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

SHEPHERDSTOWN, W. Va. -- 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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