Jefferson Security Bank Reports Second Quarter Earnings

Published on: August 5, 2020
Contact: Jenna L. Kesecker
Chief Financial Officer
(304) 876-9016

Shepherdstown, West Virginia – Jefferson Security Bank (OTC Pink: JFWV) reported unaudited net income of $701 thousand for the second quarter of 2020, representing a slight increase from $689 thousand for the same period in 2019. Diluted earnings per share were $2.51 and $2.47 for the second quarter ended 2020 and 2019, respectively. Second quarter earnings reflect a provision for loan loss of $165 thousand, representing an increase of $189 thousand given the $24 thousand credit balance for the second quarter of 2020. This increase is due to the uncertain impact of the economic stress resulting from the Coronavirus (COVID-19) pandemic. Pandemic shutdowns and stay-at-home orders had a negative impact on deposit service charges. These changes were partially offset by realized gains in the investment portfolio totaling $169 thousand.

Net income for the six months ended June 30, 2020, remained stable at $1.32 million, compared to the same period in 2019. Diluted earnings per share were $4.73 and $4.72 for the first six months of 2020 and 2019, respectively. The provision for loan loss had a cumulative effect of increasing loan loss reserves by $325 thousand for the first six months of 2020, an increase of $349 thousand over the same period in 2019. Annualized return on average assets and average equity as of June 30, 2020, decreased slightly as a result of balance sheet growth, to 0.79% and 9.14%, respectively, from 0.85% and 10.70%, respectively, for June 30, 2019.

“Our results reflect continued efforts to execute our strategies while assisting our customers through this difficult time,” said President and Chief Executive Officer Cindy Kitner. “We remain focused on balancing our strategic business initiatives with prudent expense management given the low interest rate environment and uncertainty posed by the pandemic,” added Kitner.

As of June 30, 2020, total assets increased $36.9 million, or 11.8%, to $350.3 million compared to total assets of $313.4 million as of June 30, 2019. Loans, net of the allowance for loan losses, increased $22.5 million, or 10.9%, to $229.1 million at June 30, 2020, compared to $206.6 million at June 30, 2019. Deposits totaled $315.9 million at June 30, 2020, representing an increase of $43.8 million, or 16.1%, compared to $272.1 million at June 30, 2019. Since December 31, 2019, total assets increased $25.9 million, loans, net of the allowance for loans losses, increased $11.8 million and total deposits increased $32.9 million.

“We saw strong balance sheet growth through the second quarter,” said President and CEO Cindy Kitner. “The growth in loans was driven by our participation in the SBA’s Paycheck Protection Program (PPP), while the growth in deposits was attributed to proceeds from PPP loans, government stimulus and conservative consumer spending.”

In response to the challenges from the pandemic, the Bank implemented relief options to support our customers and communities. This included participating in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). As of June 30, 2020, PPP loan balances totaled $15.2 million. The Bank also implemented payment relief options for customers. As of June 30, 2020, total loans on deferral or extension represented 11.9% of total loans outstanding, excluding PPP loans.

“During the second quarter, our team worked countless hours to ensure our customers and local small businesses received the necessary support through PPP funding, loan modifications or other assistance to preserve thousands of jobs in our local communities and provide support for their businesses. For more than 150 years, we have built our Bank with a focus on enriching the lives of our customers, employees and the communities we serve. In the face of current challenges, this purpose continues to guide our resiliency as we adapt to the ever-changing conditions of this pandemic,” added President and CEO Cindy Kitner.

The Bank continues to follow established business continutity and resiliency plans to ensure the health and safety of employees and customers, while maintaining operations of essential banking services. Preventative health measures remain in place including: limiting branch activities to appointment only; encouraging the use of drive-up facilities, digital banking services and curbside banking; following social distancing guidelines; enhancing cleaning of our facilities and utilizing remote work environments, as practicable.

Jefferson Security Bank, founded in 1869, is a community bank engaged in the general banking business in Berkeley County and Jefferson County, West Virginia, and Washington County, Maryland.