JFWV JSB Financial Inc (PK)

Jefferson Security Bank (OTCBB: JFWV) reported net income of $1,099,453, or $3.67 per share, for the nine months ended September 30, 2008, which is a decrease of $657,038, 37.4%, from net income of $1,756,491, or $5.85 per share, for the nine months ended September 30, 2007. For the third quarter ended September 30, 2008, the Bank incurred a net loss of $64,008 compared to net income for the third quarter ended September 30, 2007 of $520,784. This decrease was the primary result of management�s decision to strengthen the allowance for loan losses after completing the quarterly evaluation. The loan loss provision during the quarter ended September 30, 2008 was $945,000 compared to $18,000 for the quarter ended September 30, 2007. Earnings/(loss) per share was ($0.21) for the third quarter ended September 30, 2008 compared to $1.74 for the quarter ended September 30, 2007. Commenting on the results, K. Stephen Morris, President and CEO, said, �We are operating in unprecedented times. The current economic conditions are impacting our customers and in some cases affecting their ability to pay their debts, which has required management to take a proactive step toward recognizing the potential for loan losses. We know our borrowers well, we understand their problems, and we are committed to working with them through these difficult times. We are not a sub-prime lender, nor is it our practice to lend outside of our identified market areas. �However, having laid out the rationale for the significant loan loss provision, I wish to emphasize that the anticipated losses may not be incurred and that Jefferson Security Bank earned $3.67 per share for the nine months ended September 30, 2008. Moreover, without the increased loan loss provisions for the quarter and nine months ended September 30, 2008 as compared to the same periods in 2007, earnings for both periods would have been comparable. This fact shows the underlying earnings capability of the Bank even in the current very difficult times. �Jefferson Security Bank has an excellent liquidity position in that its ratio of loans, net of reserve, to deposits was 71.5% as of September 30, 2008. This ratio is considerably lower than almost all other members of the bank�s national peer group, and thus exemplifies our ability to meet the cash needs of our borrowers and depositors. Moreover, Jefferson Security Bank maintains capital ratios that exceed �well capitalized� regulatory requirements. Collectively these standards of measurement give management confidence that Jefferson Security Bank will weather the current financial storm as it has others since its founding in 1869. �Book value per share was $64.30 as of September 30, 2008. Through the nine months ended September 30, 2008, Jefferson Security Bank repurchased 4,693 common shares, which shows that the Board of Directors is confident in the long-term strength of Jefferson Security Bank and is focused on increasing shareholder value.� Total assets for the Bank as of September 30, 2008 were $239.2 million, which is a decrease of $9.7 million or 3.9% from total assets as of September 30, 2007 of $248.9 million. Loans, net of reserve, as of September 30, 2008 were $150.6 million, which is a decrease of $13.5 million or 8.2% from loans, net of reserve, as of September 30, 2007 of $164.1 million. Deposits as of September 30, 2008 were $210.8 million, which is a decrease of $17.6 million or 7.7% from deposits as of September 30, 2007 of $228.4 million. As of September 30, 2008, book value per share was $64.30, which is an increase of $2.03 or 3.3% from book value per share of $62.27 as of September 30, 2007. Jefferson Security Bank, founded in 1869, is a community bank engaged in the general banking business in Berkeley County and Jefferson County, West Virginia, and Washington County, Maryland. The Bank currently has six offices. 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. Readers are encouraged to read filings the Bank has made with the Federal Deposit Insurance Corporation for additional information. 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, 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)