JFWV JSB Financial Inc (PK)

Jefferson Security Bank (OTCBB: JFWV) reported net income of $209,039 for the second quarter ended June 30, 2009, as compared to net income for the corresponding quarter ended June 30, 2008 of $529,006. Earnings per share were $0.72 for the quarter ended June 30, 2009, as compared to earnings per share of $1.77 for the second quarter of 2008.

Net income for the six months ended June 30, 2009 was $713,384, or $2.44 per share, as compared to net income of $1,163,461, or $3.88 per share, for the six months ended June 30, 2008. The annualized return on average assets was 0.60%, and the annualized return on average equity was 7.56% for the six months ended June 30, 2009. In comparison, the six months ended June 30, 2008 generated an annualized return on average assets and average equity of 0.95% and 11.55%, respectively.

Based on these results, the Board of Directors declared a semiannual dividend in the amount of $1.00 per share, payable July 15, 2009 to shareholders of record on June 30, 2009. This dividend represents a reduction of $0.25 from the $1.25 per share dividend paid in January 2009.

Commenting on the results, K. Stephen Morris, President and CEO, said: �The current recession is far more severe than anticipated in the global economy, U.S. economy and in our market. There is great uncertainty as to when the downturn will abate and our conservative and cautious approach is leading us to prepare for an extended decline. As a bank, we are focused on maintaining strong liquidity and capital. Our results of operations have been affected by reduced loan demand, a higher provision for loan losses and a modest contraction in the net interest margin which has been affected by a modest rise in nonperforming loans. These factors are expected during these severe economic conditions. We accept responsibility for our performance in regard to issues that we can manage. However, we have also been impacted by the power of government regulators to implement directives that have a significant financial impact on Jefferson Security Bank. The FDIC has increased regular assessments and implemented a special assessment during the second quarter of 2009. Our expense relating to FDIC assessments for the first six months of 2009 increased approximately $250,000 compared to the first six months of 2008. The uncertainty as to future levels of FDIC assessments and their potential impact on the results of operations, liquidity and capital of Jefferson Security Bank has resulted in an increase in the cautiousness and conservatism of the Board of Directors. As a result, for all of the reasons previously explained, the Board of Directors reduced the dividend to $1.00 per share. Moreover, a decision has been made that there will be no additional repurchases of Jefferson Security Bank common stock until the economy strengthens and the results of operations improve.�

Total assets for the Bank as of June 30, 2009 were $239.2 million, which is a decrease of $1.6 million or 0.66% from total assets as of June 30, 2008 of $240.8 million. Loans, net of reserve, as of June 30, 2009 were $147.3 million, which is a decrease of $6.2 million from loans, net of reserve, as of June 30, 2008 of $153.5 million. Deposits as of June 30, 2009 were $208.3 million, which is a decrease of $6.9 million from deposits as of June 30, 2008 of $215.2 million. Book value per share as of June 30, 2009 was $63.90, which is a decrease of $3.78 or 5.59% from book value per share of $67.68 as of June 30, 2008.

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)