JSB Financial Inc. Reports First Quarter 2025 Results

JSB Financial Inc. (OTCPink: JFWV) (the “Company”), the parent company of Jefferson Security Bank (the “Bank”), reported unaudited consolidated net income of $724 thousand for the three months ended March 31, 2025, representing an increase of $53 thousand or 8.0% when compared to $671 thousand for the three months ended March 31, 2024. Basic and diluted earnings per common share were $2.81 and $2.61 for the first quarter of 2025 and 2024, respectively.

Annualized return on average assets and average equity for the three months ended March 31, 2025 was 0.54% and 9.73%, respectively, compared to 0.53% and 10.75%, respectively, for the three months ended March 31, 2024.

“We are pleased to deliver a solid financial performance for the first quarter of 2025,” said President and Chief Executive Officer, Cindy Kitner. “Despite a challenging economic environment, our team continued to execute growth strategies to organically increase both loans and core deposits, while remaining focused on improving efficiencies and enhancing the customer experience.”

Income Statement Highlights

For the first quarter of 2025, net interest income totaled $3.5 million, representing an increase of $357 thousand, or 11.3%, from $3.2 million for the first quarter of 2024. Interest and fees on loans totaled $5.3 million, representing an increase of $576 thousand, or 12.2%, when compared to $4.7 million for the first quarter of 2024. The increase in interest and fees on loans was primarily attributed to higher average loan balances from organic growth and increased yields on loans resulting from new loan originations and continued repricing of the adjustable-rate loan portfolio.

Total interest expense was $2.7 million for the first quarter of 2025, representing an increase of $381 thousand, or 16.6%, when compared to $2.3 million for the first quarter 2024. The increase in total interest expense was driven by higher average balances and costs related to interest bearing deposits, offset in part by a decrease in interest expense related to lower average borrowings when comparing the first quarter of 2025 to the same period in 2024.

For the first three months ended March 31, 2025, net interest margin was 2.77%, representing a decline of seven basis points from 2.84% at December 31, 2024 and an increase of 12 basis points from 2.65% for the first three months ended March 31, 2024.

Noninterest income for the first quarter of 2025 totaled $567 thousand, compared to $570 thousand for the first quarter of 2024. Noninterest expense for the first quarter of 2025 and 2024 was $3.1 million and $2.8 million, respectively. The increase of $167 thousand in noninterest expense was primarily related to an increase in occupancy expenses and salaries and employee benefits from increased staffing levels and wages.

Balance Sheet Highlights

As of March 31, 2025, total assets were $544.4 million, an increase of $7.5 million, or 1.7%, from $536.9 million as of December 31, 2024. Year-over-year total assets increased $13.2 million, or 2.5%, from $531.2 million as of March 31, 2024.

Loans, net of the allowance for credit losses, totaled $383.2 million as of March 31, 2025, representing an increase of $5.1 million, or 1.3%, from $378.2 million as of December 31, 2024. The increase was primarily attributable to one-to-four family loan originations which resulted in an increase of $5.2 million in the residential real estate portfolio. Year-over-year net loans grew $16.9 million, or 4.6%, from $366.3 million as of March 31, 2024.

Cash and cash equivalents increased $3.2 million, or 11.9% to $30.2 million at March 31, 2025 from $26.9 million at December 31, 2024. The increase in cash and cash equivalents was the result of an increase in funding from deposits. Year-over-year cash and cash equivalents increased $7.3 million, or 31.7%, from $22.9 million as of March 31, 2024.

Investment securities, excluding restricted securities, were $106.4 million, a decline of $617 thousand, or 5.8%, from $107.0 million as of December 31, 2024. Investment securities decreased primarily due to principal repayments and maturities totaling $1.9 million, offset in part by a decrease in the investment portfolio’s unrealized losses on available for sale securities totaling $1.3 million. Year-over-year investment securities, excluding restricted securities, decreased $10.1 million, or 8.7%, from $117.1 million as of March 31, 2024.

Deposits totaled $502.9 million as of March 31, 2025, an increase of $8.2 million, or 1.7%, from $494.7 million as of December 31, 2024. This increase in deposits was primarily due to increases in noninterest bearing deposits of $6.4 million, certificates of deposit of $3.8 million and savings account balances of $1.8 million offset by declines in other interest-bearing deposits of $3.7 million. In total, noninterest bearing deposits represent 24.8% of total deposits as of March 31, 2025, an increase from 23.9% as of December 31, 2024. Year-over-year total deposits increased $44.8 million, or 9.8%, from $458.1 million as of March 31, 2024.

The Company maintains on and off-balance sheet liquidity through cash and cash equivalents, unpledged securities at fair value, Federal Home Loan Bank (FHLB) and Federal Reserve borrowing capacities and unsecured correspondent bank lines of credit. In total, on and off-balance sheet liquidity sources exceeded $297.0 million as of March 31, 2025.

Total borrowings were $5.6 million, representing a decrease of $2.3 million from $7.9 million at December 31, 2024 and a decrease of $38.5 million from $44.1 million at March 31, 2024. The Company had overnight borrowings through FHLB of $5.6 million, $7.9 million, and $16.1 million as of March 31, 2025, December 31, 2024 and March 31, 2024, respectively. There were no borrowings through the Federal Reserve’s discount window at March 31, 2025 and December 31, 2024. At March 31, 2024, the Company had $28.0 million in borrowings through the Federal Reserve’s Bank Term Funding Program and no borrowings through the discount window.

As of March 31, 2025, shareholders’ equity was $31.4 million, representing an increase of $1.4 million, or 4.7%, from $30.0 million at December 31, 2024. The increase in shareholders’ equity was attributed to net income of $724 thousand for the quarter ended March 31, 2025 and a decline in accumulated other comprehensive loss of $997 thousand. The change in accumulated other comprehensive loss was in part related to a reduction in unrealized losses on the available for sale securities portfolio of $873 thousand and a decline in unrealized holding losses on the held to maturity securities portfolio totaling $124 thousand. The Company declared and paid cash dividends totaling $1.25 per share in the first quarter of 2025. Year-over-year shareholders’ equity increased $6.3 million, or 25.4%, from $25.1 million as of March 31, 2024.

As of March 31, 2025, book value per share increased to $122.11 from $116.68 per share at December 31, 2024 and $96.54 per share at March 31, 2024.

The Bank’s regulatory capital ratios remain above applicable regulatory requirements for well-capitalized institutions under the Prompt Corrective Action framework. The Tier 1 capital ratio increased to 7.79% from 7.62% at December 31, 2024 and 7.52% at March 31, 2024. The ratio of Common Equity Tier 1 capital and Tier 1 capital to risk weighted assets was 12.31%, 12.66% and 11.43% at March 31, 2025, December 31, 2024, and March 31, 2024, respectively. The total risk-based capital ratio was 13.54%, 13.91% and 12.64% at March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Management maintains regular monitoring of capital planning strategies to support and maintain adequate capital levels.

Asset Quality

As of March 31, 2025, the credit quality of the loan portfolio remained strong with historically low levels of past dues, nonaccruals and charge offs. As of March 31, 2025, total past due loans were $127 thousand, or 0.03% of total loans, compared to $134 thousand, or 0.03%, of total loans at December 31, 2024, and $1.2 million, or 0.32% of total loans, as of March 31, 2024. There was one consumer loan with a balance of $29 thousand that was past due 90 days and still accruing interest. There were no loans past due more than 90 days and still accruing interest at December 31, 2024 and March 31, 2024. As of March 31, 2025, there was no change to nonperforming loans with only one nonaccrual loan totaling $47 thousand, when compared to December 31, 2024 and a slight decline from $59 thousand on March 31, 2024.

For the quarter ended March 31, 2025, net charge offs totaled $70 thousand and were primarily related to consumer loans. There were no net charge offs for the quarter ended March 31, 2024. Provision for credit losses totaled $75 thousand for the quarter ended March 31, 2025. The Company recorded a $42 thousand provision for credit losses on loans and a $33 thousand provision for credit losses on unfunded commitments. For the quarter ended March 31, 2024, the provision for credit losses totaled $120 thousand, which was comprised of a $158 thousand provision for credit losses on loans, offset by a $38 thousand recovery of credit losses on unfunded commitments.

As of March 31, 2025, the allowance for credit losses was $4.1 million, or 1.05% of total loans, compared to $4.1 million, or 1.07% as of December 31, 2024, and $4.0 million, or 1.07% as of March 31, 2024. Based on a review of the loans that were in the loan portfolio at March 31, 2025, management believes that the allowance for credit losses related to loans is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

As of March 31, 2025, the Company’s allowance for credit losses related to off-balance sheet commitments totaled $187 thousand, compared to $154 thousand at December 31, 2024 and $197 thousand at March 31, 2024.

There was no allowance for credit losses related to held-to-maturity debt securities at March 31, 2025, December 31, 2024 and March 31, 2024.

About JSB Financial Inc.

JSB Financial Inc. (OTC Pink: JFWV) is the holding company for Jefferson Security Bank, an independent community bank operating six banking offices located in Berkeley County and Jefferson County, West Virginia and Washington County, Maryland. Founded in 1869, Jefferson Security Bank serves individuals, businesses, municipalities and community organizations through a comprehensive suite of banking services delivered by an exceptional team who put customers first. Jefferson Security Bank has received industry recognition by American Banker magazine five years in a row. Most recently, as a Top 100 Community Bank in 2024 and prior as a Top 200 Community Bank for four consecutive years. Operating for over 155 years, Jefferson Security Bank is the oldest, independent, locally owned, and managed bank in West Virginia. 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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