JD Bancshares, Inc. Announces Solid Financial Results for Q2 2022

JENNINGS LA / ACCESSWIRE / July 21, 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 six- month periods ended June 30, 2022.

Net income for the three-month period ended June 30, 2022 is $3,137,156 or $0.92 per common share compared to $2,108,163 or $0.62 per common share for the linked quarter ended March 31, 2022 and $2,593,570 or $0.76 per share for the prior year quarter ended June 30, 2021. Net income for the current period increased by 49% and 21% over the linked and prior year periods, respectively. Pre-tax, pre-provision operating income for the quarter ended June 30, 2022 is $3,373,737, reflecting a 47% increase over the $2,291,078 for the March 31, 2022 quarter and 27% over the $2,650,453 for the quarter ended June 30, 2021. Pre-tax, pre-provision operating income excludes taxes, provision for loan losses, net gains or losses on the sale of other real estate owned ("OREO"), net gains on the sale of investment securities, recognized origination fees earned from the Paycheck Protection Program ("PPP") and other non-recurring items. The increase in current period earnings compared to both the linked and prior year periods is driven primarily by stronger net interest income resulting from transitioning earning assets from lower yielding categories into loans and investment securities.

For the six-month period ended June 30, 2022, net income is up 16% to $5,245,223 or $1.53 per share compared to $4,513,549 or $1.32 per share for the prior year comparative period. Pre-tax, pre-provision operating earnings for the two comparative six-month periods is $5,664,719 and $4,689,331, respectively.

Bruce Elder, President and CEO, commented, "We are very pleased to report our second quarter 2022 financial results. The Company has experienced nice growth in our loan portfolio over the past six and twelve months. While point to point growth in the loan portfolio is $31.2 million for the six-month period since December 31, 2021 and $21.1 million over the twelve-month period since June 30, 2021, when factoring in the PPP paydowns over those periods of $14.2 million and $45.7 million, respectively, actual net growth of non-PPP loans is $45.4 million for the past six months and $66.8 million over the last twelve months. This has driven solid increases in net interest income both on a quarterly and year-to-date basis."

Elder continued by commenting, "Current economic conditions and inflationary pressures could have an impact on loan demand and increase the Company's operating costs. Additionally, we are preparing to embark on an exciting plan to broaden the Bank's presence down the Interstate 10 corridor to Baton Rouge and the Mandeville, Louisiana areas. While those efforts will have an adverse impact on near-term profitability, the long-term results will enhance shareholder value into the future."

Paycheck Protection Program Lending

Over the course of 2020 and 2021, the Company made 1,422 PPP loans totaling $110.4 million. As of June 30, 2022, there are 21 loans remaining totaling just under $2.0 million. At December 31, 2021, we had $16.2 million in outstanding PPP loans and have received $14.2 million in payments during the first six months of 2022. Of the remaining 21 loans outstanding, there are two loans with remaining balances totaling $1.4 million originated in 2020 that were partially forgiven by the Small Business Administration ("SBA") and the borrower is making payments. The other 19 loans were originated in 2021 totaling $610,000 and we anticipate the SBA to make a forgiveness decision prior to the end of the third quarter.

The Company received origination fees from the SBA for participating in the program. We recognize a portion of the origination fee as interest income, in an amount estimated to be our internal cost of origination, in the period in which the loan is made and amortize the remainder 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 include $367,000, $206,000 and $572,000 for the quarters ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively. Origination fees recognized for the two six-month periods ended June 30, 2022 and 2021 were $573,000 and $1,386,000, respectively. As of June 30, 2022, we had approximately $33,000 in deferred PPP origination fees to be recognized in future periods.

Asset Quality

Loans past due 30 to 89 days are $1.6 million representing 0.24% of the total loan portfolio at June 30, 2022 compared to $1.3 million or 0.21% at December 31, 2021. Total nonperforming assets, including loans on non-accrual status and OREO decreased to $5.8 million at June 30, 2022 from $6.1 million at December 31, 2021. Loans on non-accrual status declined to $4.9 million from $5.1 million at year end 2021. OREO decreased slightly to $944,000 from $960,000. There are no repossessed assets at either of those dates. 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 no provision for credit loss expense in the current and linked quarters compared to $165,000 in the prior year quarter. The allowance for loan losses ("ALLL") is $8.5 million at June 30, 2022 or 1.31% of total loans compared to $8.2 million at December 31, 2021 or 1.32% of total loans. During a review of loan system parameters, it was noted that payments collected and applied to loans previously charged-off, 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. Net recoveries are $342,000 for the first six months of 2022 compared to net charge offs of $511,000 for the comparative 2021 period. 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

For the quarter ended June 30, 2022, net interest income is $9.9 million, reflecting a $1.1 million or 13% increase over the $8.8 million for the linked March quarter and a $980,000 or 11% increase over the $8.9 million reported for the prior year period. The net interest margin for the three-month period ended June 30, 2022 is 3.27% compared to 2.91% for the linked quarter and 2.85% for the comparative prior year quarter. When comparing the current quarter net interest margin to both comparative quarters, the increase was due to a transition from lower yielding assets into investment securities and loans, a reduction in interest-bearing liabilities and higher short-term interest rates resulting from actions of the Federal Open Market Committee ("FOMC") of the Federal Reserve Bank.

Compared to the linked quarter, average balances of investment securities increased by $31.9 million and loans by $19.4 million. These increases were funded through a reduction in average interest-earning deposits at correspondent banks. This shift resulted in an increase in the yield on earning assets of 34 basis point to 3.58% from 3.24%. Average balances of interest-bearing liabilities dropped by $22.8 million comprised of a $19.8 million decline in interest-bearing deposits and a $3.0 million decrease in borrowed funds. The cost of interest-bearing funds declined by 3 basis points to 0.31% from 0.34%.

Compared to the prior year quarter ended June 30, 2021, average balances of investment securities increased by $65.8 million and loans by $11.9 million. The yield on earning assets improved by 37 basis points from 3.21%. Interest-bearing deposits declined by $23.4 million. Although average borrowed funds increased by $9.4 million, the cost of those borrowing declined from 7.16% to 4.19%. The cost of interest-bearing liabilities declined 5 basis points from 0.36%.

The FOMC raised short-term interest rates on March 17, 2022 by 25 basis points which moved the Wall Street Journal Prime Rate to 3.50% from 3.25%. Two additional rate hikes of 50 basis points on May 5, 2022 and 75 basis points on June 16, 2022 have raised the Prime Rate to 4.75%. Approximately 27% of the Company's loan portfolio is variable rate. Due to the timing of the 2022 rate increases, only the first increase of 25 basis points is fully reflected in the June 30, 2022 quarter. The second rate increase came about halfway through the quarter and the third with just less than half a month remaining. It is widely anticipated that the FOMC will raise short-term interest rates again at the conclusion of its July 27, 2022 meeting. While we believe our net interest margin will continue to increase, we do anticipate an increase in deposit rates will cause an increase in the cost of interest-bearing liabilities and therefore, slow the pace of margin increase.

Net interest income is $18.7 million for the six-month period ended June 30, 2022 compared to $17.3 million for the prior year period ended June 30, 2021. Net interest margin for the current six-month period is 3.08% compared to 2.86% for the comparative 2021 period. The total yield on earning assets increased to 3.41% from 3.24% due to the increase in higher yielding assets. The cost of funds declined by 5 basis points from 0.38% to 0.33%.

During the second quarter, 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. The adjustment positively impacted the net interest margin for the current quarter by 8 basis points and for the six-month period by 5 basis points.

Non-Interest Income

Total non-interest income is $3.1 million for the current quarter compared to $2.7 million for the linked March quarter and $3.2 million for the prior year quarter. Service charges and fees associated with deposit accounts accounted for the largest category of non-interest income and is $2.3 million in the current quarter compared to $2.2 million for both the March 2022 and June 2021 quarters. Interchange revenue from debit card usage is $1.3 million in both the current and linked quarters compared to $1.4 million in the prior year period. NSF fees totaled $756,000 for the June 2022 quarter compared to $704,000 for the linked quarter and $523,000 for the quarter ended June 30, 2021. Due primarily to the stimulus injected into the economy by the government in response to the COVID-19 pandemic, NSF fees had dropped significantly over the past several years. As the stimulus has subsided, NSF fee levels are moving to more normalized levels. Service charges on deposit accounts is relatively flat over the three comparative periods at $226,000, $246,000 and $238,000, respectively.

Revenue from the sale of mortgage loans has been adversely impacted by the increase in interest rates. Although gains from the sale of originated mortgages in the current quarter are $281,000, up from $239,000 from the March 2022 quarter, they declined by 44% or $217,000 from the $498,000 reported for the prior year period. Despite the increase in mortgage rates, inventory remains low in southwest Louisiana due to the 2020 hurricanes, and as a result, demand for housing remains strong. Other non-interest income is $463,000 for the current quarter, $201,000 for the linked quarter and $470,000 for the prior year quarter. Other non-interest income for the quarter ended March 31, 2022 included $237,000 in fair market value losses on certain equity investments. The quarter ended June 30, 2021 included gains on the sale of investment securities of $5,000.

Non-interest income for the six-month period ended June 30, 2022 is $5.7 million compared to $5.8 million for the prior year six-month period. As previously noted, NSF fees have returned to a more normalized level following the conclusion of government stimulus and increased over 46% to $1.5 million compared to $1.0 million. That increase was more than offset by a $315,000 decline in gains on the sale of originated mortgage loans and a $183,000 reduction in other non-interest income. The decline in other non-interest income is due to a market value loss recorded on certain equity investments of $286,000 compared to losses of $61,000 for the prior year period. Gains on the sale of investment securities are $7,000 for the prior year period with no sales occurring in the current period.

Non-Interest Expense

Total non-interest expense is $9.2 million for the quarter ended June 30, 2022 compared to $9.0 million and $8.8 million for the March 2022 and June 2021 quarters, respectively. Salary and employee benefits expense for the current quarter is $4.7 million, $4.6 million for the linked quarter and $4.5 million for the prior year quarter. As we expand the Company's footprint to the Baton Rouge and Mandeville markets, we anticipate salaries and employee benefits expense to increase through the end of 2022 and into 2023.

Occupancy expense, data processing, and advertising and public relations expenses have remained relatively stable over the three comparative periods. Occupancy expense is $1.2 million in current and linked quarters and $1.3 million in the prior year quarter; data processing is $1.1 million, $1.2 million and $1.1 million, respectively; and advertising and public relations expense is $390,000, $342,000 and $376,000, respectively. We anticipate all of these non-interest expense categories to increase as we execute our expansion plans.

Other non-interest expenses are $1.7 million for the current quarter and linked quarter compared to $1.5 million for the prior year quarter. The largest components of non-interest expenses are comprised of professional fees, FDIC insurance assessments, telecommunication expenses, accruals for ad valorem taxes and losses due to fraud. The three-month period ended June 30, 2022 includes $283,000 of losses associated with the sale of a building formerly used as a bank branch. Additionally, the linked quarter ended March 31, 2022 includes a $1,000 loss on the sale of other real estate owned.

Total non-interest expenses for the six-month period ended June 30, 2022 are $18.2 million, up $697,000 or 4% from $17.5 million for the prior year. Increases in salaries and employee benefits, data processing and other non-interest expenses of $441,000, $165,000 and $181,000 are partially offset by a decline in occupancy expense of $93,000. Non-recurring expenses include $283,000 in losses associated with the disposal of a former bank building in the current year period and $407,000 in losses on the disposal of other real estate owned in the prior year period.

Income tax expense is $613,000 for the current quarter compared to $388,000 for the March 2022 quarter and $470,000 for the June 2021 quarter. The increase is primarily due to growth in pre-tax income. The effective tax rate is 16.34% in the current quarter compared to 15.54% for the linked quarter and 15.34% in the prior year quarter. A smaller percentage of total pre-tax income in the current quarter is from tax-exempt sources than a year ago. Year-to-date, income tax expense was $1.0 million with an effective rate of 16.02% compared to $832,000 and 15.56% for the prior year six-month period.

Balance Sheet

Total assets are $1.3 billion at June 30, 2022, reflecting an $83.1 million or 6% decrease over the $1.4 billion at December 31, 2021. Loans held for investment constitutes the largest asset category at $653.8 million and has increased by $31.2 million from $622.6 million reported at the prior year end. The increase in loans is comprised of a net increase of $45.4 million in non-PPP loans and a net decline in PPP loans of $14.2 million. Investment securities declined by $10.1 million to $475.2 million from $485.4 million at December 31, 2021. The decline was the net result of new investments of $40.9 million less a $51.0 million drop in the fair market value of the portfolio. Other assets increased by $6.1 million as a result of a $10.4 million increase in the deferred tax asset less a $5.1 million decrease in equity investments. Cash and interest bearing deposits with banks declined by $107.4 million and was used to fund deposit outflows and the increases in higher yielding assets.

Over the past six months, total deposits decreased by $26.2 million or 2% and are $1.2 billion at both June 30, 2022 and December 31, 2021. Over the past two years, deposit levels have increased significantly due to US government stimulus directed at both consumers and small businesses. Additionally, many customers received insurance proceeds for hurricane damage sustained in the fall of 2020. The end of government stimulus, pent up demand from easing pandemic restrictions and inflationary pressures on the food and energy sectors have caused customers to spend more money. Money market account balances are down $17.8 million year-to-date. One account is responsible for $16.1 million of that decline as the business was acquired and the funds were transferred and consolidated at the acquirer's bank. Savings accounts, time deposits and interest-bearing demand deposits are down $8.2 million, $7.4 million and $2.7 million, respectively. Non-interest bearing demand deposits have increased by $9.9 million, totaling $428.9 million or 36% of total deposits.

The total of all other liabilities decreased by $19.7 million to $34.2 million from $53.9 million at December 31, 2021. The Company issued $30.0 million in subordinated debt in December 2021 and used $17.5 million of those proceeds to repay a tranche of subordinated debt issued in January 2017.

Stockholders' equity decreased by $37.2 million to $64.0 million at June 30, 2022 from $101.2 million at December 31, 2021. The rapid increase in interest rates has negatively impacted the fair market value of the Company's available for sale investment security portfolio. The impact of the decline, net of deferred tax benefits, is $40.3 million. The Company has bought back 16,300 shares of stock totaling $464,000 and paid $1.7 million in dividends in 2022. These decreases are partially offset by $5.2 million in net income. Total shares outstanding at June 30, 2022 are 3,413,760 compared to 3,430,060 at December 31, 2021. Tangible book value per share is currently $17.53 compared to $28.29 at December 31, 2021. The decline in tangible book value is due to the accumulated other comprehensive loss ("AOCL") for the six month period.

Key Performance Ratios

Return on average assets ("ROA") is 0.97% for the current quarter compared to 0.64% for the linked quarter and 0.76% for the prior year quarter. ROA for the six-month periods ended June 30, 2022 is 0.81% compared to 0.68% for the prior year period. Return on average equity ("ROE") is 15.67% for the current three-month period, 8.42% for the linked period and 11.11% for the prior year period. ROE for the six-month period ended June 30, 2022 is 11.64% compared to 9.51% for the prior year period. ROA for the three-month period and six-month periods ended June 30, 2022 reflect higher levels of net income over the comparative periods. ROE for the current periods is positively impacted by higher levels of net income and lower book equity levels due to the AOCL.

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 southwest 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 23 full service branch offices located along the Interstate 10 corridor from Lake Charles to Lafayette, 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 Jun 2022				Actual Dec 2021				$ Variance			% Variance
Assets
Cash and due from banks			23,990,323				18,552,783			5,437,540				29.3
Interest bearing deposits with banks			62,795,636				175,657,295			(112,861,659	)			(64.3	)
Investment Securities - Taxable			341,523,601				354,300,423			(12,776,822	)			(3.6	)
Investment Securities - Tax-exempt			133,709,285				131,081,611			2,627,674				2.0
Mortgage loans held for sale			1,079,163				705,950			373,213				52.9
Loans, net of unearned income			653,772,974				622,565,024			31,207,950				5.0
Less: Allowance for loan losses			(8,532,042	)			(8,189,747	)		(342,295	)			4.2
Premises and equipment, net			20,561,172				23,160,984			(2,599,812	)			(11.2	)
Accrued interest receivable			4,352,335				4,492,037			(139,702	)			(3.1	)
Other real estate			944,057				1,053,698			(109,641	)			(10.4	)
Other assets			39,267,714				33,196,334			6,071,380				18.3
Total Assets			1,273,464,218				1,356,576,392			(83,112,174	)			(6.1	)
Liabilities
Non-Interest Bearing Deposits			428,942,590				419,021,687			9,920,903				2.4
Interest bearing demand deposits			238,360,140				241,045,730			(2,685,590	)			(1.1	)
Savings and Money Market Deposits			399,727,969				425,749,299			(26,021,330	)			(6.1	)
Time Deposits - Retail			108,185,087				115,623,464			(7,438,377	)			(6.4	)
Total Deposits			1,175,215,786				1,201,440,180			(26,224,394	)			(2.2	)
Accrued expenses and other liabilities			4,484,498				6,703,008			(2,218,510	)			(33.1	)
Other Borrowings			29,728,717				47,203,745			(17,475,028	)			(37.0	)
Total Liabilities			1,209,429,001				1,255,346,933			(45,917,932	)			(3.7	)
Equity
Common stock
3,413,760 shares outstanding at 6.30.22
3,430,060 shares outstanding at 12.31.21			21,336,000				21,437,875			(101,875	)			(0.5	)
Capital surplus			10,163,269				10,525,694			(362,425	)			(3.4	)
Retained earnings			71,698,395				68,164,751			3,533,644				5.2
Accumulated other comprehensive income (loss)			(39,056,386	)			1,271,641			(40,328,027	)			(3,171.3	)
Less: Notes receivable common stock			(106,061	)			(170,502	)		64,441				(37.8	)
Total Equity			64,035,217				101,229,459			(37,194,242	)			(36.7	)
Total Liabilities & Equity			1,273,464,218				1,356,576,392			(83,112,174	)			(6.1	)

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

		QTD Actual Jun 2022				QTD Actual Mar 2022				$ Variance				% Variance			QTD Actual Jun 2021			$ Variance			% Variance
Interest Income
Interest on Loans			8,509,661				7,692,991				816,670			10.6			8,119,069			390,592			4.8
Mortgage Loans Held For Sale			11,180				6,666				4,514			67.7			11,093			87			0.8
Interest on deposits with banks			172,285				82,507				89,778			108.8			65,640			106,645			162.5
Investment Securities - Taxable			1,334,136				1,246,884				87,252			7.0			1,060,427			273,709			25.8
Investment Securities - Tax-exempt			806,146				791,016				15,130			1.9			806,077			69			0.0
Total Interest Income			10,833,408				9,820,064				1,013,344			10.3			10,062,306			771,102			7.7
Interest Expense
Interest bearing demand deposits			210,783				205,294				5,489			2.7			231,346			(20,563	)		(8.9	)
Savings and Money Market Deposits			197,234				212,474				(15,240	)		(7.2	)		215,488			(18,254	)		(8.5	)
Time Deposits - Retail			210,505				238,005				(27,500	)		(11.6	)		326,831			(116,326	)		(35.6	)
Total Interest Expense on Deposits			618,522				655,773				(37,251	)		(5.7	)		773,665			(155,143	)		(20.1	)
FHLB Advances			-				-				-			-			30,435			(30,435	)		(100.0	)
Interest on other borrowings			314,787				363,909				(49,122	)		(13.5	)		338,533			(23,746	)		(7.0	)
Total Interest Expense			933,309				1,019,682				(86,373	)		(8.5	)		1,142,633			(209,324	)		(18.3	)
Net Interest Income			9,900,099				8,800,382				1,099,717			12.5			8,919,673			980,426			11.0
Provision for loan losses			-				-				-			-			165,000			(165,000	)		(100.0	)
Net In. Inc. After Prov. for Loan Losses			9,900,099				8,800,382				1,099,717			12.5			8,754,673			1,145,426			13.1
Non Interest Income
Service charges and fees			2,322,238				2,224,632				97,606			4.4			2,188,293			133,945			6.1
Mortgage loan and related fees			280,959				238,911				42,048			17.6			497,890			(216,931	)		(43.6	)
Other noninterest income			462,603				200,507				262,096			130.7			470,484			(7,881	)		(1.7	)
Total Non Interest Income			3,065,800				2,664,050				401,750			15.1			3,156,667			(90,867	)		(2.9	)
Non Interest Expense
Salaries and employee benefits			4,728,466				4,596,179				132,287			2.9			4,546,180			182,286			4.0
Occupancy			1,236,207				1,203,330				32,877			2.7			1,291,573			(55,366	)		(4.3	)
Advertising and public relations			389,976				342,034				47,942			14.0			376,300			13,676			3.6
Data Processing			1,126,778				1,151,010				(24,232	)		(2.1	)		1,135,337			(8,559	)		(0.8	)
Other noninterest expense			1,734,796				1,675,690				59,106			3.5			1,498,273			236,523			15.8
Total Non Interest Expense			9,216,223				8,968,243				247,980			2.8			8,847,663			368,560			4.2
Income Before Taxes			3,749,676				2,496,189				1,253,487			50.2			3,063,677			686,001			22.4
Income taxes			612,520				388,026				224,494			57.9			470,107			142,413			30.3
Net Income			3,137,156				2,108,163				1,028,993			48.8			2,593,570			543,588			21.0
Per common share data:**
Earnings		$	0.92			$	0.62										0.76
Weighted average number of shares outstanding			3,420,677				3,426,160										3,429,060
** Prior period shares outstanding adjusted for a 2-for-1 stock split

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

		YTD Actual Jun 2022				YTD Actual Jun 2021				$ Variance			% Variance
Interest Income
Interest on Loans			16,202,653				16,187,163			15,490			0.1
Mortgage Loans Held For Sale			17,846				19,673			(1,827	)		(9.3	)
Interest on deposits with banks			254,793				126,563			128,230			101.3
Investment Securities - Taxable			2,581,021				1,724,477			856,544			49.7
Investment Securities - Tax-exempt			1,597,162				1,606,890			(9,728	)		(0.6	)
Total Interest Income			20,653,475				19,664,766			988,709			5.0
Interest Expense
Interest bearing demand deposits			416,077				476,182			(60,105	)		(12.6	)
Savings and Money Market Deposits			409,708				426,788			(17,080	)		(4.0	)
Time Deposits - Retail			448,510				691,108			(242,598	)		(35.1	)
Total Interest Expense on Deposits			1,274,295				1,594,078			(319,783	)		(20.1	)
FHLB Advances			-				60,691			(60,691	)		(100.0	)
Interest on other borrowings			678,696				677,325			1,371			0.2
Total Interest Expense			1,952,991				2,332,094			(379,103	)		(16.3	)
Net Interest Income			18,700,484				17,332,672			1,367,812			7.9
Provision for loan losses			-				330,000			(330,000	)		(100.0	)
Net In. Inc. After Prov. for Loan Losses			18,700,484				17,002,672			1,697,812			10.0
Non Interest Income
Service charges and fees			4,546,870				4,149,298			397,572			9.6
Mortgage loan and related fees			519,871				834,656			(314,785	)		(37.7	)
Other noninterest income			663,110				846,009			(182,899	)		(21.6	)
Total Non Interest Income			5,729,851				5,829,963			(100,112	)		(1.7	)
Non Interest Expense
Salaries and employee benefits			9,324,646				8,884,019			440,627			5.0
Occupancy			2,439,537				2,532,084			(92,547	)		(3.7	)
Advertising and public relations			732,009				728,075			3,934			0.5
Data Processing			2,277,788				2,113,255			164,533			7.8
Other noninterest expense			3,410,586				3,229,817			180,769			5.6
Total Non Interest Expense			18,184,566				17,487,250			697,316			4.0
Income Before Taxes			6,245,769				5,345,385			900,384			16.8
Income taxes			1,000,546				831,836			168,710			20.3
Net Income			5,245,223				4,513,549			731,674			16.2
Per common share data:**
Earnings		$	1.53			$	1.32
Weighted average number of shares outstanding			3,420,677				3,429,060
** Prior period shares outstanding adjusted for a 2-for-1 stock split

JD BANCSHARES, INC. AND SUBSIDIARIES
Margin Analysis Compare

	Average Yield and Rate										Average Funds										Interest Income/Expense
	QTD Actual Jun 2022			QTD Actual Jun 2021				Change			QTD Actual Jun 2022				QTD Actual Jun 2021			Change			QTD Actual Jun 2022			QTD Actual Jun 2021				Change
Earning Assets
Loans		5.08			4.78				0.30			643,629,504				631,722,987			11,906,517			8,142,306			7,546,807				595,499
PPP fee recognition		0.22			0.38				(0.16	)		-				-			-			367,355			572,262				(204,907	)
Loans with fees		5.30			5.16				0.14			643,629,504				631,722,987			11,906,517			8,509,661			8,119,069				390,592
Mortgage loans held for sale		4.62			2.73				1.89			967,685				1,626,938			(659,253	)		11,180			11,093				87
Deposits with banks		1.00			0.14				0.86			69,405,399				192,397,277			(122,991,878	)		172,285			65,640				106,645
Investment securities - taxable		1.36			1.27				0.09			391,082,609				333,067,386			58,015,223			1,334,136			1,060,427				273,709
Investment securities - tax-exempt		3.08			3.27				(0.19	)		132,696,414				124,923,272			7,773,142			806,146			806,077				69
Total Earning Assets		3.58			3.21				0.37			1,237,781,611				1,283,737,860			(45,956,249	)		10,833,408			10,062,306				771,102
Interest bearing liabilities
Interest bearing demand		0.36			0.39				(0.03	)		235,149,433				239,369,603			(4,220,170	)		210,783			231,346				(20,563	)
Savings and Money Market		0.19			0.21				(0.02	)		406,573,873				410,979,581			(4,405,708	)		197,234			215,488				(18,254	)
Time deposits - Retail		0.77			1.05				(0.28	)		110,347,902				125,124,844			(14,776,942	)		210,505			326,831				(116,326	)
Total interest bearing deposits		0.33			0.40				(0.07	)		752,071,208				775,474,028			(23,402,820	)		618,522			773,665				(155,143	)
Federal home Loan Bank advances		-			4.51				(4.51	)		-				2,669,211			(2,669,211	)		-			30,435				(30,435	)
Other borrowings		4.19			7.56				(3.37	)		29,730,636				17,708,780			12,021,856			314,787			338,533				(23,746	)
Total borrowed funds		4.19			7.16				(2.97	)		29,730,636				20,377,991			9,352,645			314,787			368,968				(54,181	)
Total interest-bearing liabilities		0.48			0.57				(0.09	)		781,801,844				795,852,019			(14,050,175	)		933,309			1,142,633				(209,324	)
Net interest rate spread		3.10			2.64				0.46													9,900,099			8,919,673				980,426
Effect of non-interest bearing deposits		(0.17	)		(0.21	)			0.04			424,595,554				467,574,966			(42,979,412	)
Cost of funds		0.31			0.36				(0.05	)
Net interest margin		3.27			2.85				0.42

JD BANCSHARES, INC. AND SUBSIDIARIES
Margin Analysis Compare

		Average Yield and Rate										Average Funds						Interest Income/Expense
		YTD Actual Jun 2022			YTD Actual Jun 2021			Change				YTD Actual Jun 2022		YTD Actual Jun 2021		Change		YTD Actual Jun 2022			YTD Actual Jun 2021			Change
Earning Assets
Loans			4.98			4.74			0.24			633,971,229		628,002,974		5,968,255			15,629,184			14,800,885			828,299
PPP fee recognition			0.17			0.46			(0.29	)		-		-		-			573,469			1,386,278			(812,809	)
Loans with fees			5.15			5.20			(0.05	)		633,971,229		628,002,974		5,968,255			16,202,653			16,187,163			15,490
Mortgage loans held for sale			4.13			2.72			1.41			865,111		1,444,717		(579,606	)		17,846			19,673			(1,827	)
Deposits with banks			0.50			0.12			0.38			102,200,792		217,030,849		(114,830,057	)		254,793			126,563			128,229
Investment securities - taxable			1.37			1.23			0.14			376,231,210		281,160,093		95,071,117			2,581,021			1,724,477			856,544
Investment securities - tax-exempt			3.07			3.29			(0.22	)		131,702,392		123,767,400		7,934,992			1,597,162			1,606,890			(9,727	)
Total Earning Assets			3.41			3.24			0.17			1,244,970,734		1,251,406,033		(6,435,299	)		20,653,475			19,664,766			988,709
Interest bearing liabilities
Interest bearing demand			0.36			0.41			(0.05	)		235,484,375		237,039,809		(1,555,434	)		416,077			476,183			(60,106	)
Savings and Money Market			0.20			0.22			(0.02	)		413,948,145		393,655,146		20,293,000			409,708			426,788			(17,080	)
Time deposits - Retail			0.80			1.10			(0.30	)		112,493,378		126,222,916		(13,729,539	)		448,510			691,108			(242,597	)
Total interest bearing deposits			0.34			0.42			(0.08	)		761,925,898		756,917,871		5,008,027			1,274,295			1,594,079			(319,784	)
Federal home Loan Bank advances			-			4.47			(4.47	)		-		2,702,287		(2,702,287	)		-			60,691			(60,691	)
Other borrowings			4.33			7.58			(3.25	)		31,207,733		17,767,749		13,439,984			678,696			677,325			1,371
Total borrowed funds			4.33			7.17			(2.84	)		31,207,733		20,470,036		10,737,697			678,696			738,016			(59,320	)
Total interest-bearing liabilities			0.50			0.60			(0.10	)		793,133,631		777,387,907		15,745,723			1,952,991			2,332,095			(379,103	)
Net interest rate spread			2.91			2.63			0.28										18,700,484			17,332,671			1,367,812
Effect of non-interest bearing deposits			(0.17	)		(0.22	)		0.05			423,336,162		457,268,935		(33,932,773	)
Cost of funds			0.33			0.38			(0.05	)
Net interest margin			3.08			2.86			0.22

JD BANCSHARES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION

Financial Ratios

														For the Six				For the Six
		For the Qtr				For the Qtr				For the Qtr				Months				Months
		Ended				Ended				Ended				Ended				Ended
		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Performance Ratios
Return on Average Assets (ROA)			0.97	%			0.64	%			0.76	%			0.81	%			0.68	%
ROA based on Pre-tax, pre-provision operating income			1.05	%			0.70	%			0.78	%			0.87	%			0.71	%
Return on Average Equity (ROE)			15.67	%			8.42	%			11.11	%			11.64	%			9.51	%
ROE based on Pre-tax, pre-provision operating income			16.85	%			9.15	%			11.35	%			12.57	%			9.88	%
Earnings per Share***		$	0.92			$	0.62			$	0.76			$	1.53			$	1.32
Net Interest Margin			3.27				2.91	%			2.85	%			3.09	%			2.86	%
Efficiency Ratio **			67.78	%			76.81	%			72.03	%			72.02	%			72.43	%
Non-Interest Income as a % of Avg. Assets**			0.95	%			0.81	%			0.93	%			0.88	%			0.88	%
Non-Interest Expense as a % of Avg. Assets**			2.78	%			2.73	%			2.61	%			2.75	%			2.58	%

		As of				As of
		June 30, 2022				December 31, 2021
Bank Level Capital Ratios:
Tier 1 Leverage Ratio		9.14% (Est.)					9.04	%
Common Equity Tier 1 Ratio		16.24% (Est.)					16.07	%
Tier 1 Risk-Based Capital Ratio		16.24% (Est.)					16.07	%
Total Risk-Based Capital Ratio		17.40% (Est.)					17.17	%
Company:
Tangible Equity / Total Assets			4.70	%			7.15	%
Tangible Book Value per Share***		$	17.53			$	28.29

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

														For the Six			For the Six
		For the Qtr				For the Qtr				For the Qtr				Months			Months
		Ended				Ended				Ended				Ended			Ended
		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022			June 30, 2021
Net Income (GAAP)		$	3,137,156			$	2,108,163			$	2,593,570			$	5,245,223		$	4,513,549
Provision for Loan Lossess			-				-				165,000				-			330,000
Net (Gain) Loss on OREO			(418	)			1,003				(1,454	)			585			406,906
Net (Gain) Loss on Securities			-				-				(4,508	)			-			(6,682	)
Non-recurring Revenue			(291,127	)			-				-				(291,127	)		-
Non-recurring Expenses			282,961				-				-				282,961			-
Nonrecurring Revenue - PPP origination fees			(367,355	)			(206,114	)			(572,262	)			(573,469	)		(1,386,278	)
Income Tax Expense			612,520				388,026				470,107				1,000,546			831,836
Pre-tax, Pre-Provision Operating Income		$	3,373,737			$	2,291,078			$	2,650,453			$	5,664,719		$	4,689,331

** Non-recurring items are eliminated for this ratio
*** Prior period shares outstanding adjusted for 10% stock dividend and stock split

For more information 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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