JSB Financial Inc. Reports Second Quarter 2025 Results
'We are pleased with our financial performance through the second quarter and first half of 2025,' said President and Chief Executive Officer, Cindy Kitner. 'We delivered revenue growth and continued net interest margin improvement. We are encouraged by the steady, organic growth in our loan portfolio, which was driven by increases in residential and commercial real estate loan originations. Asset quality remained strong with nonperforming loans representing just 0.15% of total loans, which reflects our commitment to prudent underwriting and sound credit management practices. Our team focused on deposit initiatives to expand core banking relationships, which contributed to a positive shift in our deposit mix. Since year-end, noninterest bearing deposits increased $15 million and represent 26% of total deposits compared to 24% at year-end. As we enter the second half of the year, we remain focused on building momentum through deepening customer relationships and continued community investment, and we are confident that our disciplined approach to risk management positions us well to navigate economic uncertainties.'
Income Statement Highlights
Net interest income totaled $3.8 million for the second quarter of 2025, an increase of $570 thousand, or 17.5%, compared to $3.3 million for the same period in 2024. Total interest income was $6.5 million, representing an increase of $470 thousand, or 7.8%, from $6.0 million for the second quarter of 2024. This change was primarily due to an increase of $511 thousand in interest income on loans, offset in part by a decline in interest income on investment securities of $60 thousand.
For the second quarter of 2025, total interest expense was $2.6 million, representing a decline of $100 thousand, or 3.7%, from $2.7 million for the second quarter of 2024. This change was primarily due to a decline in interest expense on borrowings of $344 thousand, offset in part by an increase in interest expense on interest-bearing deposits of $244 thousand.
Noninterest income for the second quarter of 2025 totaled $604 thousand, compared to $582 thousand for the second quarter of 2024. Noninterest expense for the second quarter of 2025 and 2024 was $3.1 million and $2.8 million, respectively. The increase of $319 thousand in noninterest expense was primarily related to an increase in expenses for salaries and employee benefits, professional services and data processing.
For the six months ended June 30, 2025, net interest income totaled $7.4 million, representing an increase of $925 thousand, or 14.4%, when compared to $6.4 million for the same period in 2024. Total interest income was $12.7 million, representing an increase of $1.2 million, or 10.5%, from $11.5 million for the six months ended June 30, 2024. Interest income on loans increased $1.1 million, primarily due to higher average loan balances and portfolio yields. Interest income on interest-earning deposits at correspondent banks increased $262 thousand, which was attributed to higher average cash balances. These positive changes to interest income were in part offset by a decline in interest income on investment securities of $143 thousand.
Total interest expense was $5.3 million for the first six months ended June 30, 2025, representing an increase of $281 thousand, or 5.6%, when compared to $5.0 million for the same period in 2024. This change was attributed to an increase of $1.1 million in interest expense on interesting-bearing deposits, offset in part by a decline in interest expense on borrowings of $858 thousand.
Net interest margin (NIM) improved to 2.85% for the six months ended June 30, 2025, an increase of 23 basis points when compared to 2.62% for the six months ended June 30, 2024. The primary factors included higher yields on earning assets and stable cost of funds.
Noninterest income totaled $1.2 million for the first six months ended June 30, 2025 and 2024. Noninterest expense totaled $6.3 million and $5.6 million for the first six months ended June 30, 2025 and 2024, respectively. The increase of $640 thousand in noninterest expense was primarily related to an increase in expenses for salaries and employee benefits, professional services and data processing.
Balance Sheet Highlights
Total assets were $551.7 million at June 30, 2025, an increase of $14.8 million, or 2.8%, from $536.9 million at December 31, 2024. Year-over-year total assets increased $9.6 million, or 1.8%, from $542.1 million at June 30, 2024.
Cash and cash equivalents increased $1.7 million, or 6.3% to $28.6 million at June 30, 2025 from $26.9 million at December 31, 2024. The increase in cash and cash equivalents was the result of an increase in funding from deposits. Year-over-year cash and cash equivalents decreased slightly by $287 thousand from $28.9 million at June 30, 2024.
Loans, net of the allowance for credit losses on loans, reached a record level of $391.2 million at June 30, 2025, an increase of $13.0 million, or 3.4%, from $378.2 million at December 31, 2024. 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 $17.2 million, or 4.6%, from $374.0 million at June 30, 2024.
Investment securities, excluding restricted securities, were $107.1 million, an increase of $115 thousand, from $107.0 million at December 31, 2024. Changes in the investment portfolio included the purchase of an available for sale mortgage-backed security totaling $2.0 million, a decline in unrealized losses on available for sale securities totaling $1.8 million and amortization of unrealized holding losses on held to maturity securities of $329 thousand. These changes were offset in part by maturities and principal paydowns totaling $3.8 million. Year-over-year investment securities, excluding restricted securities, decreased $7.2 million, or 6.3%, from $114.3 million at June 30, 2024.
Deposits totaled $502.9 million at June 30, 2025, an increase of $8.2 million, or 1.7%, from $494.7 million at December 31, 2024. Noninterest bearing deposits represent 26.5% of total deposits at June 30, 2025, which increased from 23.9% at December 31, 2024. Year-over-year total deposits increased $34.3 million, or 7.3%, from $468.6 million at June 30, 2024. The Company continued to leverage brokered deposits which totaled $25.1 million at June 30, 2025, representing no change from December 31, 2024 and June 30, 2024.
Borrowings totaled $11.5 million at June 30, 2025, an increase of $3.6 million since December 31, 2024 and a decrease of $31.8 million from June 30, 2024. 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 $291.2 million at June 30, 2025.
As of June 30, 2025 stockholders' equity was $33.0 million, representing an increase of $3.0 million from $30.0 million at December 31, 2024. As of June 30, 2025, book value per share improved to $128.19 from $116.68 per share at December 31, 2024. Year-over-year stockholders' equity increased $7.1 million, or 27.5%, from $25.9 million at June 30, 2024.
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 7.89% at June 30, 2025 from 7.62% at December 31, 2024 and 7.31% at June 30, 2024. The ratios of Common Equity Tier 1 capital and Tier 1 capital to risk weighted assets were 12.63%, 12.66% and 12.02% at June 30, 2025, December 31, 2024 and June 30, 2024, respectively. The total risk-based capital ratio was 13.88%, 13.91% and 13.27% at June 30, 2025, December 31, 2024 and June 30, 2024 respectively. Management maintains regular monitoring of capital planning strategies to support and maintain adequate capital levels.
Provision for Credit Losses and Asset Quality
The provision for credit losses totaled $75 thousand for the second quarter of 2025 compared to $60 thousand for the second quarter of 2024. The current quarter provision for credit losses was comprised of provisions for loan losses totaling $75 thousand and no provisions for off-balance sheet credit exposures.
For the six months ended June 30, 2025, the provision for credit losses totaled $150 thousand compared to $180 thousand for the same period in 2024. The provision for credit losses for the first six months of 2025 included a provision for loan losses of $117 thousand and a provision for off-balance sheet credit exposures of $33 thousand.
The credit quality of the loan portfolio remained strong with nonaccrual loans totaling $41 thousand, or 0.01% of total loans, at June 30, 2025, compared to $47 thousand at December 31, 2024 and $48 thousand at June 30, 2024. Total past due loans increased to $560 thousand, or 0.14% of total loans, at June 30, 2025, compared to $134 thousand, or 0.03%, of total loans, at December 31, 2024, and decreased when compared to $833 thousand, or 0.22% of total loans, at June 30, 2024. Loans past due 90 days and still accruing interest totaled $15 thousand at June 30, 2025, compared to none reported at December 31, 2024 and June 30, 2024.
Net charge offs totaled $11 thousand for the second quarter of 2025 and $81 thousand through the first six months of 2025, compared to net recoveries of $237 thousand for the year ended December 31, 2024 and no net charge offs or recoveries through the second quarter and first half of 2024.
The allowance for credit losses for loans totaled $4.1 million, or 1.05% of total loans, at June 30, 2025, compared to $4.1 million, or 1.07%, at December 31, 2024 and $4.0 million, or 1.07%, as of June 30, 2024.
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.
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