FS Bancorp : Third Quarter ending September 30, 2023

JOSEPH URBANSKI

President

Chief Executive Officer

CONTACT	FOR IMMEDIATE RELEASE	October 24, 2023
Stacy Merrifield
Investor Relations
260.463.7111
[e-mail]

FS Bancorp Reports September 30, 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 September 30, 2023.

FS Bancorp is pleased to report quarterly earnings for the quarter ending September 30, 2023. Net income for the quarter ended September 30, 2023 was $3.9 million compared to $4.3 million for the same quarter of 2022. Core earnings continued to be solid with net interest income remaining relatively stable in a volatile interest rate environment. Net interest income for the quarter ended September 30, 2023 was $8.7 million compared to $8.7 million for the quarter ended June 30, 2023. Net interest income for the nine months ended 2023 and 2022 were $26.0 and $26.3 million respectively. Highlights of the third quarter of 2023 included the following items:

• Total loans were $774 million at September 30, 2023 compared to $731 million at September 30, 2022.
• Total deposits were $1,027,517,000 at September 30, 2023 compared to $1,056,331,000 at September 30, 2022, which represents a 3% decrease. Total deposits include $69.5 million and $6.3 million of brokered deposits at September 30, 2023 and 2022, respectively. Noninterest-bearing demand deposits were $259.2 million at September 30, 2023 compared to $268.1 million at June 30, 2023.
• Total equity increased $11.1 million to $93.4 million at September 30, 2023 compared to September 30, 2022.
• Asset quality remains very good through the third quarter of 2023. Net charge-offs during the third quarter of 2023 totaled $13,000, and total delinquencies were 0.23% of loans at September 30, 2023.
• There may be changes to the Internal Revenue Services' (IRS) treatment of captive insurance subsidiaries. There may be future changes to our organizational structure as a result of actions taken by the IRS that may negatively impact earnings in the period the

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

www.GoFSB.com

change is enacted. Subsequent earnings of the Company are not expected to be materially impacted.

We are pleased to have solid earnings for the first nine months of 2023. 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

September 30, 2023 and 2022 (Unaudited)

	September 30,	September 30,
(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 4,286,713 and 4,297,676 shares outstanding 2023 and 2022

Paid-in capital Retained earnings

Net unrealized gains (losses) on securities

Less treasury stock, at cost; 477,191 and 466,228 shares 2023 and 2022

Total Shareholders' Equity

Total Liabilities and Shareholders' Equity

$	70,773	$	86,817
	261,762		291,483
	3,348		2,143
	774,871		730,635
	(7,161)		(6,721)
	767,710		723,914
	10,084		10,448
	18,225		18,897
	2,604		2,604
	18,016		17,241
$	1,152,522	$	1,153,547

$	259,205	$	292,133
	424,049		465,642
	181,297		192,925
	137,582		73,466
	25,384		32,165
	1,027,517		1,056,331
	4,894		7,432
	20,000		-
	6,685		7,464
	1,059,096		1,071,227

	149		149
	3,030		3,045
	124,897		114,013
	(25,231)		(25,973)
	(9,419)		(8,914)
	93,426		82,320
$	1,152,522	$	1,153,547

FS BANCORP

CONSOLIDATED STATEMENTS OF INCOME

For the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

		Three Months Ended		Nine Months Ended
(Dollars in thousands except earnings per share)		September 30,		September 30,
Interest Income		2023		2022		2023		2022
Interest and fees on loans	$	10,393	$	8,225	$	29,332	$	23,091
Interest on investment securities		1,447		1,476		4,479		4,247
Other interest and dividend income		807		346		2,595		580
Total Interest Income		12,647		10,047		36,406		27,918
Interest Expense
Interest on deposits		3,709		941		9,828		1,606
Interest on FHLB advances and other borrowings		197		1		550		2
Total Interest Expense		3,906		942		10,378		1,608
Net Interest Income		8,741		9,105		26,028		26,310
Credit loss expense -loans		144		60		192		160
Net Interest Income after Credit Loss Expense		8,597		9,045		25,836		26,150
Noninterest Income
Service charges on deposit accounts		488		573		1,541		1,518
Credit and debit card income		849		868		2,556		2,581
Mortgage banking		76		108		170		345
Gains and losses on securities		-		(42)		(224)		(42)
Other income		398		303		1,059		861
Total Noninterest Income		1,811		1,810		5,102		5,263
Noninterest Expenses
Salaries and employee benefits		3,181		3,174		9,819		9,452
Occupancy expense on premises, furniture and
equipment, net		485		482		1,482		1,490
Data processing expense		638		564		1,763		1,589
Advertising and marketing expense		149		131		413		405
Other expenses		1,375		1,354		4,223		3,681
Total Noninterest Expenses		5,828		5,705		17,700		16,617
Income Before Income Taxes		4,580		5,150		13,238		14,796
Income tax expense (benefit)		712		877		2,024		2,442
Net Income	$	3,868	$	4,273	$	11,214	$	12,354
Basic Earnings Per Share
$	0.90	$	1.00	$	2.61	$	2.86
Diluted Earnings Per Common Share	$	0.90	$	0.99	$	2.60	$	2.84