Fs Bancorp, Inc. · NASDAQ:FSBW
Fs Bancorp — Investor Presentation (March 2013)
29 slides from Fs Bancorp's investor presentation, Mar 11, 2013
Slide 1: Investor Presentation
1ST SECURITY BANK FS BANCORP INC. Investor Presentation March 1, 2013 Build a truly great place to work and bank. FSBW Vision Statement
Slide 2: Forward-looking statements
matters discussed in this presentation may contain forward-looking statements withi n Reform Act of 1995. Forward-looking statements are not statements of the words “believes,” “expects,” “anticipates,” “ “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or
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 pr
Slide 4: Agenda
Agenda = History = Culture = Footprint = Financial Results = Lending Breakout = Business Plan = Questions and Answers
Slide 5: Bank History
Bank History mews > Vv Founded in 1936 as a credit union. ] Operated as a credit union until 2004. 1ST SECURITY Converted to a state chartered mutual BANK savings bank on April 1, 2004, operating as | 1st Security Bank of Washington. Y ihe FS BANCORP INC. Converted to a stock savings bank on July 9,
Slide 6: Bank Culture
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.” = Business Philosophy = Emphasis on collaboration = Best idea wins = Jim Collins’ Good to Great lessons
Slide 7: First Who... then What
Fi rst Who... then What Get the right people on the bus (the right people don’t need to be Henly managed, they are self-motivated and want to build something great) Get the wrong people off the bus (with the wrong people, it does not matter if you discover the right direction, you still won’t build
Slide 8: Management team
Joe Adams, CEO. Joined 2003. Member of the Board of Directors and 9 years at the bank/credit union. Prior to joining the bank, Mr. Adams practiced law from 1985 to 2003. Drew Ness, COO. Joined 2008. Over 20 years of banking experience. Previously Mr. Ness served as First Mutual Bank’s Vice President
Slide 9: 1st Security Bank Footprint
1st Security Bank Footprint Poulsbo § = Poulsbo Home Lending &® Edmonds ; Lynnwood Capitol Hill Branch o projected grand g opening Spring 2013. Canyon Park@ Overlake @ | Puyallupi "Administrative Offices Cf) Bellevue Home Lending
Slide 10: Snohomish County 2008 and Now
Snohomish County 2008 and Now Headquartered in Snohomish Headquartered in Snohomish County: December 31, 2008 County: December 31, 2012 Frontier Bank* $4,099,493 Coastal Community Bank $370,715 Cascade Bank* $1,636,243 Ast Security Bank $359,055 City Bank* $1,325,541 = - UniBank $187,896 Golf Saving
Slide 11: Northwest Economy
= Jobs, Jobs, Jobs. = Housing and Home Building. Northwest Economy = Major employers include Boeing, Microsoft, Amazon, Starbucks, Costco, Google, Russell, and Nordstrom. = Population growth, income growth, and housing affordability. 1
Slide 12: Financial History
Financial History Data prior to December 31, 2012 is reported for the Bank only. 12/31/2012 | 12/31/2011 | 12/31/2010 | 12/31/2009 | 12/31/2008 Net Loans $274,949 $217,131 $230,822 $231,441 $222,974 Total Assets $359,030 $283,793 $292,334 $281,836 $255,368 Total Deposits $288,949 $246,418 $243,957 $
Slide 13: Income Statement
Income Statement Twelve months ended December 31, 2012 (Consolidated) Twelve months ended December 31, 2011 (Bank only) Interest Income $18,787 Interest Income $16,478 Interest Expense (2,363) Interest Expense (3,006) Net Interest Income 16,424 Net Interest Income 13,472 Provision for Loan Losses (2
Slide 14: Balance Sheet
Balance Sheet As of December 31, 2012 (Consolidated) Numbers presented in thousands (000’s) As of December 31, 2011 (Bank Only) Cash and Cash Equivalents $9,413 Cash and Cash Equivalents $19,253 Securities AFS at Fair Value 45,078 Securities AFS at Fair Value 28,696 Loans Held for Sale 8,870 Loans H
Slide 15: Selected Bank Only Financial Ratios
Selected Bank Only Financial Ratios 12/31/2012 12/31/2011 12/31/2010 Return on Average Assets 1.64% 0.56% 0.59% Net Interest Margin 5.53% 5.26% 5.33% Efficiency Ratio 70.97% 73.84% 69.86% Net Loans & Leases to Deposits 93.94% 87.55% 93.92% Non-Curr LNS+OREO to LNStOREO 1.39% 3.03% 4.18% ALLL/Total L
Slide 16: Loan Diversification
Loan Diversification Target Loan Mix Actual 12/31/2012 Actual 12/31/2011 Type Percentage of Gross Type Percentage of Gross Type Percentage of Gross Loans including HFS Loans including HFS Loans including HFS Consumer 30% Consumer 38% Consumer 52% Lending Lending Lending Commercial 30% Commercial 24%
Slide 17: Loan Portfolio Composition
FS BANCORP INC. Loan Portfolio Composition As of December 31, 2012 (Consolidated) As of December 31, 2011 (Bank Only) 1-4 Family Real Estate L¢ of] re Loans’ 1-4 Family Real = Commercial Real Estate Loans* ee oats = Commercial Real "Estate = Consumer Loans sete = Consumer Loans | Commercial i m= Com
Slide 18: Organic Loan Growth
Organic Loan Growth Diversify the network of indirect consumer dealers and consumer products Niche residential construction lending Loan officer originated home loans Business lending including warehouse lending Commercial real estate lending with an emphasis on bank customer cross sell Retail bank
Slide 19: Consumer Lending
Consumer Lending 2012 Portfolio Highlights 2012 Production by State + $108.7MM Outstandingas of 12/31/12 * 63.8% Washington * $43.9MM in Originations (Up 67% YOY) * 30.1% Oregon * $12.6MM of Marine Sold in 2012 * 6.1% California * Top 10 Dealers accounted for $21.7MM (51.4%) of loan originations in
Slide 20: Commercial Business Lending
Commercial Business Lending 2012 Portfolio Highlights 2012 Mortgage Warehouse Line Increase + $73.5MM Outstanding as of 12/31/12 (Up 70% YOY) * Commitments increased from $35MM to $58MM YOY + $98.3MM Commitments as of 12/31/12 (Up 45% YOY) * Outstanding balances at year end increased from * $38.9MM
Slide 21: Home Lending
Home Lending 2012 Total Closings: $145.7MM - Ath Quarter Closings: S65MM - 4th Quarter Average Purchase Percentage: 29% - Ath Quarter New Applications: $73 MM - 27% of all applications were bank referred Opened the Bellevue Production Office Poulsbo Production Office opened in the first quarter of 2
Slide 22: Home Lending
Home Lending 2012 Servicing unpaid principal balance $128.6MM - Fourth quarter increase in servicing asset: $39.6MM - Mortgage servicing rights value : .80% - Sub-servicing with private label servicer 2012 Margins on loan sales: 2.47% - Fourth quarter margins: 2.86% 22
Slide 23: Residential Construction Lending
Residential Construction Lending Portfolio Highlights * $1.28MM in 2012 Fees Charged « $56.6MM Committed as of 12/31/12 * $28.7MM Outstandingas of 12/31/12 $67.3MM in 2012 Originations $21.3MM Loan Payoffs in 2012 6.90% Average Interest Rate 67% Average Loan-To-Value 87% Average Loan-To-Cost 89% in
Slide 24: Revenue Growth: Outpacing Expenses
Revenue Growth: Outpacing Expenses $25,000 $20,000 $15,000 $10,000 $5,000 s Non interest Expense | | | 7 2008 2008 2010 2011 2012 Numbers in thousands (000’s) 24
Slide 25: Non Accrual Loans
Non Accrual Loans oy / M31-Dec-1l 30-Sep-12 m31-Dec-12 Repo'd Property Numbers reported in thousands (000's) 25
Slide 26: Retail Deposits: Relationship Focused
Retail Deposits: Relationship Focused Strategy to expand the share of current customers wallets. Average balance per account increased from $14.8k to $19.5k in 2012 Total Business Account Balances Total Checking Account Balances $90,000 $70,000 $80,000 $60,000 $70,000 $60,000 $50,000 $50,000 $40,000
Slide 27: Deposit Trends
FS BANCORB INC. Deposit Trends As of December 31, 2012 (Consolidated) As of December 31, 2011 (Bank Only) checking MLMMDA and Savings checking MLMMDA and Savings = CD's less than $250,000 = CO's $250,000+ = CD's less than $250,000 = CO's $250,000+ $22,774 Numbers reported Numbers reported in (000's)
Slide 28: Business Plan Summary
Business Plan Summary 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 rea
Slide 29: 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