FS Bancorp : First Quarter ending March 31, 2023

JOSEPH URBANSKI

President

Chief Executive Officer

CONTACT	FOR IMMEDIATE RELEASE	April 27, 2023
Stacy Merrifield
Investor Relations
260.463.7111
[e-mail]

FS Bancorp Reports March 31, 2023 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, 2023.

FS Bancorp is pleased to report solid earnings for the quarter ending March 31, 2023. Net income for the quarter ended March 31, 2023 was $3.7 million compared to $3.9 million for the same quarter of 2022. Core earnings continued to be strong with net interest income increasing $163,000 for the first three months of 2023 compared to the same period in 2022. Inflation and other factors led to higher overhead costs during 2023 resulting in slightly lower net income. Highlights of the first quarter of 2023 included the following items:

• Total loans were $746 million at March 31, 2023 compared to $698 million at March 31, 2022.
• Total deposits were $1,055,940,000 at March 31, 2023 compared to $999,614,000 at March 31, 2022, which represents a 6% increase. Total deposits include $30,939,000 and $4,711,000 of brokered deposits at March 31, 2023 and 2022, respectively.
• We maintained a solid balance sheet liquidity profile. At March 31, 2023, cash and due from banks totaled $78.6 million, and we also maintained $21.0 million in money market mutual funds (included in investment securities on the balance sheet). Additionally, our investment portfolio contains $101.6 million in other investments that are either floating rate or mature by June 30, 2025.
• We have meaningful borrowing capacity with the Federal Home Loan Bank of Indianapolis (FHLBI), Federal Reserve and other institutions totaling more than $450 million. Our borrowing capacity is greatly enhanced by the significant assets including mortgage loans that we pledge as collateral to FHLBI. Based on existing mortgage loans and investments pledged as collateral to FHLBI, Farmers State Bank has the ability to borrow $301 million beyond the current outstanding borrowings which only totaled $10 million at March 31, 2023.

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

www.GoFSB.com

• Asset quality remained very good through the first quarter of 2023. Net charge-offs during the first quarter of 2023 totaled $22,000, and total delinquencies were 0.15% of loans at March 31, 2023.

We are pleased to have achieved 7% loan growth over the past twelve months while maintaining strong asset quality indicators and a solid liquidity profile.

We are very pleased that we have had a good start to 2023. 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
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2023 and 2022	(Unaudited)
	March 31,	March 31,
(Dollars in thousands)	2023	2022
Assets

Cash and due from banks

Investment securities

Federal Home Loan Bank stock

Total loans

Less allowance for credit losses

Loans, net

Premises and equipment, net

Cash surrender value of life 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 4,299,615 and 4,341,876 shares outstanding 2023 and 2022

Paid-in capital Retained earnings

Net unrealized gains (losses) on securities

Less treasury stock, at cost; 464,289 and 422,028 shares 2023 and 2022

Total Shareholders' Equity

Total Liabilities and Shareholders' Equity

$	78,564	$	66,991
	299,005		303,366
	6,136		2,143
	745,826		697,615
	(7,003)		(6,618)
	738,823		690,997
	10,300		10,292
	19,125		14,705
	2,604		2,604
	16,070		12,425
	1,170,627		1,103,523

$ 288,101	$ 291,511
452,742	419,672
190,209	193,206
98,982	73,703
25,906	21,522
1,055,940	999,614
5,524	6,930
10,000	-
6,575	6,676
1,078,039	1,013,220

149	149
2,895	3,006
119,838	107,938
(21,243)	(13,423)
(9,051)	(7,367)
92,588	90,303
$ 1,170,627	$ 1,103,523

FS BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

		Three Months Ended
(Dollars in thousands except earnings per share)		March 31,
Interest Income		2023		2022
Interest and fees on loans	$	9,244	$	7,245
Interest on investment securities		1,557		1,347
Other interest and dividend income		789		50
Total Interest Income		11,590		8,642
Interest Expense
Interest on deposits		2,851		266
Interest on FHLB advances and other borrowings		200		-
Total Interest Expense		3,051		266
Net Interest Income		8,539		8,376
Credit loss expense -loans		-		40
Net Interest Income after Credit Loss Expense		8,539		8,336
Noninterest Income
Service charges on deposit accounts		554		449
Credit and debit card income		835		813
Mortgage banking		23		148
Gains and (losses) on securities		25		-
Other income		179		283
Total Noninterest Income		1,616		1,693
Noninterest Expenses
Salaries and employee benefits		3,293		3,161
Occupancy expense on premises, furniture and
equipment, net		499		520
Data processing expense		514		520
Advertising and marketing expense		150		124
Other expenses		1,417		1,093
Total Noninterest Expenses		5,873		5,418
Income Before Income Taxes		4,282		4,611
Income tax expense		616		758
Net Income	$	3,666	$	3,853
Basic Earnings Per Share
$	0.85	$	0.89
Diluted Earnings Per Common Share	$	0.85	$	0.88