JSB Financial Inc. Reports Third Quarter 2026 Results

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 $1.3 million for the third quarter of 2026, representing an increase of $207 thousand, or 18.3%, when compared to $1.1 million for third quarter of 2025. Basic and diluted earnings per common share were $5.20 and $4.40 for the third quarter of 2026 and 2025, respectively. For the first nine months of 2026, net income was $4.1 million, representing an increase of $1.3 million, or 44.2%, when compared to $2.8 million for the first nine months of 2025. Basic and diluted earnings per common share were $15.93 and $11.05 for the first nine months of 2026 and 2025, respectively.

Annualized return on average assets and average equity for September 30, 2026 was 0.96% and 14.18%, respectively, and 0.70% and 11.92%, respectively, for September 30, 2025.

“We are pleased with our third quarter results which reflect the strength of our customer relationships and our continued commitment to responsible growth,” said President and Chief Executive Officer, Cindy Kitner. “We remain encouraged by opportunities we see to support our customers and the communities we serve. While the economic environment continues to present challenges, we are focused on maintaining a strong financial foundation, making sound lending decisions and positioning the bank for long-term success. As we look ahead, we remain committed to building on the momentum we have generated and staying true to our core values.”

PERFORMANCE MEASURES
	September 30,		June 30,		December 31,		September 30,
	2026		2026		2025		2025
AT PERIOD END
(Dollars in thousands)
Assets	$	579,839	$	566,111	$	562,182	$	5,554,763
Loans, net		421,450		411,779		401,786		394,362
Deposits		532,977		522,393		518,908		513,321
Shareholders' Equity		38,718		39,207		36,757		34,525

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2026			2026			2025			2026			2025
EARNINGS SUMMARY
Interest and dividend income	$	7,295		$	7,288		$	6,604		$	21,420		$	19,270
Interest expense		2,377			2,302			2,614			7,056			7,925
Net interest income		4,918			4,986			3,990			14,364			11,345
Provision for loan losses		135			105			128			355			278
Net interest income after provision		4,783			4,881			3,862			14,009			11,067
Noninterest income		707			736			634			2,027			1,805
Noninterest expense		3,814			3,567			3,079			10,903			9,345
Income before taxes		1,676			2,050			1,417			5,133			3,527
Income taxes		336			421			284			1,032			683
Net income	$	1,340		$	1,629		$	1,133		$	4,101		$	2,844
PER SHARE DATA
Weighted average diluted shares		257,483			257,483			257,483			257,483			257,483
Earnings per share	$	5.20		$	6.33		$	4.40		$	15.93		$	11.05
Book value per share	$	150.37		$	152.27		$	134.09		$	150.37		$	134.09
RETURN ON AVERAGE ASSETS
Average assets	$	575,498		$	570,481		$	548,823		$	571,811		$	545,393
Return on average assets		0.93	%		1.14	%		0.83	%		0.96	%		0.70	%
RETURN ON AVERAGE EQUITY
Average shareholders' equity	$	39,652		$	38,503		$	33,523		$	38,556		$	31,821
Return on average equity		13.52	%		16.92	%		13.52	%		14.18	%		11.92	%

Income Statement Highlights

Net interest income totaled $4.9 million for the third quarter of 2026, an increase of $928 thousand, or 23.3%, compared to $4.0 million for the same period in 2025. Total interest and dividend income was $7.3 million, representing an increase of $691 thousand, or 10.5%, from $6.6 million for the third quarter of 2025. This change was primarily due to an increase of $734 thousand in interest income on loans, offset in part by a decline in interest income on investment securities of $24 thousand.

For the third quarter of 2026, total interest expense was $2.4 million, representing a decline of $237 thousand, or 9.1%, from $2.6 million for the third quarter of 2025. This change was due to a decline in expense related to interest-bearing deposits of $150 thousand and expense on borrowings of $87 thousand.

Noninterest income for the third quarter of 2026 totaled $707 thousand, compared to $634 thousand for the third quarter of 2025. This increase is primarily related to gains on sale of loans in the secondary market totaling $61 thousand. Noninterest expense for the third quarter of 2026 and 2025 was $3.8 million and $3.1 million, respectively. The increase of $735 thousand in noninterest expense was primarily related to an increase in expenses for salaries and employee benefits, professional services, occupancy and data processing.

Net interest margin for the third quarter of 2026 was 3.57%, an increase of 55 basis points when compared to 3.02% for the third quarter of 2025. The increase was related to higher yields on the loan portfolio and lower cost of funds.

For the nine months ended September 30, 2026, net interest income totaled $14.3 million, representing an increase of $3.0 million, or 26.6%, when compared to $11.3 million for the same period in 2025. Total interest and dividend income was $21.4 million, representing an increase of $2.2 million, or 11.2%, from $19.3 million for the nine months ended September 30, 2025. Interest income on loans increased $2.2 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 $81 thousand.

Total interest expense was $7.1 million for the nine months ended September 30, 2026, this represents a decrease of $869 thousand, or 11.0% when compared to $7.9 million for the nine months ended September 30, 2025. The change in interest expense was due to a decline in expense related to interest-bearing deposits of $636 thousand and expense on borrowings of $233 thousand.

Noninterest income totaled $2.0 million and $1.8 million for the nine months ended September 30, 2026 and 2025, respectively. This increase is primarily due to increases in brokered mortgage fees, gains on sale of loans in the secondary market, ATM and debit card fees and other service charges, offset by realized losses on investment securities and a decline in service charges on deposit accounts. Noninterest expense totaled $10.9 million and $9.3 million for the first nine months ended September 30, 2026 and 2025, respectively. The increase of $1.6 million in noninterest expense was primarily related to an increase in expenses for salaries and employee benefits, occupancy and data processing.

Net interest margin improved to 3.51% for the nine months ended September 30, 2026, an increase of 60 basis points when compared to 2.91% for the nine months ended September 30, 2025. This resulted from higher yields on earning assets and lower cost of funds.

Balance Sheet Highlights

Total assets were $579.8 million at September 30, 2026, an increase of $17.6 million, or 3.1%, from $562.2 million at December 31, 2025. Year-over-year total assets increased $25.0 million, or 4.5%, from $554.8 million at September 30, 2025.

Cash and cash equivalents decreased $2.5 million, or 8.2% to $28.4 million at September 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 $1.9 million, or 6.3% from $30.3 million at September 30, 2025.

Loans, net of the allowance for credit losses on loans, reached $421.4 million at September 30, 2026, an increase of $19.6 million, or 4.9%, 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 $27.0 million, or 6.9%, from $394.4 million at September 30, 2025.

Investment securities, excluding restricted securities, were $103.2 million at September 30, 2026, a decrease of $1.1 million, or 1.0%, from $104.3 million at December 31, 2025. The decline in the investment portfolio was primarily related to calls and principal paydowns on available for sale securities totaling $5.2 million, sales of available for sale securities totaling $2.8 million and an increase in unrealized losses on available for sale securities totaling $2.3 million. These changes were offset by the purchase of available for sale and held to maturity securities totaling $9.0 million and amortization of unrealized holding losses on held to maturity securities of $494 thousand. Year-over-year investment securities, excluding restricted securities, decreased $2.4 million, or 2.3%, from $105.6 million at September 30, 2025.

Deposits totaled $533.0 million at September 30, 2026, an increase of $14.1 million, or 2.7%, from $518.9 million at December 31, 2025. Brokered deposits matured and were repaid during the second quarter of 2026, totaling $25.1 million. This was funded through organic core deposit growth. Year-over-year total deposits increased $19.7 million, or 3.8%, from $513.3 million at September 30, 2025.

There were $3.3 million in borrowings as of September 30, 2026, representing an increase of $1.3 million since December 31, 2025 and an increase of $717 thousand from September 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 $269.6 million at September 30, 2026.

As of September 30, 2026, shareholders’ equity was $38.7 million, representing an increase of $1.9 million, or 5.3%, from $36.8 million at December 31, 2025. Year-to-date earnings contributed $4.1 million to the increase in shareholders’ equity partially offset by an increase in accumulated other comprehensive loss of $1.4 million. This change was primarily due to an increase in unrealized losses on available for sale securities of $1.8 million offset in part by amortization of unrealized holding losses on held to maturity securities of $371 thousand as of September 30, 2026. During the third quarter 2026, the Company declared and paid a regular semi-annual cash dividend of $1.55 per share payable on September 11, 2026. This dividend was an increase from the previous semi-annual dividend resulting in an annual dividend of $3.00 per share and total dividends paid of $772 thousand in 2026. Year-over-year shareholders’ equity increased $4.2 million, or 12.1%, from $34.5 million at September 30, 2025. As of September 30, 2026, book value per share improved to $150.37 per share from $142.76 per share at December 31, 2025 and $134.09 per share at September 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 8.48% at September 30, 2026 from 8.12% at December 31, 2025 and 8.02% at September 30, 2025. The ratio of Common Equity Tier 1 capital and Tier 1 capital to risk weighted assets was 12.83%, 12.66% and 12.45% at September 30, 2026, December 31, 2025 and September 30, 2025, respectively. The total risk-based capital ratio was 14.08%, 13.91% and 13.70% at September 30, 2026, December 31, 2025 and September 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 September 30, 2026, loans past due 30 to 89 days and still accruing interest totaled $680 thousand, or 0.16% of total loans, compared to $136 thousand, or 0.03% of total loans, at December 31, 2025, and $30 thousand, or 0.01% of total loans, at September 30, 2025.

As of September 30, 2026, there were no loans past due 90 days and still accruing interest, representing no change compared to December 31, 2025 and a decline from $252 thousand at September 30, 2025. As of September 30, 2026, there were no nonaccrual loans, representing a decline from three nonaccrual loans totaling $287 thousand, or 0.07% of total loans, at December 31, 2025 and one nonaccrual loan totaling $40 thousand, or 0.01% of total loans, at September 30, 2025.

Provision for Credit Losses

The provision for credit losses totaled $135 thousand for the third quarter of 2026, compared to provision for credit losses of $128 thousand for the third quarter of 2025. The current quarter provision for credit losses was comprised of provisions for loan losses totaling $118 thousand and provisions for off-balance sheet credit exposures of $17 thousand.

For the first nine months of 2026, the provision for credit losses totaled $355 thousand, compared to provision for credit losses of $278 thousand for the first nine months of 2025. The provision for credit losses for 2026 included a provision for loan losses of $393 thousand and a release of provisions for off-balance sheet credit exposures of $38 thousand.

For the third quarter of 2026, net charge offs totaled $1 thousand, compared to net recoveries of $9 thousand for the third quarter of 2025. Through the nine months ended September 30, 2026, the Company had net charge offs totaling $30 thousand, compared to net charge offs totaling $72 thousand for the nine months ended September 30, 2025 and $88 thousand for the year-ended December 31, 2025.

At September 30, 2026, the allowance for credit losses on loans totaled $4.8 million, or 1.12% of total loans, compared $4.4 million, or 1.08% of total loans, at December 31, 2025, and $4.3 million, or 1.07% of total loans, at September 30, 2025. There were no specific reserves at September 30, 2026, December 31, 2025 and September 30, 2025. Loans considered collateral dependent totaled $1.7 million at September 30, 2026 and $2.0 million at December 31, 2025 and September 30, 2025. The change in the allowance was primarily driven by increasing loan balances and updates to our qualitative framework to reflect evolving macroeconomic conditions. Management believes that the allowance for credit losses on loans is adequate to provide for expected credit losses within the loan portfolio as of September 30, 2026.

The allowance for credit losses on off-balance sheet credit exposures totaled $168 thousand at September 30, 2026, $206 thousand at December 31, 2025, and $201 thousand at September 30, 2025. There was no allowance for credit losses on investment securities at September 30, 2026, December 31, 2025 and September 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 Performing 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 157 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, 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)