FS Bancorp : Third Quarter ending September 30, 2021

FS Bancorp Reports September 30, 2021 Financial Results

FS Bancorp is pleased to report record earnings for the first nine months of 2021. Net income for the nine months ended September 30, 2021 was $11.6 million compared to $10.6 million for the same period of

2020. FS Bancorp experienced the following highlights during the third quarter of 2021:

• Total loans excluding warehouse participations and Paycheck Protection Program (PPP) loans totaled $629 million at September 30, 2021 compared to $595 million at September 30, 2020. At September 30, 2021, PPP loans totaled $3 million, and there were no warehouse participations.
• We prepaid $21.5 million of Federal Home Loan Bank advances with penalties totaling $248,000.
• Total deposits grew to a record $949 million at September 30, 2021.
• Total shareholders' equity was more than $100 million at September 30, 2021 representing an increase of more than $9 million since September 30, 2020.
• Net income for the quarter ending September 30, 2021 was $4.0 million compared to $4.1 million for the same quarter of 2020.
• PPP fee income was $724,000 and $165,000 for the three months ended September 30, 2021 and 2020 and $1,217,000 and $415,000 for the nine months ended September 30, 2021 and 2020, respectively.
• During the quarter ending September 30, 2021, the Company experienced a $132,000 gain on the sale of securities.
• Asset quality remains very good through the third quarter of 2021. Net charge-offs during the

first nine months of 2021 totaled $35,000, and total delinquencies were 0.12% of total loans at September 30, 2021.

The Company continues to perform very well in a challenging interest rate environment. Excess liquidity is the primary challenge that many financial institutions are currently facing, and we have continued to take a balanced approach between investing excess liquidity in our investment portfolio and holding higher levels of cash on our balance sheet.

We are pleased to have achieved 6% loan growth (excluding warehouse participations and PPP loans) over the past twelve months. Income from PPP loans has been a source of income for Farmers State Bank and other financial institutions during the past two years. As most of our PPP loans have been forgiven, we do not expect this to be a meaningful source of income going forward.

The Company's Board of Directors approved a special dividend of $0.32 per share and increased our regular dividend to $0.38 per share for the third quarter. Thank you for your continued investment in FS Bancorp and your support of our Farmers State Bank Team.

888.492.7111 / Telephone Banking 866.463.1110

FSBancorp and

Farmers State Bank

Roger A. Bird

Chairman, F S BANCORP

Chairman, Farmers State Bank

Member, Bird, Scheske, Reed &

Beemer P.C., Attorneys-at-Law

Jordi Disler

President, Parkview LaGrange Hospital

Winford Jones

President, Yoder's Shipshewana Hardware

Kevin Lambright

Partner, KC Squared Farms, LLC

Rodney Perkins

Co-owner, Perkins Twin Creek Farms, Stroh

Freeman D. Schlabach

President, Rock Run Industries

Kerry G. Sprunger

Retired Executive Vice President

Farmers State Bank

Joseph Urbanski

President & CEO, F S BANCORP President & CEO, Farmers State Bank

Honorary Directors

Gordon T. Anderson

Frederic J. Brown

Jerry O. Grogg

Thomas L. Miller

James W. Perkins

Miles S. Perkins

Ruth R. Perry

Joseph G. Pierce

C. Lynn Tracey

www.GoFSB.com

September 30, 2021

Report of Condition

FSBancorp

Report of iCondition

CONSOLIDATED BALANCE SHEETS

September 30, 2021 and 2020 (Unaudited)

(Dollars in thousands)	2021	2020
Assets	$158,666	$70,953
Cash and due from banks.......................................................................
Investment securities..............................................................................	247,314	171,858
Federal Home Loan Bank stock..............................................................	2,343	2,246
Total loans...............................................................................................	631,8004	678,229
Less allowance for loan losses......................................................	(6,611)	(6,619)
......................................................................................Loans, net	625,193		671,610
Premises and equipment, net.................................................................	10,475	10,862

CONSOLIDATED STATEMENTS OF INCOME

For the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)

		Three Months Ended	Nine Months Ended
		September 30,	September 30,
(Dollars in thousands except earnings per share)	2021	2020	2021	2020
Interest Income		$7,581	$7,869	$22,467
Interest and fees on loans..................................................	$23,282
Interest on investment securities........................................	1,104	821	2,998	2,230
Other interest and dividend income....................................	Total Interest Income	101	85	233	410
.	8,786		8,775		25,698		25,922

CSV-Insurance........................................................................................	14,569	14,288
Goodwill and other intangible assets......................................................	2,604	2,607
Other assets............................................................................................	11,052		5,368
Total Assets	$1,072,216		$949,792
Liabilities
Deposits	$272,360	$228,274
Noninterest-bearing demand...............................................................
Interest-bearing demand.....................................................................	393,732	306,310
Savings...............................................................................................	189,879	140,832
Time $250,000 and under...................................................................	73,640	92,312
Time over $250,000............................................................................	19,526	35,572
.................................................................................Total deposits	949,137		803,300
Repurchase agreements..........................................................................	7,498	6,876
Federal Home Loan Bank advances........................................................	10,000	43,423
Other liabilities..........................................................................................	5,383	4,712
Total Liabilities	972,018		858,311
Shareholders' Equity
Common stock: No par value, 5,000,000 shares authorized;
2,381,952 shares issued; and 2,163,232 and 2,180,428	149	149
shares outstanding 2021 and 2020.....................................................
Paid-in capital...........................................................................................	3,697	3,493
Retained earnings....................................................................................	101,878	90,347
Net unrealized gains (losses) on securities..............................................	2,306	3,887
Less treasury stock, at cost; 218,720 and 201,524 shares 2021 & 2020	(7,832)	(6,395)
Total Shareholders' Equity	100,198		91,481
Total Liabilities and Shareholders' Equity	$1,072,216
$949,792

Interest Expense
Interest on deposits.............................................................	283
Interest on FHLB advances and other borrowings..............	77
Total Interest Expense	360
Net Interest Income......................................................	8,426
Provision for loan losses.....................................................	(56)
Net Interest Income after
Provision for Loan Losses........................................	8,482
Noninterest Income
Service charges on deposit accounts.................................	465
Credit and Debit card income.............................................	891
Mortgage banking...............................................................	177
Gains (losses) on securities................................................	132
Other income.......................................................................	281
Total Noninterest Income	1,946
Noninterest Expense
Salaries and employee benefits..........................................	3,163
Occupancy expense of premises, furniture & equip. net.....	490
Data processing expense....................................................	473
Advertising and marketing expense....................................	150
Other expense.....................................................................	1,341
Total Noninterest Expense	5,617
Income Before Income Taxes.................................	4,811
Provision for income taxes..................................................	780
Net Income.......................................................................	$4,031
Basic Earnings per Common Share...................	$1.86
Diluted Earnings per Common Share................	$1.85

502		853	2,116
172		287	513
674		1,140				2,629
8,101		24,588	23,293
78		-			380
8,023		24,588	22,913
410		1,226	1,189
670		2,472	1,888
232		709	355
-		533	-
308		914	890
1,620		5,854				4,322
2,801		9,425	8,542
473		1,459	1,370
403		1,425	1,350
145		811	367
900		3,356	2,889
4,722		16,476		14,518
4,921		13,936
		12,717
	863			2,329		2,121
$4,058		$11,607
		$10,596
			$5.36
$1.86		$4.86
$1.85		$5.32	$4.82

F S Bancorp	F S Bancorp