Slide 1: Investor Presentation
1ST SECURITY BANK FS BANCORR, INC. Investor Presentation August 20, 2013 Build a truly great place to work and bank. FSBW Vision Statement
Slide 2: Forward-looking statements
Certain matters discussed in this presentation 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,” “estima
Slide 3: Forward-looking statements (continued)
‘Any of the forward-looking statements that we make in this presentation 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 p
Slide 4: Agenda
Ist Agenda = History = Culture = Footprint = Financial Results = Lending Breakout = Business Plan = Questions and Answers
Slide 5: Bank History
Bank History > Founded in 1936 as a credit union. Operated as a credit union until 2004. > Converted toa state chartered mutual Isr erry savings bank on April 1, 2004, operating as 1st Security Bank of Washington. | > Converted toa stock savings bank on FS BANCORP INC. July 9, 2012. Holding company
Slide 6: Bank Culture
Ist Bank Culture = Vision: Build a truly great place to work and bank. = Mission: “Live our Core Values’ and ‘wow’ each other and our customers every day.” = Employ smart, driven, nice people = Emphasis on collaboration = Best idea wins = Jim Collins’ Good to Great lessons
Slide 7: Puget Sound Footprint
Puget Sound Footprint
Slide 8: Snohomish County Banks 2008 and Now
Snohomish County Banks 2008 and Now Headquartered in Snohomish Headquartered in Snohomish County: December 31, 2008 County: June 30, 2013 Frontier Bank® $4,099,493 Coastal Community Bank $397,281 Cascade Bank* $1,636,243 1st Security Bank $378,850 City Bank* $1,325,541 = UniBank $213,987 Golf Saving
Slide 9: Northwest Economy
1sT SECURITY BANK Northwest Economy FS BANCORP INC. Jobs, Jobs, Jobs. Limited supply of “in city” housing. Major employers include Boeing, Microsoft, Amazon, Starbucks, Costco, Google, Russell, and Nordstrom. Population growth, income growth, and housing affordability.
Slide 10: Financial History
Financial History Data prior to December 31, 2012 is reported for the Bank only. 6/30/2013 | 12/31/2012 | 12/31/2011 | 12/31/2010 | 12/31/2009 Net Loans $280,411 $274,949 $217,131 $230,822 $231,441 Total Assets $378,862 $359,030 $283,793 $292,334 $281,836 Total Deposits $300,913 $288,949 $246,418 $2
Slide 11: Income Statement
Income Statement Three Months Ended June 30, 2013 (Consolidated) Three Months Ended June 30, 2012 (Bank only) Interest Income $5,436 Interest Income $4,504 Interest Expense (512) Interest Expense (613) Net Interest Income (NII) 4,924 Net Interest Income (NII) 3,891 Provision for Loan Losses (600) Pr
Slide 12: Balance Sheet
B a | ance S h e et Numbers presented in thousands (00's) As of June 30, 2013 (Consolidated) As of June 30, 2012 (Bank Only) Cash and Cash Equivalents $16,413 Cash and Cash Equivalents $33,236 Securities AFS at Fair Value 44,186 Securities AFS at Fair Value 37,864 Loans Held for Sale 13,146 Loans He
Slide 13: Selected Financial Ratios
Selected Financial Ratios (Consolidated) (Consolidated) (Bank Only) 6/30/2013* | 12/31/2012* | 6/30/2012* Return on Average Assets 1.15% 1.22% 0.81% Net Interest Margin 5.47% 5.52% 5.39% Efficiency Ratio 71.33% 66.24% 76.64% Net Loans & Leases to Deposits 93.19% 95.15% 79.77% Non-Performing Assets t
Slide 14: Loan Diversification
Ist Loan Diversification Target Loan Mix Actual 6/30/2013 Actual 12/31/2012 Type Percentage of Gross Type Percentage of Gross Type Percentage of Gross Loans including HFS Loans including HFS Loans including HFS ‘Consumer 30% Consumer 40% Consumer 38% Lending Lending Lending ‘Commercial 30% Commercia
Slide 15: Consumer Lending
FS BANCORP INC. Consumer Lending Q2 2013 Highlights Q2 2013 Dealer Production by State * $121 million Outstandingincluding HFS * 40.66% Washington * $17.2 millionin Dealer Originations (Up 56% from * 36.90% Oregon comparable second quarter 2012) * 22.44% California * Average Yield of 8.95% in Q2, up
Slide 16: Home Lending
Home Lending 2013 Q2 Closings: $83.8 million ~ 100% Retail Originations - 2nd Quarter Purchase Closings: 55.3% = 2nd Quarter New Applications: $108.7 million Quarterly Closed Volume (000’s) YTD Closing by Type Qi 2012 a22012 032012 Qs2012 a12013 22013 AS40856 3% 22,327,890, 16% ‘Conventional Governm
Slide 17: Home Lending: Servicing and Margins
IsTSE Home Lending 2013 Servicing unpaid principal balance $195.7 million - Second quarter increase in servicing asset: $38.0 million ~ Book value for mortgage servicing rights: 89% - 3 Party market value of servicing rights: 1.03% - Weighted average coupon: 3.85% = ‘Margin onSoldLoans 2013 Q2 Margi
Slide 18: Commercial Business Lending
Commercial Business Lending 2013 Q2 Highlights 2013 Mortgage Warehouse Lines + $54.0 million outstanding as of 6/30/13 + Commitment decreased to $50.4 million from $58MM. * $101.8 million committed as of 6/30/13 quarter over quarter. + $22.8million in warehouse outstanding, down from + Outstanding b
Slide 19: Residential Construction Lending
FS BANCORP INC. Residential Construction Lending Portfolio Highlights * $18.9MM in 2013 Q2 Originations * $61.6 million Committed as of 6/30/13 + $40.5 million Outstandingas of 6/30/13 * 6.62% Average Interest Rate * 88% of Originations in King County since the start of the Residential Construction
Slide 20: Non Performing Loans and OREO
IsT FS BANCORB INC. Non Performing Loans and OREO $7,000 $6000 $5,000 +400 @Nonaccrual Loans mxo $3,000 $2000 $1000 so wysy2o3/syz12 6/80/2012 sfsH/z12—z/SY/AI2- 5/84/2013 _6/30/2013, Numbers reported in thousands (00's)
Slide 21: Deposit Trends
1ST SECURITY BANK FS BANCORE INC. Deposit Trends As of June 30, 2013 (Consolidated) As of June 30, 2012 (Bank Only) mMMoa/Savings mchecking mMMDA/Sovings checking co's lesethan $250,000 sm CO’sgreaterthan $250,000 ‘CO's les than $250,000 1 O's greaterthan $250,000 $23,840 8% $22,978 8% Numbers repor
Slide 22: Business Plan
Business Plan = Growing and diversifying our loan portfolio = Maintaining and improving asset quality = Emphasizing lower cost core deposits to reduce the costs of funding our loan growth = Capturing our customers’ full relationship by offering a wide range of products and services = Expanding our r
Slide 23: Capital Management Strategy
Capital Management Strategy Primary deployment through organic asset growth Paid first dividend in Q2 of 2013. Declared second quarterly cash dividend of 5 cents per share for shareholders of record on August 15, 2013 and payable on August 30, 2013 $12 million in cash held at FS Bancorp, Inc. as of
Slide 24: Contact Information
Contact Information Joseph C. Adams Matthew D. Mullet joea@fsbwa.com mattm@fsbwa.com Chief Executive Officer Chief Financial Officer 425-697-8048 425-697-8026 6920 220" Street Southwest Mountlake Terrace, Washington 98043