Company Website: https://www.jsb.bank
SHEPHERDSTOWN, W.Va. -- (Business Wire)

JSB Financial Inc. (the Company) (OTCID: JFWV), the bank holding company of Jefferson Security Bank (the Bank), reported unaudited net income of $1.6 million for the second quarter of 2026, representing an increase of $642 thousand, or 65.0% when compared to $987 thousand for second quarter of 2025. Basic and diluted earnings per common share were $6.33 and $3.83 for the second quarter of 2026 and 2025, respectively. For the first six months of 2026, net income was $2.8 million, representing an increase of $1.0 million, or 61.3%, when compared to $1.7 million for the first six months of 2025. Basic and diluted earnings per common share were $10.72 and $6.65 for the first six months of 2026 and 2025, respectively.

Annualized return on average assets and average equity for June 30, 2026 was 0.97% and 14.53%, respectively, and 0.63% and 11.06%, respectively, for June 30, 2025.

“Our second quarter performance reflects the strength in relationship banking and the continued trust our customers place in us,” said President and Chief Executive Officer, Cindy Kitner. “We remain focused on disciplined growth while executing our strategic priorities to deliver personalized solutions to individuals and families in the communities we serve. We are proud of our team’s commitment to service which enables us to produce solid financial performance while continuing to invest in our communities.”

Income Statement Highlights

Net interest income totaled $5.0 million for the second quarter of 2026, an increase of $1.2 million, or 30.2%, compared to $3.8 million for the same period in 2025. Total interest and dividend income was $7.3 million, representing an increase of $820 thousand, or 12.7%, from $6.5 million for the second quarter of 2025. This change was primarily due to an increase of $867 thousand in interest income on loans, offset in part by a decline in interest income on investment securities of $32 thousand.

For the second quarter of 2026, total interest expense was $2.3 million, representing a decline of $335 thousand, or 12.7%, from $2.6 million for the second quarter of 2025. This was primarily due to a decrease in expense on interest-bearing deposits of $272 thousand.

Noninterest income for the second quarter of 2026 totaled $736 thousand, compared to $604 thousand for the second quarter of 2025. Noninterest expense for the second quarter of 2026 and 2025 was $3.6 million and $3.1 million, respectively. The increase of $432 thousand in noninterest expense was primarily related to an increase in expenses for salaries and employee benefits.

Net interest margin for the second quarter of 2026 was 3.66%, an increase of 72 basis points when compared to 2.94% for the second quarter of 2025. The increase was related to higher yields on the loan portfolio and lower cost of funds.

For the six months ended June 30, 2026, net interest income totaled $9.4 million, representing an increase of $2.1 million, or 28.4%, when compared to $7.4 million for the same period in 2025. Total interest and dividend income was $14.1 million, representing an increase of $1.4 million, or 11.5%, from $12.7 million for the six months ended June 30, 2025. Interest income on loans increased $1.5 million, primarily due to higher average balances and portfolio yields. This positive change to interest income was in part offset by a decrease in interest income on the investment portfolio of $57 thousand.

Total interest expense was $4.7 million for the first six months ended June 30, 2026, this represents an decrease of $632 thousand, or 11.9% when compared to $5.3 million for the same period in 2025. The decrease in total interest expense was due to a decrease in interest expense on interest-bearing deposits of $486 million and a decrease in interest expense on borrowings of $146 thousand.

Noninterest income totaled $1.3 million and $1.2 million for the first six months ended June 30, 2026 and 2025, respectively. Noninterest expense totaled $7.1 million and $6.3 million for the first six months ended June 30, 2026 and 2025, respectively. The increase of $823 thousand in noninterest expense was primarily related to an increase in expenses for salaries and employee benefits.

Net interest margin improved to 3.49% for the six months ended June 30, 2026, an increase of 64 basis points when compared to 2.85% for the six months ended June 30, 2025. This resulted from higher yields on earning assets and lower cost of funds.

Balance Sheet Highlights

Total assets were $566.1 million at June 30, 2026, an increase of $3.9 million, or 0.7%, from $562.2 million at December 31, 2025. Year-over-year total assets increased $14.4 million, or 2.6%, from $551.7 million at June 30, 2025.

Cash and cash equivalents decreased $2.9 million, or 9.4% to $28.0 million at June 30, 2026 from $30.9 million at December 31, 2025. The decrease in cash and cash equivalents was the result of funding organic growth of the loan portfolio. Year-over-year cash and cash equivalents decreased slightly by $639 thousand, or 2.2% from $28.6 million at June 30, 2025.

Loans, net of the allowance for credit losses on loans, reached $411.8 million at June 30, 2026, an increase of $10.0 million, or 2.5%, from $401.8 million at December 31, 2025. This increase was primarily attributed to organic loan growth in both the residential real estate and commercial real estate portfolios. Year-over-year net loans grew $20.6 million, or 5.3%, from $391.2 million at June 30, 2025.

Investment securities, excluding restricted securities, were $100.7 million at June 30, 2026, a decrease of $3.6 million, or 3.4%, from $104.3 million at December 31, 2025. The decline in the investment portfolio was primarily related to maturities and principal paydowns on available for sale securities totaling $6.2 million and an increase in unrealized losses on available for sale securities totaling $247 thousand. These changes were offset by the purchase of available for sale mortgage-backed securities totaling $2.8 million, and amortization of unrealized holding losses on held to maturity securities of $330 thousand. Year-over-year investment securities, excluding restricted securities, decreased $6.4 million, or 5.9%, from $107.1 million at June 30, 2025.

Deposits totaled $522.4 million at June 30, 2026, an increase of $3.5 million, or 0.67%, from $518.9 million at December 31, 2025. Brokered deposits matured during the second quarter of 2026, resulting in a decline of $25.1 million in interest bearing deposits at June 30, 2026 compared to December 31, 2025. Year-over-year total deposits increased $19.5 million, or 3.9%, from $502.9 million at June 30, 2025.

There were no borrowings as of June 30, 2026, representing a decrease of $2.1 million since December 31, 2025 and a decrease of $11.5 million from June 30, 2025. 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 $267.4 million at June 30, 2026.

As of June 30, 2026 shareholders’ equity was $39.2 million, representing an increase of $2.4 million from $36.8 million at December 31, 2025. As of June 30, 2026, book value per share improved to $152.27 from $142.76 per share at December 31, 2025. Year-over-year shareholders’ equity increased $6.2 million, or 18.8%, from $33.0 million at June 30, 2025.

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 8.39% at June 30, 2026 from 8.12% at December 31, 2025 and 7.89% at June 30, 2025. The ratio of Common Equity Tier 1 capital and Tier 1 capital to risk weighted assets was 12.97%, 12.66% and 12.63% at June 30, 2026, December 31, 2025 and June 30, 2025, respectively. The total risk-based capital ratio was 14.22%, 13.91% and 13.88% at June 30, 2026, December 31, 2025 and June 30, 2025 respectively. Management maintains regular monitoring of capital planning strategies to support and maintain adequate capital levels.

Asset Quality

Asset quality remains strong with historically low levels of past dues and nonperforming assets defined as loans 90 days or more delinquent, nonaccrual loans and other real estate owned. As of June 30, 2026, loans past due 30 to 89 days and still accruing interest totaled $8 thousand, compared to $136 thousand, or 0.03%, of total loans at December 31, 2025, and $509 thousand, or 0.13% of total loans at June 30, 2025.

On June 30, 2026, there were no loans that were past due 90 days and still accruing interest, representing no change compared to December 31, 2025 and a decline from one residential real estate loan with a balance of $26 thousand at June 30, 2025. There was one nonaccrual loan totaling $40 thousand, or 0.01% of total loans at June 30, 2026. There were three nonaccrual loans totaling $287 thousand, or 0.07% of total loans at December 31, 2025. There were two nonaccrual loans totaling $56 thousand, or 0.01% of total loans at June 30, 2025. The outstanding nonaccrual loan is considered collateral dependent and has been individually evaluated for impairment.

Allowance and Provision for Credit Losses

The Company recorded a provision for credit losses on loans of $135 thousand for the quarter ended June 30, 2026, compared to $153 thousand for the fourth quarter of 2025 and $75 thousand for the second quarter of 2025.

For the quarter ended June 30, 2026, net charge offs totaled $28 thousand and were primarily related to consumer loans, compared to net charge offs of $16 thousand for the fourth quarter of 2025 and $11 thousand for the second quarter of 2025.

At June 30, 2026, the allowance for credit losses for loans was $4.6 million, or 1.12% of total loans, compared to $4.4 million, or 1.08% as of December 31, 2025, and $4.1 million, or 1.05% as of June 30, 2025. The increase in the allowance for credit losses was primarily attributed to new loan volume and change in the weighted average remaining maturity of the loan portfolio. There were no specific reserves at June 30, 2026, December 31, 2025 and June 30, 2025. Loans considered collateral dependent totaled $1.8 million at June 30, 2026, $2.0 million at December 31, 2025 and $2.2 million at June 30, 2025. Management believes that the allowance for credit losses related to loans is adequate to provide for expected credit losses within the loan portfolio at June 30, 2026.

The allowance for credit losses on unfunded commitments totaled $151 thousand on June 30, 2026, $206 thousand on December 31, 2025, and $187 thousand on June 30, 2025. The Company recorded a release of provisions for credit losses on unfunded commitments totaling $30 thousand for the second quarter of 2026 and a provision for credit losses on unfunded commitments totaling $5 thousand for the fourth quarter 2025. There was no provision for the second quarter of 2025.

There was no allowance for credit losses on investment securities at June 30, 2026, December 31, 2025 and June 30, 2025.

About JSB Financial Inc.

JSB Financial Inc. (OTCID: 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 as a Top 200 Community Bank in 2026, Top 100 Community Bank in 2024 and previously recognized as a Top 200 Community Bank for four consecutive years from 2020 to 2023. Operating for over 155 years, Jefferson Security Bank is the oldest, independent, locally owned and managed bank in West Virginia. Visit www.JSB.bankfor 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, Charles Town, WV (304-725-9752)

277 Mineral Drive, Inwood, WV (304-229-6000)

1861 Edwin Miller Boulevard, Martinsburg, WV (304-264-0900)

103 West Main Street, Sharpsburg, MD (301-432-3900)

View source version on businesswire.com: https://www.businesswire.com/news/home/20260807623106/en/

Contacts:

Jenna Kesecker, CPA, Executive Vice President
and Chief Financial Officer
304-876-9016

Source: JSB Financial Inc.