Shepherdstown, West Virginia – Jefferson Security Bank (OTC Pink: JFWV) reported net income of $1.0 million for the quarter ended June 30, 2021, representing an increase of $304 thousand, or 43.4% when compared to net income of $701 thousand for the quarter ended June 30, 2020. Diluted earnings per share was $3.65 for the second quarter of 2021, compared to $2.51 for the second quarter of 2020. Net income for the six months ended June 30, 2021 totaled $1.8 million, representing an increase of $466 thousand or 35.3%, compared to $1.3 million for the same period in 2020. Diluted earnings per share was $6.45 and $4.73 for the first six months of 2021 and 2020, respectively. Annualized return on average assets and average equity for June 30, 2021 increased to 0.90% and 11.64%, respectively, compared to 0.79% and 9.14%, respectively, for June 30, 2020.
“We are pleased to report strong second quarter results, with solid growth in revenue, continued deposit and loan growth, strong asset quality and well-managed operating expenses,” said President and Chief Executive Officer, Cindy Kitner. “Our second quarter results were positively impacted by the recognition of Paycheck Protection Program (PPP) related fees and lower expenses related to deposit interest and provision for loan losses. Additionally, our team delivered solid performance throughout the second quarter, contributing to the execution of our strategic plan and meeting the needs of our customers and communities.”
As of June 30, 2021, total assets increased $64.0 million, or 18.3%, to $414.3 million compared to total assets of $350.3 million as of June 30, 2020. Loans, net of the allowance for loan losses, increased $20.2 million to $249.3 million as of June 30, 2021, compared to $229.1 million as of June 30, 2020. As of June 30, 2021, loan growth excluding PPP loans was $18.1 million when compared to June 30, 2020. Deposits totaled $379.3 million at June 30, 2021, representing an increase of $63.4 million or 20.1%, when compared to $315.9 million at June 30, 2020. Since December 31, 2020, total assets increased $33.6 million; loans, net of the allowance for loans losses, increased $9.5 million; excluding PPP loans, loan growth was $6.7 million and total deposits increased $32.9 million. As of June 30, 2021, book value per share improved to $114.04 per share compared to $111.02 per share at December 31, 2020 and $106.79 per share at June 30, 2020.
As of June 30, 2021, the increase in total assets was primarily driven by significant deposit growth from government stimulus and customers maintaining improved liquidity positions. This deposit trend funded marginal growth in the loan portfolio and contributed to the purchase of $43.8 million in investment securities through the first six months of 2021. The change in total assets has resulted in a reduction in the Bank’s Tier 1 Capital ratio to 8.34% at June 30, 2021, compared to 8.68% at December 31, 2020 and 9.21% at June 30, 2020.
“Through our strategic planning efforts, we are actively managing our capital with the goal of positioning the Bank to generate long-term, sustainable growth over time, to continue our momentum and generate value for our shareholders, customers and communities,” said President and Chief Executive Officer, Cindy Kitner.
The allowance for loan losses as of June 30, 2021 was $2.8 million, or 1.12% of total loans compared to $2.8 million, or 1.15% as of December 31, 2020 and $2.3 million, or 1.01% as of June 30, 2020. Excluding PPP loans, which are fully government guaranteed, the allowance for loan losses was 1.20%, 1.22% and 1.09% of total loans as of June, 30, 2021, December 31, 2020 and June 30, 2020, respectively. For the first six months of 2021, the provision for loan losses totaled $80 thousand compared to $325 thousand for the same period in 2020 primarily resulting from stable credit trends and improved local economic conditions when compared to the uncertainty of the onset of the pandemic in 2020. Asset quality metrics have improved with noncurrent loans to total loans declining to 1.05% as of June 30, 2021, compared to 1.31% as of December 31, 2020 and 1.61% as of June 30, 2020. As of June 30, 2021, noncurrent loans totaled $2.7 million, with one borrower relationship having total loans outstanding of $2.4 million or 0.93% of total loans. This relationship is monitored on a continuous basis.
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.