FS Bancorp : First Quarter ending March 31, 2022

JOSEPH URBANSKI

President

Chief Executive Officer

CONTACT Stacy Merrifield Investor Relations [e-mail]

FOR IMMEDIATE RELEASE

April 28, 2022

FS Bancorp Reports March 31, 2022 Financial Results

LAGRANGE, IN. - FS Bancorp (the "Company") (OTCPK: FXLG) parent company of Farmers State Bank (the "Bank") announced earnings for the quarter ended March 31, 2022.

FS Bancorp is pleased to report solid earnings for the quarter ending March 31, 2022. Net income for the quarter ended March 31, 2022 was $3.9 million compared to $3.9 million for the same quarter of 2021. While the first quarter of 2021 included $437,000 of fee income from the Paycheck Protection Program (PPP), our first quarter results for 2022 did not include any PPP fee income. Additionally, income from warehouse participations loans decreased $328,000 when comparing the first quarter of 2022 to the first quarter of 2021. The continued growth of our balance sheet combined with good expense management has allowed us to maintain strong core earnings. Highlights of the first quarter of 2022 included the following items:

• • Total loans excluding warehouse participations and Paycheck Protection Program (PPP) loans totaled $678 million at March 31, 2022 compared to $600 million at March 31, 2021. At March 31, 2022 our one remaining PPP loan had an outstanding balance of $2,000 and warehouse participations totaled $20 million.

• • Total assets, total loans and total deposits all reached record quarter end levels at March 31, 2022.

• • Asset quality remains very good through the first quarter of 2022. Net charge-offs during the first quarter of 2022 totaled $20,000, and total delinquencies were 0.23% as of loans at March 31, 2022.

We are pleased to have achieved 13% loan growth (excluding warehouse participations and PPP loans) over the past twelve months while maintaining strong asset quality indicators. During the first quarter of 2022, changes in market conditions including interest rates negatively impacted the value of our investment portfolio and the net unrealized losses on securities which is a component of shareholders' equity. The resulting decline in shareholders' equity does not impact regulatory capital levels as this amount is not a component of regulatory capital. As of March 31, 2022,

220 S. Detroit Street • LaGrange, Indiana 46761 • phone [phone] • fax [phone]www.GoFSB.com

Farmers State Bank's Tier 1 Leverage ratio was 8.9% compared to 8.7% at December 31, 2021 and 9.0% at March 31, 2021.

We are very pleased that we have a great start to 2022. Our entire team is focused on growing our Company and implementing changes that will be a benefit to our customers, employees and the communities we serve. Thank you for your continued investment in FS Bancorp and your support of our Farmers State Bank team.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as "expects," "intends," "believes," and "should," which are necessarily statements of belief as to the expected outcomes of future events. Actual results could materially differ from those presented. The Company's ability to predict future results involves a number of risks and uncertainties. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.

Founded in 1915 in Stroh, Indiana, Farmers State Bank is one of northeast Indiana's leading financial institutions and the home of Blue Button Banking. With corporate headquarters in LaGrange, Indiana, Farmers State Bank has been providing banking and financial services to both consumers and businesses for the past 100 years. To learn more, visit GoFSB.com.

FS BANCORP

CONSOLIDATED BALANCE SHEETS March 31, 2022 and 2021 (Unaudited)

(Dollars in thousands)

Assets

Cash and due from banks Investment securities

Federal Home Loan Bank stock Total loans

Less allowance for loan losses

Loans, net

Premises and equipment, net CSV- Insurance

Goodwill and other intangible assets Other assets

Total Assets

Liabilities

Deposits

Noninterest-bearing demand Interest-bearing demand Savings

Time under $250,000 Time $250,000 and over

Total deposits Repurchase agreements

Federal Home Loan Bank advances Other liabilities

Total Liabilities

Shareholders' Equity

Common stock: No par value, 10,000,000 shares authorized; 4,763,904 shares issued and 4,341,876 and 4,328,858 shares outstanding 2022 and 2021

Paid-in capital Retained earnings

Net unrealized gains (losses) on securities

Less treasury stock, at cost; 422,028 and 435,046 shares 2022 and 2021

Total Shareholders' Equity

Total Liabilities and Shareholders' Equity

March 31,March 31,2022

2021

$

66,991 $ 142,323

303,366 205,752

2,143 2,246

697,615 644,919

(6,618)

(6,687)

690,997 638,232

10,292 10,658

14,705 14,430

2,604 2,604

12,425 5,353

1,103,523

1,021,598

$

291,511 $ 272,003

419,672 345,411

193,206 160,206

73,703 84,490

21,522 19,245

999,614 881,355

6,930 5,356

- 31,430

6,676 8,142

1,013,220

926,283

149 149

3,006 3,692

107,938 96,450

(13,423) 2,705

(7,367)

(7,681)

90,303 $ 1,103,523

95,315 $ 1,021,598

FS BANCORP

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended March 31, 2022 and 2021 (Unaudited)

(Dollars in thousands except earnings per share)

Interest Income

Interest and fees on loans Interest on investment securities Other interest and dividend income

Total Interest Income

Interest Expense

Interest on deposits

Interest on FHLB advances and other borrowings

Total Interest Expense

Three Months EndedMarch 31, 2022 2021

$ 7,245

$ 7,882

1,347 875

50 60

8,642 8,817

266 297

- 104

266

401

Net Interest Income

Provision for loan losses

8,376 40

8,416 56

Net Interest Income after Provision for Loan Losses

Noninterest Income

Service charges on deposit accounts Credit and debit card income Mortgage banking

Gains and losses on securities Other income

Total Noninterest Income

Noninterest Expenses

Salaries and employee benefits

Occupancy expense on premises, furniture and equipment, net

Data processing expense Advertising and marketing expense Other expenses

Total Noninterest Expenses

Income Before Income Taxes

Income tax expense

Net Income

8,336 8,360

449 355

813 695

148 225

- 1

283 352

1,693 1,628

3,161 3,216

520 495

520 522

124 116

1,093 929

5,418 4,611 758 $ 3,853

5,278 4,710 804 $ 3,906

Basic Earnings Per Share

Diluted Earnings Per Common Share

$ $

0.89 0.88

• $ 0.90

• $ 0.90