JSB Financial Inc. Announces Third Quarter 2025 Results, Highlights Continued Loan Growth and Stable Core Performance
JSB Financial Inc. (OTCID: JFWV), the parent company of Jefferson Security Bank, has reported its financial results for the quarter and nine-month period ended September 30, 2025. While the company experienced lower reported net income compared to the prior year period due to the absence of one-time recoveries recorded in 2024, the underlying performance of its core banking operations showed continued improvement supported by organic loan growth, stable funding, and disciplined credit management.
For the third quarter of 2025, the JSB company reported unaudited net income of $1.1 million, compared to $2.0 million in the same quarter of 2024. Basic and diluted earnings per common share for the quarter were $4.40, compared with $7.64 for the third quarter of 2024. The decline year-over-year is largely attributable to non-recurring recoveries recognized during the third quarter of 2024, including an interest recovery of $1.3 million, a recovery to the allowance for credit losses of $252 thousand, and $17 thousand in recovered legal fees related to previously nonperforming loans.
When excluding these prior-year recovery items, pre-tax income for the third quarter of 2025 increased to $1.4 million, compared with adjusted pre-tax income of $960 thousand in the third quarter of 2024. This represents an improvement of $457 thousand, demonstrating strengthened earnings from ongoing operations.
For the nine months ended September 30, 2025, the company reported net income of $2.8 million, compared to $3.4 million during the same period in 2024. Basic and diluted earnings per share for the nine-month period were $11.05 and $13.33, respectively. On an annualized basis, return on average assets was 0.70% and return on average equity was 11.92% for the nine-month period ended September 30, 2025, compared to 0.87% and 17.65%, respectively, for the nine-month period ended September 30, 2024.
When adjusting for the prior-year non-recurring recoveries, pre-tax income improved year-over-year. Adjusted pre-tax income for the nine months ended September 30, 2024 was $2.7 million, compared with $3.5 million for the nine months ended September 30, 2025, reflecting an increase of $791 thousand and further demonstrating ongoing operating strength.
Management Commentary
“We are proud to deliver JSB another quarter of consistent earnings, driven by organic loan growth and stable core deposits,” said Cindy Kitner, President and Chief Executive Officer. “Credit quality is well managed with JSB metrics including past dues, nonaccruals, charge-offs, and nonperforming loans remaining at historically low levels. This quarter’s results continue to reflect our team’s ability to deliver on our strategic priorities and strengthen customer relationships, both of which reinforce our commitment to creating value for our shareholders.”
Performance and Financial Position
JSB Financial continued to strengthen its balance sheet during the third quarter of 2025. Total assets were $554.8 million as of September 30, 2025, compared to $536.9 million at December 31, 2024, an increase of $17.9 million or 3.3%. Net loans grew by 4.3% during the first nine months of the year, driven by sustained demand for residential real estate lending, contributing to the overall growth in interest-earning assets.
Year-over-year, total assets declined by $22.6 million from September 30, 2024, due primarily to the company’s strategic paydown of borrowings under the Federal Reserve’s Bank Term Funding Program (BTFP). This reduction in borrowings supported an improvement in the company’s interest expense profile and enhanced long-term balance sheet stability.
Total deposits grew to $513.3 million at September 30, 2025, up from $494.7 million at December 31, 2024, representing an increase of $18.6 million or 3.8%. Noninterest-bearing deposits accounted for 24.7% of total deposits, up from 23.9% at year-end 2024, reflecting continued customer loyalty and a stable funding base. Year-over-year, total deposits decreased slightly by 0.3%, reflecting normal fluctuations in customer cash usage amid changing economic conditions.
Borrowings declined significantly, totaling $2.6 million as of September 30, 2025, down from $7.9 million at December 31, 2024 and $28.0 million at September 30, 2024. The reduction in borrowings contributed to lower interest expense and improved capital ratios.
Shareholders’ equity increased to $34.5 million as of September 30, 2025, up from $30.0 million at year-end 2024. Book value per share increased meaningfully to $134.09, compared to $116.68 as of December 31, 2024, supported by retained earnings and reduced unrealized losses on investment securities.
Income Statement and Margin Performance
Net interest income totaled $4.0 million for the third quarter of 2025, a decrease from $4.5 million during the third quarter of 2024; however, when excluding the $1.3 million interest recovery recorded in the prior year, net interest income increased by 22% year-over-year. This improvement was driven primarily by higher average loan balances and stronger yields across the portfolio.
Interest expense declined by 15.4% year-over-year to $2.6 million as the company deliberately reduced higher-cost borrowings and benefited from more favorable deposit pricing conditions.
Noninterest income increased to $634 thousand for the third quarter of 2025, compared to $586 thousand in the same quarter of 2024. Noninterest expense increased modestly by $185 thousand to $3.1 million, JSB primarily due to higher salary, employee benefit costs, and professional services.
Credit Quality and Capital Strength
JSB Financial maintained exceptionally strong asset quality throughout the quarter. Nonaccrual loans totaled just $40 thousand, representing 0.01% of total loans — levels that continue to reflect prudent credit underwriting and conservative risk management practices.
The allowance for credit losses on loans was $4.3 million, or 1.07% of total loans, consistent with the company’s long-term credit reserve strategy. JSB Provision expense for the quarter was $128 thousand, reflecting loan growth rather than deterioration in asset performance.
Capital ratios remained well above regulatory thresholds for well-capitalized institutions, with the Tier 1 leverage ratio increasing to 8.02% and the total risk-based capital ratio at 13.70% as of September 30, 2025.
During JSB the third quarter, the company declared a semi-annual dividend of $1.35 per share, payable September 12, 2025, bringing the annual dividend to $2.60 per share. Total dividends paid during 2025 were $669 thousand.
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