Jefferson Security Bank Announces Record Earnings for the Third Quarter and First Nine Months of 2006

  
    
  
  
    
      Jefferson Security Bank (OTCBB:JFWV) reported net income of $602,227 for 
      the third quarter ended September 30, 2006, an increase of 4.0% or 
      $22,990 over the net income for the corresponding quarter ended 
      September 30, 2005 of $579,237. Earnings per share were $2.01, an 
      increase of 4.1% from the $1.93 for the third quarter of 2005.
    
    
      Net income for the nine months ended September 30, 2006 was $1,915,338, 
      or $6.38 per share, which is an increase of $204,245, 11.9%, over the 
      net income of $1,711,093, or $5.70 per share, for the nine months ended 
      September 30, 2005. The return on assets as of September 30, 2006 was 
      1.10%, and the return on equity was 14.92%. In comparison, through the 
      third quarter of 2005 the bank generated a return on assets and equity 
      of 1.04% and 14.64% respectively.
    
    
      Commenting on the results, K. Stephen Morris, President and CEO, said, “Our 
      results for the quarter and nine months ended September 30 were impacted 
      by costs associated with delays in opening our two new offices in 
      Shepherdstown, West Virginia, and Sharpsburg, Maryland. Zoning approval 
      delays led to contractor delays which led to delays in opening the 
      offices. We had set opening dates, purchased equipment, and hired and 
      trained staff as it is necessary to have fully operational staff for 
      each location when the branches open. The staffing and equipment costs 
      were incurred in anticipation of generating loans and income. 
      Unfortunately, both offices opened later than originally planned. 
      Accordingly, the bank had greater expenses and lower income in these 
      periods than was anticipated. The good news is that the two new branches 
      are now open and performing well. The Sharpsburg branch has been 
      especially well received by the community as there had not been a bank 
      in Sharpsburg since October 2004. These new offices should perform very 
      well in 2007. We are also pleased that the net interest margin continues 
      to increase both as a percentage and in actual earnings.”
    
    
      Total assets for the bank as of September 30, 2006 were $232.3 million, 
      which is an increase of $1.9 million or 0.8% from total assets as of 
      September 30, 2005 of $230.4 million. Loans, net of reserve, as of 
      September 30, 2006 were $161.3 million, which is an increase of $17.1 
      million or 11.9% from loans, net of reserve, as of September 30, 2005 of 
      $144.2 million. Deposits as of September 30, 2006 were $212.1 million, 
      which is a decrease of $0.8 million or 0.4% from deposits as of 
      September 30, 2005 of $212.9 million. Book value per share as of 
      September 30, 2006 was $59.23, which is an increase of $5.15 or 9.5% 
      from book value per share of $54.08 as of September 30, 2005.
    
    
      Jefferson Security Bank, founded in 1869, is a community bank engaged in 
      the general banking business in Berkeley County and Jefferson County, 
      West Virginia. 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 company 
      has made with the Securities and Exchange Commission for additional 
      information.
    
    
      
        
          Branch Offices:
        
      
      
        
           
        
      
      
        
          7994 Martinsburg Pike, Shepherdstown, WV (304-876-2800)
        
      
      
        
          
            700 East Washington Street at Jefferson Avenue, Charles Town, WV
          
          
            (304-725-9752)
          
        
      
      
        
          277 Mineral Drive, Inwood, WV (304-229-6000)
        
      
      
        
          1861 Edwin Miller Boulevard, Martinsburg, WV (304-264-0900)
        
      
      
        
          103 West Main Street, Sharpsburg, MD (301-432-3900)
        
      
    
  
Jefferson Security Bank (OTCBB:JFWV) reported net income of
$602,227 for the third quarter ended September 30, 2006, an increase
of 4.0% or $22,990 over the net income for the corresponding quarter
ended September 30, 2005 of $579,237. Earnings per share were $2.01,
an increase of 4.1% from the $1.93 for the third quarter of 2005.

   Net income for the nine months ended September 30, 2006 was
$1,915,338, or $6.38 per share, which is an increase of $204,245,
11.9%, over the net income of $1,711,093, or $5.70 per share, for the
nine months ended September 30, 2005. The return on assets as of
September 30, 2006 was 1.10%, and the return on equity was 14.92%. In
comparison, through the third quarter of 2005 the bank generated a
return on assets and equity of 1.04% and 14.64% respectively.

   Commenting on the results, K. Stephen Morris, President and CEO,
said, "Our results for the quarter and nine months ended September 30
were impacted by costs associated with delays in opening our two new
offices in Shepherdstown, West Virginia, and Sharpsburg, Maryland.
Zoning approval delays led to contractor delays which led to delays in
opening the offices. We had set opening dates, purchased equipment,
and hired and trained staff as it is necessary to have fully
operational staff for each location when the branches open. The
staffing and equipment costs were incurred in anticipation of
generating loans and income. Unfortunately, both offices opened later
than originally planned. Accordingly, the bank had greater expenses
and lower income in these periods than was anticipated. The good news
is that the two new branches are now open and performing well. The
Sharpsburg branch has been especially well received by the community
as there had not been a bank in Sharpsburg since October 2004. These
new offices should perform very well in 2007. We are also pleased that
the net interest margin continues to increase both as a percentage and
in actual earnings."

   Total assets for the bank as of September 30, 2006 were $232.3
million, which is an increase of $1.9 million or 0.8% from total
assets as of September 30, 2005 of $230.4 million. Loans, net of
reserve, as of September 30, 2006 were $161.3 million, which is an
increase of $17.1 million or 11.9% from loans, net of reserve, as of
September 30, 2005 of $144.2 million. Deposits as of September 30,
2006 were $212.1 million, which is a decrease of $0.8 million or 0.4%
from deposits as of September 30, 2005 of $212.9 million. Book value
per share as of September 30, 2006 was $59.23, which is an increase of
$5.15 or 9.5% from book value per share of $54.08 as of September 30,
2005.

   Jefferson Security Bank, founded in 1869, is a community bank
engaged in the general banking business in Berkeley County and
Jefferson County, West Virginia. 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 company has made with the Securities and Exchange
Commission for additional information.

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Branch Offices:

       7994 Martinsburg Pike, Shepherdstown, WV (304-876-2800)
   700 East Washington Street at Jefferson Avenue, Charles Town, WV
                            (304-725-9752)
             277 Mineral Drive, Inwood, WV (304-229-6000)
     1861 Edwin Miller Boulevard, Martinsburg, WV (304-264-0900)
         103 West Main Street, Sharpsburg, MD (301-432-3900)
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