Attached files

file filename
8-K - FS BANCORP, INC. FORM 8-K - FS Bancorp, Inc.fs8k13013.htm
Exhibit 99.1
 
Contact:   Joseph C. Adams,
Chief Executive Officer
      Matthew D. Mullet,
Chief Financial Officer
                      (425) 771-5299
                      www.FSBWA.com

FS Bancorp, Inc. Reports Net Income For the Fourth Quarter of $1.1 Million or $0.36 Per Share and
$5.3 Million or $1.76 Per Share For the Year Ended December 31, 2012

MOUNTLAKE TERRACE, WA – January 30, 2013 - FS Bancorp, Inc. (NASDAQ: FSBW) (“FS Bancorp” or “the Company”), the holding company for 1st Security Bank of Washington (“the Bank”) today reported 2012 fourth quarter net income of $1.1 million,  or $0.36 per diluted share, compared to $312,000 for the fourth quarter ended December 31, 2011.  The 2012 fourth quarter net income of $1.1 million compares to $3.3 million for the third quarter of 2012 which included a $2.3 million reversal of the valuation allowance for the deferred tax asset.  Net income for the year ended December 31, 2012 was $5.3 million including the $2.3 million reversal of the valuation allowance for the deferred tax asset compared to net income of $1.5 million for the year ended December 31, 2011.  The Company completed its initial public offering on July 9, 2012 with the issuance of 3,240,125 shares of its common stock, which generated gross proceeds of $32.4 million; therefore, operating results before that date are for the Bank only.

“The focus on the successful implementation of the business plan has allowed the Bank to invest in an expanded infrastructure and also, at the same time, continue to increase earnings,” stated Joe Adams, CEO of the Company and the Bank.  “The Board is pleased with the diversified revenue streams that include expanded business lending, construction lending, and home lending to complement our strength in consumer lending.”

As previously disclosed in the third quarter Form 10-Q, the Company completed the sale of 366 consumer marine loans on December 14, 2012 that had an aggregate principal balance of $12.6 million.  In connection with the sale, a $67,000 reserve for potential loan recourse was established and will remain in effect until June 12, 2013.  The sale of marine loans resulted in a pre-tax gain of $115,000, net of the reserve.  The primary purpose in selling these consumer loans was to enable the Company to continue to diversify its balance sheet and manage interest rate risk.

 2012 Fourth Quarter and Year End Highlights

·  
Net income decreased to $1.1 million compared to $3.3 million (including a $2.3 million reversal of the valuation allowance for the deferred tax asset) in the preceding quarter of 2012, and increased from $312,000 for the comparable quarter one year ago;
·  
Net income increased to $5.3 million for the year ended December 31, 2012 compared to $1.5 million for the year ended December 31, 2011;
·  
Earnings per diluted share were $0.36 for the fourth quarter 2012 compared to $1.03 for the prior quarter;
·  
Net interest margin increased to 5.52% compared to 5.39% for the preceding quarter and increased from  5.20% for the comparable quarter one year ago;
·  
Originations were $23.9 million and $64.2 million of construction and one-to-four family residential loans, respectively, during the quarter compared to $14.0 million and $44.2 million in the prior quarter;
·  
Total non-performing assets decreased $376,000, or 8.5% to $4.1 million at December 31, 2012 compared to $4.4 million at September 30, 2012 and $6.9 million at December 31, 2011;
·  
The ratio of non-performing assets to total assets improved to 1.1% at December 31, 2012 compared to 1.3% at September 30, 2012 and 2.4% at December 31, 2011; and
·  
Capital levels at the Bank reflect Total Risk-Based Capital of 16.0% and a Tier 1 Leverage Capital Ratio of 13.3% as of December 31, 2012 compared to 12.3% and 9.3% as of December 31, 2011, respectively.

 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 2
 
Balance Sheet and Credit Quality

Total assets increased to $359.0 million at December 31, 2012 compared to $341.2 million at September 30, 2012 and $283.8 million at December 31, 2011.  The increase in total assets from September 30, 2012 was primarily due to increases in net loans receivable of $15.8 million, and securities available-for-sale of $4.5 million offset by a $2.8 million decrease in total cash and cash equivalents.  The increase in assets from December 31, 2011 was primarily due to increases in net loans receivable of $57.8 million, securities of $16.4 million and loans held for sale of $8.9 million offset by a $9.8 million decrease in total cash and cash equivalents.

Net loans receivable increased $15.8 million to $275.0 million at December 31, 2012 from $259.2 million as of September 30, 2012 and increased $57.8 million from $217.1 million at December 31, 2011.  Total real estate loans increased $14.1 million quarter over quarter due to increased growth in commercial real estate loans including residential construction lending.  Quarter over quarter increases in other loan categories include a $12.0 million increase in commercial business loans including warehouse lending offset by a $9.5 million reduction in consumer loans associated with the marine loan sale.


LOAN PORTFOLIO                  
($ in thousands)
                 
   
December 31, 2012
   
September 30, 2012
   
December 31, 2011
 
   
Amount
   
Percent
   
Amount
   
Percent
   
Amount
   
Percent
 
                                     
REAL ESTATE LOANS
                                   
   Commercial
  $ 33,250       11.9 %   $ 32,779       12.5 %   $ 28,931       13.1 %
   Home equity
    15,474       5.5       14,693       5.6       14,507       6.6  
   Construction and development
    31,893       11.4       24,480       9.3       10,144       4.6  
   One-to-four family (held for sale
      excluded)
    13,976       5.0       10,340       3.9       8,752       4.0  
   Multi-family
    3,202       1.2       1,397       0.5       1,175       0.5  
Total real estate loans
    97,795       35.0       83,689       31.8       63,509       28.8  
                                                 
CONSUMER LOANS:
                                               
   Indirect home improvement
    86,249       30.8       82,185       31.2       81,143       36.7  
   Recreational
    17,968       6.4       30,773       11.7       24,471       11.1  
   Automobile
    2,416       0.9       3,057       1.2       5,832       2.6  
   Home improvement
    651       0.2       721       0.3       934       0.4  
   Other
    1,386       0.5       1,430       0.5       1,826       0.8  
Total consumer loans
    108,670       38.8       118,166       44.9       114,206       51.6  
                                                 
COMMERCIAL BUSINESS LOANS
    73,465       26.2       61,488       23.3       43,337       19.6  
                Total loans
    279,930       100.0 %     263,343       100.0 %     221,052       100.0 %
                                                 
Allowance for loan losses
    (4,698 )             (4,359 )             (4,345 )        
Deferred cost, fees, and discounts, net
    (283 )             173               424          
       Total loans receivable, net
  $ 274,949             $ 259,157             $ 217,131          


Originations of loans held for sale increased 43.9% to $61.5 million during the quarter ended December 31, 2012 compared to $42.8 million for the preceding quarter.  Loans held for sale increased $359,000 to $8.9 million at December 31, 2012 from $8.5 million at September 30, 2012 and none at December 31, 2011.  The Bank continues to expand home lending operations and to sell fixed-rate one-to-four family mortgage loans into the secondary market for asset/liability management purposes and to generate noninterest income.  During the quarter ended
 
 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 3
 
December 31, 2012, the Bank sold $61.4 million of fixed-rate, one-to-four family mortgage loans compared to $38.3 million for the preceding quarter and none for the same quarter one year ago.

The allowance for loan losses at December 31, 2012 was $4.7 million, or 1.7% of gross loans receivable, compared to $4.4 million or 1.7% of gross loans receivable as of September 30, 2012 and $4.3 million, or 2.0% of gross loans receivable at December 31, 2011.  Non-performing loans, consisting of non-accrual loans, decreased to $1.9 million at December 31, 2012 from $2.1 million at September 30, 2012 and $2.2 million at December 31, 2011.    Other real estate owned totaled $2.1 million at December 31, 2012, compared to $2.3 million at September 30, 2012 and $4.6 million at December 31, 2011.  The $2.5 million or 53.7% reduction in other real estate owned year over year reflects the sale of $2.6 million in other real estate owned and write-downs to fair value of $812,000 during the year ended December 31, 2012.  At December 31, 2012, the Bank also had $3.3 million in restructured loans of which $2.4 million were performing in accordance with their modified terms and $892,000 were on non-accrual.

Total deposits increased $14.1 million or 5.1% to $288.9 million at December 31, 2012, from $274.8 million at September 30, 2012.  Transaction accounts (noninterest and interest-bearing checking accounts) increased to $58.5 million as of December 31, 2012 from $56.3 million at September 30, 2012 and $39.9 million at December 31, 2011.  Management continues to focus deposit growth efforts on relationship deposits with new and existing customers.
 
 
DEPOSIT BREAKDOWN
($ in thousands)
 
   
December 31, 2012
   
September 30, 2012
   
December 31, 2011
 
   
Amount
   
Percent
   
Amount
   
Percent
   
Amount
   
Percent
 
Interest-bearing checking
  $ 24,349       8.4 %   $ 24,914       9.1 %   $ 20,669       8.4 %
Noninterest-bearing checking
    34,165       11.8       31,434       11.4       19,254       7.8  
Savings
    11,812       4.1       12,146       4.4       11,567       4.7  
Money market
    114,245       39.5       108,643       39.5       99,022       40.2  
Certificates of deposits less than
   $100,000
     40,119        13.9        39,835        14.5        36,220        14.7  
Certificates of deposits $100,000
   to less than $250,000
     43,810        15.2        33,283        12.1        36,912        15.0  
Certificates of deposits $250,000
    and over
     20,449        7.1        24,569        9.0        22,774        9.2  
    Total
  $ 288,949       100.0 %   $ 274,824       100.0 %   $ 246,418       100.0 %


Total equity increased $525,000 to $59.9 million at December 31, 2012 from $59.4 million at September 30, 2012.  The increase in equity from the third quarter was predominantly a result of net income of $1.1 million and the scheduled payment of the Employee Stock Ownership Plan loan partially offset by a decline in the unrealized gain on securities available-for-sale included in accumulated other comprehensive income.  Book value per common share was $19.92 as of December 31, 2012.

The Bank is well capitalized with a Total Risk-Based Capital ratio of 16.0% and a Tier 1 Leverage Capital ratio of 13.3% at December 31, 2012.  The Company reflects Total Risk-Based Capital and Tier 1 Leverage Capital ratios of 19.8% and 16.7%, respectively, as of December 31, 2012.

Operating Results

Net interest income before the provision for loan losses increased $1.1 million, or 32.2%, to $4.6 million for the three months ended December 31, 2012, from $3.5 million for the three months ended December 31, 2011.   For the year ended December 31, 2012, net interest income, before the provision for loan losses, increased $3.0 million, or 21.9%, to $16.4 million compared to $13.5 million for the same period in the prior year.
 
 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 4
 
The net interest margin increased 24 basis points to 5.43% for the year ended December 31, 2012, from 5.19% for the same period of the prior year. The increase was primarily due to a shift in assets during the period from lower yielding cash and cash equivalents into higher yielding loans and investment securities and a lower level of non-performing loans, coupled with a 37 basis point decline in the cost of funds to 0.94% for the year ended December 31, 2012 from 1.31% for the same period in the prior year.

The provision for loan losses was $1.2 million for the three months ended December 31, 2012, compared to $717,000 for the three months ended December 31, 2011.  The $501,000 increase in the provision primarily relates to the increase in net new loans during the three months ended December 31, 2012.  The provision for loan losses increased $544,000 to $2.9 million for the year ended December 31, 2012, from $2.4 million for the year ended December 31, 2011.  Non-performing loans were $1.9 million, or 0.7% of total loans at December 31, 2012, compared to $2.2 million, or 1.0% of total loans, at December 31, 2011.  During the year ended December 31, 2012, net charge-offs totaled $2.6 million compared to $3.9 million during the year ended December 31, 2011.

Noninterest income increased $2.1 million, or 268.8%, to $2.8 million for the three months ended December 31, 2012, from $770,000 for the three months ended December 31, 2011.  The increase during the period was primarily due to $2.1 million in gains associated with the sale of mortgage loans to the secondary market as part of the home lending initiative.  Noninterest income increased $3.7 million, or 149.1%, to $6.2 million for the year ended December 31, 2012, from $2.5 million for the year ended December 31, 2011.

Noninterest expense increased $1.7 million, or 52.7%, to $4.9 million for the three months ended December 31, 2012, from $3.2 million for the three months ended December 31, 2011.  Changes in noninterest expense included a $1.3 million, or 88.3%, increase in salaries and benefit costs associated with the addition of more lending staff, a $268,000 or 53.5% increase in operation costs partially due to a $108,000 increase in off-balance sheet reserves including a reserve for the marine loan sale, a $215,000, or 210.8% increase in loan costs associated with increased lending activities, partially offset by a $151,000 decrease in write-downs to fair value of other real estate owned.
 
About FS Bancorp
FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington.  The Bank provides loan and deposit services to customers who are predominately small and middle-market businesses and individuals in western Washington through its six branches in suburban communities in the greater Puget Sound area.

Disclaimer
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact and often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.”  Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future performance.  These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated, including, but not limited to: general economic conditions, either nationally or in our market area, that are worse than expected; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market area; increases in premiums for deposit insurance; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments; increased competitive pressures among financial services companies; our ability to execute our plans to grow our residential construction lending, our mortgage banking operations and our warehouse lending and the geographic expansion of our indirect home improvement lending; our ability to attract and retain deposits; our ability to control operating costs and expenses; changes in consumer spending, borrowing and savings habits; our ability to successfully manage our growth; legislative or regulatory changes that adversely affect our business or increase capital requirements, including changes related
 
 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 5
 
to Basel III; the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing regulations, changes in regulation policies and principles, or the interpretation of regulatory capital or other rules; adverse changes in the securities markets; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board; costs and effects of litigation, including settlements and judgments and inability of key third-party vendors to perform their obligations to us.

Any of the forward-looking statements that we make in this press release and in the other public statements we make are based upon management’s beliefs and assumptions at the time they are made.  We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise.  We caution readers not to place undue reliance on any forward-looking statements.  We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.  These risks could cause our actual results for fiscal 2013 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us, and could negatively affect the Company’s operations and stock price performance.








 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 6

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)

   
December 31,
   
September 30,
   
December 31,
 
   
2012
   
2012
   
2011
 
   
Unaudited
   
Unaudited
   
Unaudited
 
ASSETS
                 
Cash and due from banks
  $ 4,003     $ 2,441     $ 2,356  
Interest-bearing deposits at other financial institutions
    5,410       9,736       16,897  
Total cash and cash equivalents
    9,413       12,177       19,253  
Securities available-for-sale, at fair value
    43,313       38,794       26,899  
Federal Home Loan Bank stock, at cost
    1,765       1,781       1,797  
Loans held for sale
    8,870       8,511       --  
Loans receivable, net
    274,949       259,157       217,131  
Accrued interest receivable
    1,223       1,283       1,020  
Premises and equipment, net
    12,663       12,448       9,852  
Other real estate owned
    2,127       2,321       4,589  
Deferred tax asset
    1,927       2,688       --  
Other assets
    2,780       2,053       3,252  
TOTAL ASSETS
  $ 359,030     $ 341,213     $ 283,793  
                         
LIABILITIES
                       
Deposits
                       
Interest-bearing accounts
  $ 254,784     $ 243,390     $ 227,164  
Noninterest-bearing accounts
    34,165       31,434       19,254  
Total deposits
    288,949       274,824       246,418  
Borrowings
    6,840       4,100       8,900  
Other liabilities
    3,344       2,917       1,708  
Total liabilities
    299,133       281,841       257,026  
COMMITMENTS AND CONTINGENCIES
                       
EQUITY
                       
         Preferred stock, $.01 par value; 5,000,000 shares authorized; 
             None issued
    --       --       --  
         Common stock, $.01 par value; 45,000,000 shares authorized; 
    3,240,125 shares issued and 3,006,836 outstanding at
    December 31, 2012, and 3,240,125 shares issued and
    outstanding at September 30, 2012, and none at December
    31, 2011
     32       32       --  
Additional paid-in capital
    29,894       29,863       --  
Retained earnings
    31,746       30,674       26,451  
Accumulated other comprehensive income
    597       1,439       316  
Unearned shares - Employee Stock Ownership Plan
    (2,372 )     (2,636 )     --  
Total equity
    59,897       59,372       26,767  
TOTAL LIABILITIES AND EQUITY
  $ 359,030     $ 341,213     $ 283,793  

 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 7

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)

   
Three Months Ended
December 31,
   
Year Ended
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
INTEREST INCOME
                       
Loans receivable
 
$
4,936
   
$
4,060
   
$
18,057
   
$
16,191
 
Interest and dividends on investment
   securities, and cash and cash equivalents
   
209
     
111
     
730
     
287
 
Total interest income
   
5,145
     
4,171
     
18,787
     
16,478
 
INTEREST EXPENSE
                               
Deposits
   
493
     
632
     
2,208
     
2,826
 
Borrowings
   
37
     
47
     
155
     
180
 
Total interest expense
   
530
     
679
     
2,363
     
3,006
 
NET INTEREST INCOME
   
4,615
     
3,492
     
16,424
     
13,472
 
PROVISION FOR LOAN LOSSES
   
1,218
     
717
     
2,913
     
2,369
 
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
   
3,397
     
2,775
     
13,511
     
11,103
 
NONINTEREST INCOME
                               
Service charges and fee income
   
500
     
521
     
1,993
     
1,971
 
Gain on sale of loans
   
2,218
     
113
     
3,684
     
113
 
Gain on sale of equipment
   
--
     
41
     
--
     
41
 
Gain on sale of investment securities
   
59
     
--
     
165
     
18
 
Other noninterest income
   
63
     
95
     
322
     
332
 
Total noninterest income
   
2,840
     
770
     
6,164
     
2,475
 
NONINTEREST EXPENSE
                               
Salaries and benefits
   
2,772
     
1,472
     
8,495
     
5,616
 
Operations
   
769
     
501
     
2,530
     
1,949
 
Occupancy
   
343
     
286
     
1,232
     
1,103
 
Data processing
   
293
     
239
     
1,055
     
890
 
OREO fair value write-downs, net of (gain)
    loss on sales
   
119
     
270
     
847
     
601
 
OREO expenses, net
   
29
     
(15
)
   
184
     
138
 
Loan costs
   
317
     
102
     
867
     
459
 
Professional and board fees
   
136
     
243
     
618
     
631
 
FDIC insurance
   
72
     
61
     
257
     
391
 
Marketing and advertising
   
81
     
55
     
280
     
236
 
Impairment of mortgage servicing
   rights
   
7
     
19
     
112
     
19
 
Total noninterest expense
   
4,938
     
3,233
     
16,477
     
12,033
 
INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAX
   
1,299
     
312
     
3,198
     
1,545
 
(BENEFIT) PROVISION FOR INCOME TAX
   
226
     
--
     
(2,097)
     
--
 
NET INCOME
 
$
1,073
   
$
312
   
$
5,295
   
$
1,545
 
 
(Table continues on following page)

 
 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 8
 
   
Three Months Ended
December 31,
   
Year Ended
December 31,
   
2012
   
2011
   
2012
 
2011
                           
Net income per common share:
                         
    Basic
 
$
0.36
     
nm(1)
   
$
1.76
 
nm(1)
    Diluted
 
$
0.36
     
nm(1)
   
$
1.76
 
nm(1)
                           
                           
                           
                           
Weighted average common shares outstanding:
                         
    Basic
   
3,006,836
     
nm(1)
     
3,006,836
 
nm(1)
    Diluted
   
3,006,836
     
nm(1)
     
3,006,836
 
nm(1)
___________
(1)
Earnings per share and share calculations are not meaningful as the Company completed the stock offering on July 9, 2012.


 
 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 9

 
KEY FINANCIAL RATIOS AND DATA
 
Three Months Ended
 
($ in thousands, except per share amounts) (Unaudited)
 
December 31,
   
September 30,
   
December 31,
 
   
2012
   
2012
   
2011
 
                   
PERFORMANCE RATIOS:
                 
  Return on assets (ratio of net income to average total assets) (2)
    1.22 %     3.93 %     0.44 %
  Return on equity (ratio of net income to average equity) (2)
    7.13       26.17       4.66  
  Yield on average interest-earning assets
    6.15       6.11       6.22  
  Rate paid on average interest-bearing liabilities
    0.82       0.89       1.15  
  Interest rate spread information:
                       
    Average during period
    5.33       5.22       5.07  
  Net interest margin (2)
    5.52       5.39       5.20  
  Operating expense to average total assets
    5.61       4.87       4.56  
  Average interest-earning assets to average interest-bearing liabilities
    129.30       123.60       113.50  
  Efficiency ratio (3)
    66.24       71.61       75.86  
                         

   
 Year Ended
 
     
December 31,
     
December 31,
 
     
2012
     
2011
 
PERFORMANCE RATIOS:
             
  Return on assets (ratio of net income to average total assets) (2)
 
1.64
%
   
0.56
%
  Return on equity (ratio of net income to average equity) (2)
 
          12.71
     
          5.92
 
    Yield on average interest-earning assets
 
            6.21
     
          6.35
 
  Rate paid on average interest-bearing liabilities
 
            0.94
     
          1.31
 
  Interest rate spread information:
             
    Average during period
 
            5.27
     
          5.04
 
  Net interest margin (2)
 
            5.43
     
          5.19
 
  Operating expense to average total assets
 
            5.12
     
          4.35
 
  Average interest-earning assets to average interest-bearing liabilities
 
           120.34
     
         112.90
 
  Efficiency ratio (3)
 
             72.95
     
           75.46
 
               

   
December 31,
   
September 30,
   
December 31,
 
   
2012
   
2012
   
2011
 
ASSET QUALITY RATIOS AND DATA:
                 
  Non-performing assets to total assets at end of period (4)
    1.13
%
    1.30
%
    2.43
%
  Non-performing loans to total gross loans (5)
    0.68       0.80       1.01  
  Allowance for loan losses to non-performing loans (5)
    246.48       208.17       195.11  
  Allowance for loan losses to gross loans receivable
    1.68       1.66       1.97  
                         
                         
CAPITAL RATIOS, BANK ONLY:
                       
 Tier 1 Leverage Capital
    13.26
%
    13.22
%
    9.30
%
 Tier 1 Risk-Based Capital
    14.75       15.82       11.04  
 Total Risk-Based Capital
    16.00       17.07       12.29  
                         
CAPITAL RATIOS, COMPANY, ONLY:
                       
 Tier 1 Leverage Capital
    16.66
%
    16.82
%
 
nm
 
 Total  Risk-Based Capital
    19.82       21.21    
nm
 
                         
                         
BOOK VALUES:
                       
 Book value per common share
  $ 19.92
(7)
  $ 18.32
(6)
 
nm
(1)
 
                       

(Footnotes on following page)
 
 
 

 
FS Bancorp Q4 Earnings
January 30, 2013
Page 10
 
________________________________________________
(1)
Earnings per share calculation are not meaningful as the Company became a public company on July 9, 2012.
(2)
Annualized.
(3)
Total noninterest expense as a percentage of net interest income and total other noninterest income.
(4)
Non-performing assets consists of non-performing loans (which include non-accruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets.
(5)
Non-performing loans consists of non-accruing loans and accruing loans more than 90 days past due.
(6)
Book value per common share was calculated using all shares outstanding of 3,240,125 at September 30, 2012.
(7)
Book value per common share was calculated using shares outstanding of 3,006,836 at December 31, 2012.