JSB Financial Inc. (OTCPK: JFWV) reported net income of $671
thousand for the quarter ended March 31, 2024, representing a
decrease of $214 thousand or 24.2% when compared to $885 thousand
for first quarter of 2023. Basic and diluted earnings per common
share were $2.61 and $3.21 for the first quarter of 2024 and 2023,
respectively. Annualized return on average assets and average
equity for March 31, 2024 was 0.53% and 10.75%, respectively, and
0.76% and 15.37%, respectively, for March 31, 2023.
“Through the first quarter, we are pleased to demonstrated
stabilization in our net interest margin and an improved book value
per share of $97.40 compared to $86.24 one year ago,” said
President and Chief Executive Officer, Cindy Kitner. “Our
operational performance has remained stable, and we are proud to
have increased deposits by $32.0 million and loans by $18.3
million. We remain confident in the credit quality of our loan
portfolio. Our growth through the first quarter is a testament to
our team and their commitment to building long-lasting
relationships with our customers throughout the communities we
serve.”
Net Interest Income
For the first quarter of 2024, net interest income totaled $3.2
million, representing an increase of $42 thousand, or 1.3%, from
$3.1 million for the first quarter of 2023. Interest and fees on
loans increased year-over-year as the Company continued to
organically grow the loan portfolio, which was primarily led by
commercial real estate. This activity contributed to the improved
loan yields over the prior year due to the higher interest rates as
well as the continued repricing of the Company’s variable rate loan
portfolio. Interest and fees on loans totaled $4.7 million and $3.5
million for the first quarter of 2024 and 2023, respectively.
Total interest expense was $2.3 million for the first quarter of
2024, representing an increase of $1.1 million when compared to
$1.2 million for the first quarter 2023. The increase in total
interest expense was driven by higher costs of interest-bearing
deposits, a shift in the deposit mix in favor of higher cost
customer deposits and an increase in borrowings.
Net interest margin decreased slightly to 2.65% for the first
quarter of 2024, a decline of six basis points from December 31,
2023 and 23 basis points from March 31, 2023. This decline from
year-end and prior year is primarily due to higher funding costs
for deposits and borrowed funds.
Balance Sheet
Total assets were $531.2 million as of March 31, 2024, an
increase of $30.6 million, or 6.1%, from $500.6 million as of
December 31, 2023. Year-over-year total assets increased $38.3
million, or 7.8%, from $492.9 million as of March 31, 2023.
Loans, net of the allowance for credit losses, reached a record
level of $366.3 million as of March 31, 2024, an increase of $18.3
million, or 5.3%, from $347.9 million as of December 31, 2023.
Year-over-year net loans grew $52.0 million, or 16.6%, from $314.2
million as of March 31, 2023.
Deposits totaled $458.1 million as of March 31, 2024, an
increase of $32.0 million, or 7.5%, from $426.1 million as of
December 31, 2023. Noninterest bearing deposits represent 25.9% of
total deposits as of March 31, 2024, which is down from 26.4% as of
December 31, 2023. Year-over-year total deposits increased $41.4
million, or 9.9%, from $416.7 million as of March 31, 2023. The
current rate environment has contributed to greater competition for
deposits with additional deposit rate specials being offered to
attract new funds. The Company has experienced an increase in
consumer certificates of deposit specifically related to these
specials. The Company leveraged brokered deposits in the first
quarter of 2024, which also attributed to the increase in deposits
compared to December 31, 2023 and March 31, 2023.
Total borrowings decreased $2.0 million since December 31, 2023
and $5.4 million from March 31, 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 $226.4 million as of March 31, 2024. FHLB borrowings
totaled $16.1 million and borrowings through the Bank Term Funding
Program (BTFP) totaled $28.0 million as of March 31, 2024.
As of March 31, 2024 stockholders’ equity was $25.1 million,
representing an increase of $121 thousand from $25.0 million at
December 31, 2023. As of March 31, 2024, book value per share
improved to $97.40 from $96.93 per share at December 31, 2023.
Year-over-year stockholders’ equity increased $1.3 million, or
5.5%, from $23.8 million as of March 31, 2023. The regulatory
capital ratios remain in excess of applicable regulatory
requirements for well-capitalized institutions. The Tier 1 capital
ratio decreased to 7.52% from 7.65% at December 31, 2023 and 8.08%
at March 31, 2023. The ratio of Common Equity Tier 1 capital and
Tier 1 capital to risk weighted assets was 11.43%, 12.40% and
13.53% at March 31, 2024, December 31, 2023 and March 31, 2023,
respectively. The total risk-based capital ratio was 12.64%, 13.65%
and 14.78% at March 31, 2024, December 31, 2023 and March 31, 2023
respectively. The decline in the regulatory capital ratios reflects
the impact of organic loan growth and the increase in total assets
through the first three months of 2024. Management maintains
regular monitoring of capital planning strategies to support and
maintain adequate capital levels.
Asset Quality
As of March 31, 2024, the credit quality of the loan portfolio
remained strong with nonaccrual loans totaling $49 thousand, or
0.01% of total loans, compared to $51 thousand at December 31, 2023
and $60 thousand at March 31, 2023. As of March 31, 2024, total
past due loans increased to $1.2 million, or 0.32% of total loans,
compared to $385 thousand, or 0.11%, of total loans at December 31,
2023 and $144 thousand, or 0.05% of total loans, as of March 31,
2023. There were no net charge offs for the first quarter of 2024,
compared to net charge offs of $1 thousand for the same period in
2023.
As of March 31, 2024, the allowance for credit losses was $4.0
million, or 1.07% of total loans, compared to $3.8 million, or
1.08% as of December 31, 2023 and $3.6 million, or 1.14% as of
March 31, 2023.
The provision for credit losses totaled $120 thousand for the
first quarter of 2024. The Company recorded a $158 thousand
provision for credit losses on loans and a recovery of provision
for credit losses on unfunded commitments of $38 thousand. For the
first three months of 2023, total provision for credit losses was
$18 thousand, which comprised of a $68 thousand provision for
credit losses on loans and a $50 thousand recovery of credit losses
on unfunded commitments.
First Quarter Highlights Compared to Fourth Quarter of
2023
Net income for the first quarter of 2024 totaled $671 thousand,
a decrease of $33 thousand, or 4.66%, from net income of $704
thousand for the fourth quarter of 2023. During the first quarter,
net interest income increased by $47 thousand, or 1.5%, from the
fourth quarter of 2023. 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 and a continued shift in the deposit mix resulting in
higher interest bearing balances.
Provision for credit losses totaled $120 thousand, representing
a $50 thousand decrease during the first quarter, when compared to
provision for loan losses of $170 thousand for the fourth quarter
of 2023. The provision for credit losses increased due to the
growth of the loan portfolio. The increase in the provision for
credit losses was funded by the recovery of credit losses on
unfunded commitments.
When comparing March 31, 2024 to December 31, 2023, total assets
increased $30.6 million, or 6.1%, loans, net of the allowance for
credit losses, increased by $18.3 million, or 5.3%, and total
deposits increased $32.1 million, or 7.5%.
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 as a Top 200 Community Bank by American Banker magazine
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/20240617455581/en/
Jenna Kesecker, CPA, Executive Vice President and Chief
Financial Officer 304-876-9016