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JD Bancshares, Inc. Reports Increase in Q3 2022 Operating Earnings

JENNINGS, LA / ACCESSWIRE / October 20, 2022 / JD Bancshares, Inc. (the "Company"), (OTCQX:JDVB), the parent holding company of JD Bank (the "Bank"), reports its unaudited financial results for the three and nine-month periods ended September 30, 2022.

Net income is $3,388,452 or $0.99 per share for the three-month period ended September 30, 2022 compared to $3,137,156 or $0.92 per share for the linked quarter ended June 30, 2022 and $3,539,845 or $1.03 per common share for the three-month period ended September 30, 2021. Pre-tax, pre-provision operating income for the current quarter is $4,261,659, reflecting a 26% increase compared to $3,373,737 for the linked quarter, and a 30% increase compared to $3,275,808 for the prior year quarter. Pre-tax, pre-provision operating income excludes taxes, provision for loan losses, gains or losses on the sale of other real estate owned, gains on the sale of investment securities, recognized origination fees earned from the Paycheck Protection Program (PPP) and other non-operating revenues and expenses. The increase in current quarter pre-tax, pre-provision operating income is primarily due to an increase in interest income on loans and investment securities.

For the nine-month period ended September 30, 2022, net income is $8,672,339 or $2.54 per share compared to $8,059,912 or $2.35 per share for the prior year comparative period. Pre-tax, pre-provision operating earnings for the current nine-month period is $9,975,321 reflecting a 25% increase over $7,971,657 for the prior year period.

Bruce W. Elder, President & CEO commented, "We are pleased to report strong operating earnings for both the quarter and year-to-date ended September 30, 2022. And while these results are attributable to our efforts, in part, to reposition our balance sheet from cash into higher yielding loans and investment securities, the Federal Reserve Bank's efforts to control inflation by raising short-term interest rates has also played a role. When the Federal Reserve makes changes to monetary policy, it typically takes twelve to eighteen months for those actions to achieve the desired effects. However, the magnitude and speed with which interest rate have been increased will more than likely result in a recession creating potential head winds in housing and employment. We will continue to pay close attention to signs that the economy is weakening and make prudent decisions to ensure we maintain a sound capital position."

Paycheck Protection Program Lending

During 2020 and 2021, the Company made 1,422 PPP loans totaling $110.4 million. As of September 30, 2022, there are two loans totaling $1.3 million that remain outstanding and $109.1 million have been repaid through SBA forgiveness and customer payments. The two remaining PPP borrowers have received partial forgiveness from the SBA and are in the process of appeal and/or are making payments on the loans. The Company continues to have the full guarantee of the SBA for the remaining PPP loans.

The Company received origination fees from the SBA for participating in the program. At origination, we recognized as interest income that portion of the fee estimated to be our internal cost of origination. The remainder is amortized over the contractual life of the loan. If the loan is forgiven or repaid early, the remaining unamortized portion is recognized as interest income in the month of repayment. Amounts recognized as interest income for the quarters ended September 30, 2022, June 30, 20221 and September 30, 2021 are $32,000, $367,000 and $799,000, respectively. Origination fees recognized for the two nine-month periods ended September 30, 20221 and 2021 are $605,000 and $2,185,000, respectively. These fee recognitions have been excluded from pre-tax, pre-provision operating income calculations.

Asset Quality

Loans past due 30 to 89 days as of September 30, 2022 total $2.0 million or 0.30% of total gross loans compared to $1.3 million or 0.21% at December 31, 2021. Past due loans remain at a manageable level at September 30, 2022, but inflation and the actions of the Federal Reserve Open Market Committee (FOMC) to combat inflation are anticipated to have a recessionary impact on both the national and local economy. Management is paying close attention to determine whether any adverse trends might develop in the near term.

Total nonperforming assets, including loans on non-accrual status, other real estate owned (OREO) and repossessed assets are $4.4 million at September 30, 2022 compared to $5.2 million at December 31, 2021. As of September 30, 2022 and December 31, 2021, loans in non-accrual status are $3.5 million and $4.1 million, respectively; OREO is $903,000 compared to $1,054,000 and repossessed assets are $37,000 compared to $0 at the prior year end. Management performs a quarterly evaluation of OREO properties and believes their adjusted carrying values are representative of their fair market values, although there is no assurance that the ultimate sales will be equal or greater than the carrying values.

The Bank recorded a $189,000 provision for credit losses in the current quarter compared to no provisions for the linked and prior year quarters. The allowance for loan losses (ALLL) is $8.7 million at September 30, 2022 or 1.30% of total loans compared to $8.6 million at December 31, 2021 or 1.36% of total loans. Net recoveries are $353,000 for the first nine months of 2022 compared to net charge-offs of $538,000 for the prior year comparative period. During a review of loan system parameters, it was noted that payments collected and applied to loans charged-off in prior periods were not properly accounted for as recoveries. This issue was corrected in Q2 2022 resulting in an addition to the ALLL of approximately $488,000. Had this correction not occurred, net charge-offs for the current year period would have been $135,000. While we believe the current level of our ALLL is adequate, there is no assurance that regulators, increased risks in the loan portfolio, or changes in economic conditions will not require additional adjustments to the ALLL.

Net Interest Income

Net interest income for the current quarter is $10.5 million, reflecting an increase of $644,000 compared to $9.9 million for the linked quarter and an increase of $1.1 million compared to $9.5 million reported for the prior year quarter ended September 30, 2021. The net interest margin for the September 2022 quarter was 3.49% and improved by 22 basis points from 3.27% for the linked quarter and by 47 basis points compared to 3.02% for the prior year period. The yield on earning assets for the current quarter was 3.81% compared to 3.58% and 3.37% for the two comparative periods, respectively. The cost of funds is 0.32% for current period compared to 0.31% for Q2 2022 and 0.35% for Q3 2021.

For the nine-month period ended September 30, 2022, net interest income is $29.2 million or $2.4 million higher than the $26.8 million for the comparative period ended September 30, 2021. Net interest margin increased during the current nine-month period to 3.22% from 2.91% for the prior year comparative period. The yield on earning assets for the current year is 3.54% compared to 3.28% for the prior year nine-month period and the cost of funds is 0.32% compared to 0.37%.

During the Q2 2022, the Company became aware of a loan system setting which affected the accounting for loan payments collected in prior years and applied to loans previously charged-off and in non-accrual status. The setting adjustment resulted in the recognition of $291,000 in interest income. As a result, both the three-month period ended June 30, 2022 and the nine-month period ended September 30, 2022 include $291,000 of non-recurring interest income.

Net margin has been positively impacted by strong loan and investment securities growth, a rising interest rate environment and our ability to control our cost of funds. The Company has experienced strong loan growth over the last nine months despite experiencing significant reductions in PPP loans. Pay downs on PPP loans over the past nine months have totaled $14.9 million. During that time, the loan portfolio has grown by $47.8 million. Therefore, we have experienced a net increase of $62.7 million in new current market rate loans over the first nine months of the year for an annualized percentage increase of 13%. The loan to deposit ratio has increased to 58.16% at September 30, 2022 from 51.82% at December 31, 2021. Although significantly impacted by the unrealized loss on available for sale securities, the amortized book value of the portfolio has increased by $38.9 million over the first nine months of 2022.

The FOMC began raising short-term interest rates on March 17, 2022 with a 25 basis points increase which moved the Wall Street Journal (WSJ) Prime Rate from 3.25% to 3.50%. There have been four additional rate hikes, the last of which occurred on September 21, 2022, which has pushed the WSJ Prime to 6.25%. The FOMC has signaled that they plan to aggressively continue to push rates higher in order to curb inflation. Inflation is currently at 8.2% and is at the highest level in 40 years. Many economists believe we will see another 125 basis points in rate hikes prior to the end of the year. This may move the WSJ Prime to a level of 7.50%. We believe that a recession in 2023 is very likely and could have an impact on both future loan demand as well as asset quality.

Finally, we have been able to control our cost of funds through these interest rate increases. But pressure is mounting and we would anticipate needing to increase interest rates on various deposit products. This will eventually result in an increase in the Company's overall cost of funds.

Non-Interest Income

Total non-interest income is $3.0 million for the three-month period ended September 30, 2022 compared to $3.1 million for the linked quarter and $3.8 million for the prior year quarter. Service charges and fees associated with deposit accounts are $2.4 million for the current quarter, up from $2.3 million at both June 30, 2022 and September 30, 2021. The largest component of service charges and fees is interchange income on debit card transactions. Interchange revenue is $1.2 million for the current quarter and $1.3 million for both the linked and prior year quarters. Revenue from NSF fees is $870,000 in the current quarter compared to $756,000 in the linked quarter and $665,000 in the prior year quarter.

The rise in interest rates on home mortgages during 2022 has had a detrimental impact on new mortgage loan originations. Gains on the sale of originated mortgages is $222,000 for the current quarter compared to $280,000 for Q2 2022 and $430,000 for Q3 2021. We anticipate that mortgage originations, and thus our gains on the sale of loans, to remain at or below current levels into the foreseeable future. Other non-interest income is $424,000 for the current quarter compared to $463,000 for the quarter ended June 30, 2022 and $1.1 million for the prior year quarter. Revenues from trust and brokerage activities comprise the largest components of other non-interest income. While trust revenue has remained relatively stable over the three periods, brokerage revenue has declined to $71,000 for the current quarter from $84,000 for the linked quarter and $208,000 for the prior year quarter. The September 30, 2021 quarter included a gain on a real estate swap of $364,000.

Non-interest income for the nine-month period ended September 30, 2022 is $8.8 million, compared to $9.6 million for the prior year period. Service charges and fees are currently $6.9 million compared to $6.4 million, gains on sale of originated mortgage loans is $741,000 compared to $1.3 million and other non-interest income is $1.1 million compared to $1.9 million. Recognized market fluctuations for an equity investment had a negative impact on both nine-month periods with a $286,000 loss recorded in the current period versus an $80,000 loss recorded in the prior year period. The nine-month period ended September 30, 2021 included two non-operating items; $7,000 in gains on the sale of investment securities and the aforementioned $364,000 gain on a real estate swap.

Non-Interest Expense

Total non-interest expense is $9.3 million for the September 30, 2022 quarter compared to $9.2 million for the linked quarter and $9.0 million for the prior year quarter. Salary and benefits expense is the largest component of non-interest expenses and is $4.7 million for the current and linked period and $4.5 million for the prior year period. We anticipate personnel related expenses to increase in future periods as we look to add bankers to our team and execute our expansion plans in Baton Rouge and Mandeville, LA.

Occupancy expense is $1.3 million for the current quarter compared to $1.2 million for the linked quarter and $1.4 million for the prior year quarter. Two components of occupancy expense that have increased over both the linked and prior year quarters are utilities and lease expense. Energy prices have been impacted by inflation and we have leased additional space in Lafayette, Baton Rouge and Mandeville, LA. Data processing expense is relatively consistent at $1.0 million for the current quarter, $1.1 million in the linked quarter and $1.0 million for the prior year. Marketing, business development and public relations expenses total $387,000 in the current quarter compared to $390,000 for the June 2022 quarter and $269,000 for the prior year quarter. Other non-interest expenses were $1.8 million for Q3 2022, $1.7 million for Q2 2022 and $1.8 million for Q3 2021. Included in total other non-interest expenses are net losses on the sale of OREO of $41,000 for the current quarter and net gains on the sale of OREO of $29,000 for the prior year quarter. We also incurred a $200,000 pre-payment penalty on the repayment of a Federal Home Loan Bank advance during Q3 2021.

Non-interest expenses for the nine-month period ended September 30, 2022 are $27.5 million, reflecting a $1.0 million increase compared to $26.5 million for the prior year. Increases in salaries and employee benefits, data processing, advertising and public relations, other fraud losses and professional fees are partially offset by a decline in FDIC insurance expense. Losses on the sale of OREO for the current and prior nine-month periods are $42,000 and $378,000, respectively. Additionally, we incurred the pre-payment penalty noted above.

Income tax expense is $675,000 for the current quarter compared to $613,000 for the linked quarter and $728,000 for the September 30, 2021 quarter. The effective tax rate is 16.61% compared to 16.34% for the linked quarter and 17.05% for the prior year quarter. Current year-to-date income tax expense is $1.7 million with an effective rate of 16.27% compared to $1.6 million and 16.21% for the prior year nine-month period.

Balance Sheet

Total assets are $1.2 billion at September 30, 2022 compared to $1.3 billion at December 31, 2021. The $121.2 million decrease represents a 9% decline since December 31, 2021. The decline is due to using cash to fund a decrease in deposits and the repayment of subordinated debt originally issued in 2017. Total assets was also impacted by the impact of rising interest rates on our available for sale investment portfolio.

Total cash decreased by $142.6 million between December 31, 2021 and September 30, 2022. Approximately $48.9 million in cash was used to fund a net decrease in total deposits and in January 2022, we redeemed $17.5 million of subordinated debt. The loan and investment portfolios experienced net new loans and securities of $47.8 million and $38.9 million, respectively. Due to the significant increase in interest rates since late March, the investment portfolio shows a point to point decline of $36.2 million due to a gross unrealized loss of $75.1 million. The unrealized loss on investment securities resulted in a $15.4 million increase in our deferred income tax asset.

As mentioned above, total deposits decreased by $48.9 million or 4% from December 31, 2021. Money market accounts experienced the largest decline at $20.3 million, followed by interest-bearing demand at $14.9 million, time deposits at $13.1 million and savings at $10.6 million. These declines are partially offset by a $10.0 million increase in non-interest bearing demand balances. The increase in interest rates has played a role in the decline in our time deposit portfolio. We pride ourselves on developing long-term relationships and attempt to keep our time deposit rates at or above the peer average, but there are several outlier banks in our markets that offer rates that cause customers to move deposits. Between the period February 28, 2020 and December 31, 2021, our deposits increased by $422.0 million or 54%. The increase was the result of significant government stimulus in the form of direct payments to individuals and PPP loans. Additionally, southwest Louisiana was hit with two major hurricanes in the fall of 2020 and we experienced a large influx of insurance proceeds that we escrowed for borrowers to effectuate repairs. Due to supply chain and labor shortage issues, many of those proceeds are just now being disbursed in 2022.

Other borrowings decreased by approximately $17.4 million since year-end 2021. In January 2022, we redeemed a tranche of subordinated debt that was originally issued in 2017.

Stockholders' equity decreased by $53.8 million to $47.4 million at September 30, 2022 from $101.2 million at December 31, 2021. The decrease is comprised of a change in the accumulated other comprehensive loss of $59.3 million, dividends paid to common shareholders of $2.6 million, the repurchase of stock of $651,000 and is partially offset by year-to-date earnings of $8.7 million. Tangible book value per common share is $12.69 at September 30, 2022 compared to $28.29 at December 31, 2021.

Key Performance Ratios

Return on average assets (ROA) increased to 1.07% for the current quarter compared to 0.97% for the linked quarter and 1.04% for the prior year quarter. Return on average equity (ROE) is 20.61%, 15.67% and 13.91% for the three comparative quarters ended September 2022, June 2022 and September 2021, respectively. ROA and ROE for the nine-month periods ended September 30, 2022 and 2021 are 0.90% and 0.80%, and 14.10% and 11.06%, respectively.

About JD Bancshares, Inc.

JD Bancshares, Inc. is the bank holding company of JD Bank, a state chartered bank headquartered in Jennings, Louisiana. JD Bank has been serving the citizens of south Louisiana since 1947 and offers a variety of personal and commercial lending and deposit products through both physical and digital delivery channels. The Bank also offers both trust and investment services. JD Bank operates through 22 full service branch offices and two Loan Production/Deposit Production offices located along the Interstate 10/12 corridor from Lake Charles to Mandeville, Louisiana. JD Bancshares, Inc. may be accessed on its website at jdbank.com .

JD Bancshares, Inc. (OTCQX: JDVB) trades on the OTCQX Best Market. Companies meet high financial standards, follow best practice corporate governance, demonstrate compliance with U.S. securities laws, and have a professional third-party sponsor introduction. Investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on otcmarkets.com .

Forward-Looking Statements

Statements contained in this release, which are not historical facts, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors which include the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, the effects of competition, and including without limitation to other factors that could cause actual results to differ materially as discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.

JD BANCSHARES, INC. AND SUBSIDIARIES
JENNINGS, LOUISIANA
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

Actual
Sep 2022
Actual
Dec 2021
$ Variance % Variance
Assets
Cash and due from banks
24,551,346 18,552,783 5,998,563 32.3
Interest bearing deposits with banks
27,104,067 175,657,295 (148,553,228 ) (84.6 )
Investment Securities - Taxable
316,963,593 354,300,423 (37,336,830 ) (10.5 )
Investment Securities - Tax-exempt
132,181,663 131,081,611 1,100,052 0.8
Mortgage loans held for sale
861,303 705,950 155,353 22.0
Loans, net of unearned income
670,358,946 622,565,024 47,793,922 7.7
Less: Allowance for loan losses
(8,731,652 ) (8,189,747 ) (541,905 ) 6.6
Premises and equipment, net
20,487,784 23,160,984 (2,673,200 ) (11.5 )
Accrued interest receivable
4,139,334 4,492,037 (352,703 ) (7.9 )
Other real estate
902,657 1,053,698 (151,041 ) (14.3 )
Other assets
46,534,801 33,196,334 13,338,467 40.2
Total Assets
1,235,353,842 1,356,576,392 (121,222,550 ) (8.9 )
Liabilities
Non-Interest Bearing Deposits
429,058,395 419,021,687 10,036,708 2.4
Interest bearing demand deposits
226,170,995 241,045,730 (14,874,735 ) (6.2 )
Savings and Money Market Deposits
394,774,813 425,749,299 (30,974,486 ) (7.3 )
Time Deposits - Retail
102,523,177 115,623,464 (13,100,287 ) (11.3 )
Total Deposits
1,152,527,380 1,201,440,180 (48,912,800 ) (4.1 )
Accrued expenses and other liabilities
5,661,953 6,703,008 (1,041,055 ) (15.5 )
Other Borrowings
29,762,214 47,203,745 (17,441,531 ) (36.9 )
Total Liabilities
1,187,951,547 1,255,346,933 (67,395,386 ) (5.4 )
Equity
Common stock
21,294,125 21,437,875 (143,750 ) (0.7 )
3,407,060 shares outstanding at 9.30.22
3,430,060 shares outstanding at 12.31.21
Capital surplus
10,018,895 10,525,694 (506,799 ) (4.8 )
Retained earnings
74,272,746 68,164,751 6,107,995 9.0
Accumulated other comprehensive income (loss)
(58,077,410 ) 1,271,641 (59,349,051 ) (4,667.1 )
Less: Notes receivable common stock
(106,061 ) (170,502 ) 64,441 (37.8 )
Total Equity
47,402,295 101,229,459 (53,827,164 ) (53.2 )
Total Liabilities & Equity
1,235,353,842 1,356,576,392 (121,222,550 ) (8.9 )

JD BANCSHARES, INC. AND SUBSIDIARIES
JENNINGS, LOUISIANA
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

QTD
Actual
Sep 2022
QTD
Actual
Jun 2022
$ Variance % Variance QTD
Actual
Sep 2021
$ Variance % Variance
Interest Income
Interest on Loans
8,704,143 8,509,661 194,482 2.3 8,541,665 162,478 1.9
Mortgage Loans Held For Sale
10,009 11,180 (1,171 ) (10.5 ) 9,043 966 10.7
Interest on deposits with banks
254,078 172,285 81,793 47.5 70,501 183,577 260.4
Investment Securities - Taxable
1,726,262 1,334,136 392,126 29.4 1,166,788 559,474 47.9
Investment Securities - Tax-exempt
812,774 806,146 6,628 0.8 795,120 17,654 2.2
Total Interest Income
11,507,266 10,833,408 673,858 6.2 10,583,117 924,149 8.7
Interest Expense
Interest bearing demand deposits
215,821 210,783 5,038 2.4 219,322 (3,501 ) (1.6 )
Savings and Money Market Deposits
253,011 197,234 55,777 28.3 225,446 27,565 12.2
Time Deposits - Retail
179,686 210,505 (30,819 ) (14.6 ) 296,849 (117,163 ) (39.5 )
Total Interest Expense on Deposits
648,518 618,522 29,996 4.8 741,617 (93,099 ) (12.6 )
FHLB Advances
- - - - 24,572 (24,572 ) (100.0 )
Interest on other borrowings
314,788 314,787 1 0.0 338,534 (23,746 ) (7.0 )
Total Interest Expense
963,306 933,309 29,997 3.2 1,104,723 (141,417 ) (12.8 )
Net Interest Income
10,543,960 9,900,099 643,861 6.5 9,478,394 1,065,566 11.2
Provision for loan losses
189,000 - 189,000 - - 189,000 -
Net In. Inc. After Prov. for Loan Losses
10,354,960 9,900,099 454,861 4.6 9,478,394 876,566 9.2
Non Interest Income
Service charges and fees
2,354,001 2,322,238 31,763 1.4 2,272,365 81,636 3.6
Mortgage loan and related fees
221,542 280,959 (59,417 ) (21.1 ) 429,548 (208,006 ) (48.4 )
Other noninterest income
423,536 462,603 (39,067 ) (8.4 ) 1,072,424 (648,888 ) (60.5 )
Total Non Interest Income
2,999,079 3,065,800 (66,721 ) (2.2 ) 3,774,337 (775,258 ) (20.5 )
Non Interest Expense
Salaries and employee benefits
4,743,698 4,728,034 15,664 0.3 4,507,170 236,528 5.2
Occupancy
1,343,839 1,236,639 107,200 8.7 1,357,694 (13,855 ) (1.0 )
Advertising and public relations
387,039 389,976 (2,937 ) (0.8 ) 269,098 117,941 43.8
Data Processing
1,039,588 1,126,778 (87,190 ) (7.7 ) 1,046,492 (6,904 ) (0.7 )
Other noninterest expense
1,776,588 1,734,796 41,792 2.4 1,804,638 (28,050 ) (1.6 )
Total Non Interest Expense
9,290,752 9,216,223 74,529 0.8 8,985,092 305,660 3.4
Income Before Taxes
4,063,287 3,749,676 313,611 8.4 4,267,639 (204,352 ) (4.8 )
Income taxes
674,835 612,520 62,315 10.2 727,794 (52,959 ) (7.3 )
Net Income
3,388,452 3,137,156 251,296 8.0 3,539,845 (151,393 ) (4.3 )

Per common share data:
Earnings
$ 0.99 $ 0.92 $ 1.03
Weighted average number of shares outstanding
3,416,740 3,420,677 3,430,060

JD BANCSHARES, INC. AND SUBSIDIARIES
JENNINGS, LOUISIANA
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

YTD
Actual
Sep 2022
YTD
Actual
Sep 2021
$ Variance % Variance
Interest Income
Interest on Loans
24,906,796 24,728,828 177,968 0.7
Mortgage Loans Held For Sale
27,855 28,716 (861 ) (3.0 )
Interest on deposits with banks
508,870 196,738 312,132 158.7
Investment Securities - Taxable
4,307,283 2,891,265 1,416,018 49.0
Investment Securities - Tax-exempt
2,409,936 2,402,010 7,926 0.3
Total Interest Income
32,160,740 30,247,557 1,913,183 6.3
Interest Expense
Interest bearing demand deposits
631,897 695,505 (63,608 ) (9.1 )
Savings and Money Market Deposits
662,718 652,234 10,484 1.6
Time Deposits - Retail
628,196 987,957 (359,761 ) (36.4 )
Total Interest Expense on Deposits
1,922,811 2,335,696 (412,885 ) (17.7 )
FHLB Advances
- 85,263 (85,263 ) (100.0 )
Interest on other borrowings
993,485 1,015,859 (22,374 ) (2.2 )
Total Interest Expense
2,916,296 3,436,818 (520,522 ) (15.1 )
Net Interest Income
29,244,444 26,810,739 2,433,705 9.1
Provision for loan losses
189,000 330,000 (141,000 ) (42.7 )
Net In. Inc. After Prov. for Loan Losses
29,055,444 26,480,739 2,574,705 9.7
Non Interest Income
Service charges and fees
6,900,872 6,421,663 479,209 7.5
Mortgage loan and related fees
741,412 1,264,203 (522,791 ) (41.4 )
Other noninterest income
1,135,589 1,918,434 (782,845 ) (40.8 )
Total Non Interest Income
8,777,873 9,604,300 (826,427 ) (8.6 )
Non Interest Expense
Salaries and employee benefits
14,067,912 13,391,189 676,723 5.1
Occupancy
3,783,808 3,889,778 (105,970 ) (2.7 )
Advertising and public relations
1,119,048 997,174 121,874 12.2
Data Processing
3,317,376 3,159,747 157,629 5.0
Other noninterest expense
5,187,174 5,027,608 159,566 3.2
Total Non Interest Expense
27,475,318 26,465,496 1,009,822 3.8
Income Before Taxes
10,357,999 9,619,543 738,456 7.7
Income taxes
1,685,660 1,559,631 126,029 8.1
Net Income
8,672,339 8,059,912 612,427 7.6

Per common share data:
Earnings $ 2.54 $ 2.35
Weighted average number of shares outstanding
3,416,740 3,430,060

JD BANCSHARES, INC. AND SUBSIDIARIES
Margin Analysis Compare

Average Yield and Rate Average Funds Interest Income/Expense
QTD
Actual
Sep 2022
QTD
Actual
Sep 2021
Change QTD
Actual
Sep 2022
QTD
Actual
Sep 2021
Change QTD
Actual
Sep 2022
QTD
Actual
Sep 2021
Change
Earning Assets
Loans
5.25 4.87 0.38 656,500,196 629,252,122 27,248,074 8,672,115 7,742,463 929,652
PPP fee recognition
0.01 0.52 (0.51 ) - - - 32,028 799,202 (767,174 )
Loans with fees
5.26 5.39 (0.13 ) 656,500,196 629,252,122 27,248,074 8,704,143 8,541,665 162,478
Mortgage loans held for sale
5.93 3.05 2.88 675,460 1,186,987 (511,527 ) 10,009 9,043 965
Deposits with banks
2.27 0.18 2.09 44,337,345 153,548,401 (109,211,056 ) 254,078 70,501 183,577
Investment securities - taxable
1.78 1.30 0.48 388,791,156 360,274,862 28,516,295 1,726,262 1,166,788 559,474
Investment securities - tax-exempt
3.11 3.17 (0.06 ) 132,442,096 126,808,971 5,633,125 812,774 795,120 17,654
Total Earning Assets
3.81 3.37 0.44 1,222,746,253 1,271,071,341 (48,325,089 ) 11,507,266 10,583,117 924,149
Interest bearing liabilities
Interest bearing demand
0.38 0.38 - 223,906,301 227,435,076 (3,528,775 ) 215,821 219,322 (3,502 )
Savings and Money Market
0.25 0.21 0.04 398,283,640 427,513,155 (29,229,515 ) 253,011 225,446 27,564
Time deposits - Retail
0.69 0.97 (0.28 ) 104,048,520 121,862,817 (17,814,297 ) 179,686 296,849 (117,163 )
Total interest bearing deposits
0.35 0.38 (0.03 ) 726,238,461 776,811,048 (50,572,587 ) 648,517 741,618 (93,101 )
Federal home Loan Bank advances
- 4.99 (4.99 ) - 1,925,469 (1,925,469 ) - 24,572 (24,572 )
Other borrowings
4.12 7.46 (3.34 ) 29,886,370 17,750,631 12,135,738 314,788 338,534 (23,745 )
Total borrowed funds
4.12 7.22 (3.10 ) 29,886,370 19,676,100 10,210,270 314,788 363,106 (48,318 )
Total interest-bearing liabilities
0.50 0.55 (0.05 ) 756,124,831 796,487,148 (40,362,317 ) 963,306 1,104,724 (141,418 )
Net interest rate spread
3.31 2.82 0.49 10,543,960 9,478,393 1,065,567
Effect of non-interest bearing deposits
(0.18 ) (0.20 ) 0.02 429,702,344 451,873,451 (22,171,107 )
Cost of funds
0.32 0.35 (0.03 )
Net interest margin
3.49 3.02 0.47

JD BANCSHARES, INC. AND SUBSIDIARIES
Margin Analysis Compare

Average Yield and Rate Average Funds Interest Income/Expense
YTD
Actual
Sep 2022
YTD
Actual
Sep 2021
Change YTD
Actual
Sep 2022
YTD
Actual
Sep 2021
Change YTD
Actual
Sep 2022
YTD
Actual
Sep 2021
Change
Earning Assets
Loans
5.07 4.79 0.28 641,563,408 628,423,932 13,139,476 24,301,299 22,543,348 1,757,951
PPP fee recognition
0.12 0.47 (0.35 ) - - - 605,497 2,185,480 (1,579,983 )
Loans with fees
5.19 5.26 (0.07 ) 641,563,408 628,423,932 13,139,476 24,906,796 24,728,828 177,968
Mortgage loans held for sale
4.64 2.82 1.82 801,199 1,357,863 (556,663 ) 27,855 28,716 (862 )
Deposits with banks
0.82 0.13 0.69 82,701,022 195,637,496 (112,936,474 ) 508,870 196,738 312,132
Investment securities - taxable
1.51 1.25 0.26 380,463,866 307,821,481 72,642,386 4,307,283 2,891,265 1,416,018
Investment securities - tax-exempt
3.08 3.25 (0.17 ) 131,951,669 124,792,398 7,159,271 2,409,936 2,402,010 7,927
Total Earning Assets
3.54 3.28 0.26 1,237,481,165 1,258,033,170 (20,552,005 ) 32,160,740 30,247,557 1,913,183
Interest bearing liabilities
Interest bearing demand
0.36 0.40 (0.04 ) 231,582,607 233,803,049 (2,220,443 ) 631,897 695,505 (63,608 )
Savings and Money Market
0.22 0.22 - 408,669,264 405,065,171 3,604,094 662,718 652,235 10,484
Time deposits - Retail
0.77 1.06 (0.29 ) 109,647,492 124,753,579 (15,106,087 ) 628,196 987,957 (359,761 )
Total interest bearing deposits
0.34 0.41 (0.07 ) 749,899,363 763,621,799 (13,722,437 ) 1,922,812 2,335,696 (412,884 )
Federal home Loan Bank advances
- 4.61 (4.61 ) - 2,440,502 (2,440,502 ) - 85,263 (85,263 )
Other borrowings
4.26 7.54 (3.28 ) 30,762,438 17,761,981 13,000,458 993,485 1,015,859 (22,374 )
Total borrowed funds
4.26 7.19 (2.93 ) 30,762,438 20,202,483 10,559,956 993,485 1,101,122 (107,637 )
Total interest-bearing liabilities
0.50 0.58 (0.08 ) 780,661,801 783,824,282 (3,162,481 ) 2,916,297 3,436,819 (520,522 )
Net interest rate spread
3.04 2.70 0.34 29,244,444 26,810,739 2,433,705
Effect of non-interest bearing deposits
(0.18 ) (0.21 ) 0.04 425,481,542 455,450,677 (29,969,135 )
Cost of funds
0.32 0.37 (0.05 )
Net interest margin
3.22 2.91 0.31

JD BANCSHARES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION

Financial Ratios

For the Qtr
Ended
September 30,
2022
For the Qtr
Ended
June 30,
2022
For the Qtr
Ended
September 30,
2021
For the Nine
Months Ended
September 30,
2022
For the Nine
Months Ended
September 30, 2021
Performance Ratios
Return on Average Assets (ROA)
1.07 % 0.97 % 1.04 % 0.90 % 0.80 %
ROA based on Pre-tax, pre-provision operating income
1.35 % 1.05 % 0.96 % 1.03 % 0.79 %
Return on Average Equity (ROE)
20.61 % 15.67 % 13.91 % 14.10 % 11.06 %
ROE based on Pre-tax, pre-provision operating income
25.92 % 16.85 % 12.88 % 16.22 % 10.94 %
Earnings per Share
$ 0.99 $ 0.92 $ 1.03 $ 2.54 $ 2.35
Net Interest Margin
3.49 % 3.27 % 3.02 % 3.22 % 2.91 %
Efficiency Ratio **
67.22 % 67.78 % 67.21 % 70.22 % 70.57 %
Non-Interest Income as a % of Avg. Assets**
0.95 % 0.95 % 1.00 % 0.91 % 0.96 %
Non-Interest Expense as a % of Avg. Assets**
2.92 % 2.78 % 2.57 % 2.81 % 2.58 %


As of
September 30, 2022
As of
December 31, 2021
Bank Level Capital Ratios:
Tier 1 Leverage Ratio
9.83% (Est.) 9.04 %
Common Equity Tier 1 Ratio
16.04% (Est.) 16.07 %
Tier 1 Risk-Based Capital Ratio
16.04% (Est.) 16.07 %
Total Risk-Based Capital Ratio
17.15% (Est.) 17.17 %
Company:
Tangible Equity / Total Assets
3.50 % 7.15 %
Tangible Book Value per Share
$ 12.69 $ 28.29

Reconcilement of GAAP to Pre-tax, Pre-Provision Operating Income:




For the Qtr
Ended
September 30,
2022
For the Qtr
Ended
June 30,
2022
For the Qtr
Ended
September 30,
2021
For the Nine
Months Ended
September 30,
2022
For the Nine Months Ended
September 30, 2021
Net Income (GAAP)
$ 3,388,452 $ 3,137,156 $ 3,539,845 $ 8,672,339 $ 8,059,912
Provision for Loan Lossess
189,000 - - 189,000 330,000
Net (Gain) Loss on OREO
41,400 (418 ) (28,535 ) 41,985 378,370
Net (Gain) Loss on Securities
- - - - (6,682 )
Non-recurring Revenue
- (291,127 ) (363,750 ) (291,127 ) (363,750 )
Non-recurring Expenses
- 282,961 199,656 282,961 199,656
Nonrecurring Revenue - PPP origination fees
(32,028 ) (367,355 ) (799,202 ) (605,497 ) (2,185,480 )
Income Tax Expense
674,835 612,520 727,794 1,685,660 1,559,631
Pre-tax, Pre-Provision Operating Income
$ 4,261,659 $ 3,373,737 $ 3,275,808 $ 9,975,321 $ 7,971,657
** Non-recurring items are eliminated for this ratio

Contact:

Bruce Elder (CEO) 337-246-5399
Paul Brummett (CFO) 337-246-5395
Website: www.jdbank.com

SOURCE: JD Bancshares, Inc.



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