million or 15.6% compared to June 30, 2022. 2021. Deposits totaled $425 million. to June 30, 2022, representing an increase of $46.3 million or 12.2%, compared to $379.3 million as of June 30, 2021. From December 31, 2021, total assets increased $22.1 million, loans, net of allowance for loan losses, increased $27.9 million, and total deposits increased $34.9 million. Loan growth, excluding PPP loans, was $33.5 million when June 30, 2022 is compared to December 31, 2021.
The allowance for loan losses at June 30, 2022 was $3.0 million, or 1.11% of total loans, compared to $2.8 million, or 1.14% on December 31, 2021 and $2.8 million, or 1.12% on June 30, 2021. Quality metrics have continued to improve, with non-performing loans declining relative to total loans to at 0.13% on 30 June 2022, compared to 0.36% on 31 December 2021 and 1.05% on 30 June 2021. The Bank closely monitors the portfolio credit with a focus on credit quality and risk management.
Total shareholders’ equity was $20.0 million as of June 30, 2022, which represents a decrease from $33.0 million as of December 31, 2021. This resulted in the book value decreasing to $72.71 per share as of June 30, 2022 compared to $119.52 per share as of December 2021. and $114.04 per share on June 30, 2021. Stockholder’s equity and book value per share were adversely affected by the significant increase in market interest rates and the related impact on other accumulated global losses. The decrease in equity was related to the change in net unrealized losses on the investment portfolio of $14.2 million, when comparing June 30, 2022 to December 31, 2021. While the unrealized losses recognized in equity will decrease over time or if market interest rates decline, management continues to closely monitor the Bank’s capital position based on growth expectations and market fluctuations. The decrease in equity related to unrealized gains and losses on the investment portfolio does not affect the Bank’s regulatory capital ratios under current capital requirements. As of June 30, 2022, the Bank was considered well capitalized with a Tier 1 leverage ratio of 8.08%, the Common Equity Tier 1 risk-based capital ratio of 14.43%, the capital ratio based on level 1 risk of 14.43% and total risk. capital ratio based on 15.63%.
About Jefferson Security Bank
Jefferson Security Bank is an independent community bank that evolves with the needs of customers and the communities it serves. Serving individuals, businesses and community organizations, Jefferson Security Bank strives to support entrepreneurial endeavors in 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 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 together 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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