FS Bancorp : Second Quarter ending June 30, 2022

JOSEPH URBANSKI

President

Chief Executive Officer

CONTACT	FOR IMMEDIATE RELEASE	July 18, 2022
Stacy Merrifield
Investor Relations
260.463.7111
[e-mail]

FS Bancorp Reports June 30, 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 June 30, 2022.

FS Bancorp is pleased to report record quarterly earnings for the quarter ending June 30, 2022. Net income for the quarter ended June 30, 2022 was $4.2 million compared to $3.7 million for the same 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 second quarter of

2022 included the following items:

• FS Bancorp was ranked 21st on the American Banker Association (ABA) list of top 200 banks (assets below $2 billion) based on average return on equity for 2019 to 2021. This is the highest ABA ranking FS Bancorp has ever achieved, and FS Bancorp was the second highest ranked bank in Indiana for our asset size category on the ABA's report this year.
• Total loans excluding warehouse participations and Paycheck Protection Program (PPP) loans totaled $710 million at June 30, 2022 compared to $613 million at June 30, 2021. At June 30, 2022 all PPP loans had been repaid and warehouse participations totaled $2 million.
• Total assets, total loans and total deposits all reached record quarter end levels at June 30, 2022.
• Asset quality remains very good through the second quarter of 2022. Net recoveries during the second quarter of 2022 totaled $1,000, and total delinquencies were 0.06% as of loans at June 30, 2022.
• During the quarter ending June 30, 2022 and 2021, the Company experienced gains of $0 and $387,000, respectively, on the sale of stock.

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

www.GoFSB.com

• During the second quarter of 2021, the Bank committed nearly $450,000 to areas schools to support student athletes across our footprint. This expense was included in advertising and market expense in the second quarter of 2021. We did not recognize expense for contributions made in 2022 because they were expensed in the prior year when they were committed.

We are pleased to have achieved 16% loan growth (excluding warehouse participations and PPP loans) over the past twelve months while maintaining strong asset quality indicators. During the second 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.

We are very pleased that we had a great first half in 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

June 30, 2022 and 2021 (Unaudited)

			June 30,		June 30,
(Dollars in thousands)		2022		2021
Assets
Cash and due from banks	$	94,640	$	159,642
Investment securities		297,531		248,049
Federal Home Loan Bank stock		2,143		2,265
Total loans		711,703		628,315
Less allowance for loan losses		(6,679)		(6,689)
Loans, net		705,024		621,626
Premises and equipment, net		10,261		10,612
CSV- Insurance		18,785		14,499
Goodwill and other intangible assets		2,604		2,604
Other assets		15,445		10,291
Total Assets	$	1,146,433	$	1,069,588
Liabilities
Deposits
Noninterest-bearing demand	$	287,838	$	267,707
Interest-bearing demand		457,739		378,940
Savings		193,827		171,556
Time under $250,000		73,301		85,783
Time $250,000 and over		32,604		21,407
Total deposits		1,045,309		925,393
Repurchase agreements		7,457		5,386
Federal Home Loan Bank advances		-		31,434
Other liabilities		6,683		8,234
Total Liabilities		1,059,449		970,447
Shareholders' Equity
Common stock: No par value, 10,000,000 shares
authorized; 4,763,904 shares issued and
4,329,876 and 4,328,858 shares outstanding 2022
and 2021		149		149
Paid-in capital		3,017		3,737
Retained earnings		111,341		99,363
Net unrealized gains (losses) on securities		(19,663)		3,573
Less treasury stock, at cost; 434,028 and 435,046
shares 2022 and 2021		(7,860)		(7,681)
Total Shareholders' Equity		86,984		99,141
Total Liabilities and Shareholders' Equity		$	1,146,433	$	1,069,588

FS BANCORP

CONSOLIDATED STATEMENTS OF INCOME

For the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)

		Three Months Ended	Six Months Ended
(Dollars in thousands except earnings per share)		June 30,		June 30,
		2022		2021	2022		2021
Interest Income
Interest and fees on loans	$	7,621	$	7,004	$ 14,866	$	14,886
Interest on investment securities		1,424		1,019	2,771		1,894
Other interest and dividend income		184		72	234		132
Total Interest Income		9,229		8,095	17,871		16,912

Interest Expense

Interest on deposits

Interest on FHLB advances and other borrowings

Total Interest Expense

Net Interest Income

Provision for loan losses

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 (benefit)

Net Income

Basic Earnings Per Share

Diluted Earnings Per Common Share

	399		273		665		570
	1		106		1		210
	400		379		666		780
	8,829		7,716		17,205		16,132
	60		-		100		56
	8,769		7,716		17,105		16,076
	496		406		945		761
	900		886		1,713		1,581
	89		307		237		532
	-		400		-		401
	275		281		558		633
	1,760		2,280		3,453		3,908
	3,117		3,046		6,278		6,262
	488		474		1,008		969
	505		430		1,025		952
	150		545		274		661
	1,234		1,086		2,327		2,015
	5,494		5,581		10,912		10,859
	5,035		4,415		9,646		9,125
	807		745		1,565		1,549
$	4,228	$	3,670	$	8,081	$	7,576
$	0.97	$	0.85	$	1.86	$	1.75
$	0.97	$	0.84	$	1.85	$	1.74