JSB Financial Inc. (OTC PINK: JFWV) reported net income of $793
thousand for the second quarter of 2024, representing a decrease of
$12 thousand or 1.74% when compared to $805 thousand for second
quarter of 2023. Basic and diluted earnings per common share were
$3.08 and $2.92 for the second quarter of 2024 and 2023,
respectively. For the first six months of 2024, net income
decreased $227 thousand, or 13.4%, to $1.5 million when compared to
$1.7 million for the first six months of 2023. Basic and diluted
earnings per common share were $5.68 and $6.13 for the first six
months of 2024 and 2023, respectively. Annualized return on average
assets and average equity for June 30, 2024 was 0.56% and 11.68%,
respectively, and 0.72% and 14.39%, respectively, for June 30,
2023.
“Through the first half of 2024, we generated moderate loan
growth throughout our market area, while maintaining strong credit
quality metrics,” said President and Chief Executive Officer, Cindy
Kitner. “While we are still operating in a challenging interest
rate environment, we remain focused on maintaining a disciplined
approach to loan and deposit pricing and optimizing our funding
strategies from a pricing and composition perspective. We also
remain keenly focused on the needs of our customers and optimistic
about our team’s ability to drive value for our customers,
communities and shareholders.”
Net Interest Income
For the six months ended June 30, 2024, net interest income
totaled $6.4 million, representing an increase of $262 thousand, or
4.2%, when compared to $6.2 million for the same period in 2023.
This resulted from an increase in interest income of $2.5 million,
which was partially offset by an increase in interest expense of
$2.3 million.
Net interest income of $3.3 million for the second quarter of
2024 increased $220 thousand, or 7.2%, compared to $3.0 million in
the second quarter of 2023. Total interest income increased by $1.4
million, or 30.3% to $6.0 million for the second quarter of 2024
from $4.6 million from the same period in 2023. This increase was
mostly due to a continued expansion of the yield on average loans
as interest and fees on loans totaled $5.0 million for the second
quarter of 2024, representing an increase of $1.3 million, or
33.3%, from $3.7 million for the same period in 2023. The Company
experienced moderate organic loan growth, which contributed to the
improved loan yields as well as the continued repricing of the
variable rate loan portfolio. Interest income on deposits with
other banks increased $173 thousand resulting from higher cash
balances throughout the quarter.
Total interest expense of $2.7 million for the second quarter of
2024, represents an increase of $1.2 million, or 75.2% when
compared to $1.5 million for the second quarter 2023. The increase
in total interest expense primarily resulted from an increase in
interest expense on deposits as the average balances of
interest-bearing deposits grew due to a shift in the deposit mix in
favor of higher cost customer time deposits.
Net interest margin decreased slightly to 2.62% for the second
quarter of 2024, a decline of nine basis points from December 31,
2023 and 17 basis points from June 30, 2023. The decline in the net
interest margin is due to the higher cost of funds for both
deposits and borrowings.
Balance Sheet
Total assets were $542.1 million as of June 30, 2024, an
increase of $41.5 million, or 8.3%, from $500.6 million as of
December 31, 2023. Year-over-year total assets increased $66.9
million, or 14.1%, from $475.2 million as of June 30, 2023.
Loans, net of the allowance for credit losses, reached a record
level of $374.0 million as of June 30, 2024, an increase of $26.0
million, or 7.5%, from $347.9 million as of December 31, 2023. This
increase was primarily attributed to new commercial real estate
loan production, as well as organic residential real estate loan
volume which also contributed to the growth in total loans during
the second quarter and first half of 2024. Year-over-year net loans
grew $50.8 million, or 15.7%, from $323.1 million as of June 30,
2023.
Deposits totaled $468.6 million as of June 30, 2024, an increase
of $42.5 million, or 10.0%, from $426.1 million as of December 31,
2023. Noninterest bearing deposits represent 25.2% of total
deposits as of June 30, 2024, which is down slightly from 26.4% as
of December 31, 2023. Year-over-year total deposits increased $53.8
million, or 13.0%, from $414.8 million as of June 30, 2023. The
interest rate environment has contributed to greater competition
for deposits with additional deposit rate specials being offered
through the first six months of 2024. The Company has experienced
an increase in consumer certificates of deposit specifically
related to these specials. The Company continued to leverage
brokered deposits in the second quarter of 2024, which also
attributed to the increase in total deposits of $24.8 million when
comparing June 30, 2024 to December 31, 2023 and June 30, 2023.
Total borrowings decreased $2.8 million since December 31, 2023
and increased by $9.7 million from June 30, 2023. The Company
maintains on and off-balance sheet liquidity through cash and cash
equivalents, unpledged securities at fair value, FHLB and Federal
Reserve borrowing capacities and unsecured correspondent bank lines
of credit. In total, on and off-balance sheet liquidity sources
exceeded $277.6 million on June 30, 2024. FHLB borrowings totaled
$15.3 million and borrowings through the Bank Term Funding Program
(BTFP) totaled $28.0 million on June 30, 2024.
As of June 30, 2024 stockholders’ equity was $25.9 million,
representing an increase of $938 thousand from $25.0 million at
December 31, 2023. As of June 30, 2024, book value per share
improved to $100.58 from $96.93 per share at December 31, 2023.
Year-over-year stockholders’ equity increased $2.1 million, or
8.9%, from $23.8 million as of June 30, 2023. Regulatory capital
ratios remain in excess of applicable regulatory requirements for
well-capitalized institutions. The Tier 1 capital ratio decreased
to 7.31% at June 30, 2024 from 7.65% at December 31, 2023 and 8.07%
at June 30, 2023. The ratio of Common Equity Tier 1 capital and
Tier 1 capital to risk weighted assets was 12.02%, 12.40% and
13.40% at June 30, 2024, December 31, 2023 and June 30, 2023,
respectively. The total risk-based capital ratio was 13.27%, 13.65%
and 14.66% at June 30, 2024, December 31, 2023 and June 30, 2023
respectively. The decline in the regulatory capital ratios reflects
the impact of organic loan growth and the increase in total assets
as of June 30, 2024 when compared to December 31, 2023 and June 30,
2023. Management maintains regular monitoring of capital planning
strategies to support and maintain adequate capital levels.
Asset Quality
As of June 30, 2024, the credit quality of the loan portfolio
remained strong with nonaccrual loans totaling $48 thousand, or
0.01% of total loans, compared to $51 thousand at December 31, 2023
and $54 thousand at June 30, 2023. As of June 30, 2024, total past
due loans increased to $838 thousand, or 0.22% of total loans,
compared to $385 thousand, or 0.11%, of total loans at December 31,
2023 and $229 thousand, or 0.07% of total loans, as of June 30,
2023. There were no loans past due 90 days and still accruing
interest as of June 30, 2024 and December 31, 2023, with $131
thousand as of June 30, 2023. There were no net charge offs for the
second quarter of 2024 and 2023.
At June 30, 2024, the allowance for credit losses for loans
totaled $4.0 million, or 1.07% of total loans, compared to $3.8
million, or 1.08% as of December 31, 2023 and $3.7 million, or
1.13% as of June 30, 2023.
During the second quarter, a provision for credit losses was
recorded totaling $60 thousand. The provision was comprised of a
$90 thousand provision for credit losses on loans and a recovery of
credit losses on unfunded commitments of $30 thousand. The increase
in the provision was mainly due to an increase in the general
reserve from increased loan originations and not related to
quantitative reserve allocations, specific reserves or charge-offs.
For the second quarter of 2023, the provision for credit losses
totaled $29 thousand, which was comprised of a $75 thousand
provision for credit losses on loans and a $46 thousand recovery of
credit losses on unfunded commitments.
Second Quarter Highlights Compared to First Quarter of
2024
Net income for the second quarter of 2024 totaled $793 thousand,
representing an increase of $122 thousand, or 17.9%, from net
income of $671 thousand for the first quarter of 2024. During the
second quarter, net interest income increased by $92 thousand, or
2.9%, from the first quarter of 2024. The increase in net interest
income was in part driven by continued growth in loans and rising
yields on earning assets. These changes were offset by an increase
in interest expense due to the higher cost of interest bearing
deposits from a continued shift in the deposit mix resulting in
higher interest bearing balances, including time deposits.
For the second quarter of 2024, provision for credit losses
totaled $60 thousand, representing a decline of $60 thousand, when
compared to provision for credit losses of $120 thousand for the
first quarter of 2024. The provision for credit losses on loans was
$90 thousand and $158 thousand and the recovery of credit losses on
unfunded commitments was $30 thousand and $38 thousand as of June
30, 2024 and March 31, 2024, respectively.
When comparing June 30, 2024 to March 31, 2024, total assets
increased $10.9 million, or 2.1%, loans, net of the allowance for
credit losses, increased by $7.7 million, or 2.1%, and total
deposits increased $10.4 million, or 2.3%.
Subsequent Event
On August 8, 2024, the Company received payment on several prior
nonperforming loans. The payment resulted in the recognition of an
interest recovery totaling $1.3 million, a recovery to the
allowance for credit losses on loans totaling $252 thousand and a
recovery of legal fees totaling $17 thousand.
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 as a Top 100 Community Bank
in 2024 and was previously recognized as a Top 200 Community Bank
for four years in a row. 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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version on businesswire.com: https://www.businesswire.com/news/home/20240819035244/en/
Jenna Kesecker, CPA, Executive Vice President and Chief
Financial Officer 304-876-9016