Fs Bancorp, Inc. · NASDAQ:FSBW
Fs Bancorp — Investor Presentation (September 2015)
30 slides from Fs Bancorp's investor presentation, Sep 3, 2015
Slide 1: Investor Presentation
1ST SECURITY BANK FS BANCORR, INC. Investor Presentation September 35 2015 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,” “estim
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 = Branch Transaction = Footprint = Financial Results = Lending Breakout = Business Plan = Questions and Answers
Slide 5: History
History >» Founded in 1936 as a credit union. Operated as a credit union until 2004. > Converted toa state chartered mutual 1sT SECURITY savings bank on April 1, 2004, operating as BANK 1st Security Bank of Washington. | > Converted to a stock savings bank on July 9, 2012. Holding company under the
Slide 6: Culture
Ist 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: Transaction Terms and Assumptions
1ST SECURITY BANK FS BANCORB INC. Transaction Terms and Assumptions * Four Branches (including ATMs) located on the Olympic Peninsula Purchase Summ: * Clallam County and Jefferson County * 1stSecurity Bank to assume all Branch staff and related overhead expense Est. Deposits Assumed * Approximately
Slide 8: Pro Forma Deposit Composition
1sT SECURITY BANK FS BANCORP INC. Pro Forma Deposit Composition Ast Security Bank Acquired Branches Pro Forma Source: sNt Finca ransocionassumpsions "Note: 15 Security Bork deposits efectreporced bork evel repute dot oof Je 30, 2015
Slide 9: Strategic Rationale
Strategic Rationale Financial Impact Additional Considerations Attractive low cost core funding Expands branch network along the Olymy * Clallam County and Jefferson County Immediately accretive to EPS Tangible book value di Improves funding mix Enhances scale: pro forma total assets will exceed $80
Slide 10: Footprint: Branch and Home Lending Locations
Administrative Center {GD Bellevue Home Lending Mill Creek Home Lending Millcreek Ba Mil Creek ist Capito! Hill Port Orchard Home Lending BD pyyaliun © Puyatup Home Lending GD Tee-cities Home Lending 10
Slide 11: 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, 2015 Frontier Bank® $4,099,493 Coastal Community Bank $589,361 Cascade Bank* $1,636,243 1st Security Bank $566,310 City Bank* $1,325,541 = UniBank $237,055 Golf Saving
Slide 12: Washington Peer Comparison Banks
Washington Peer Comparison Banks Tier1 YTD Leverage | Noncurrent ALLL to Gross Capital | ROAA* Ratio* |LNS+OREO/ | Loans and Leases (000’s) | Loans+OREO* | not HFS* 1st Security Bank $60,655 1.82% 10.91% 0.21% 1.55% Sound Community $50,264 1.04% 10.21% 0.31% 1.05% Puget Sound Bank $51,684 0.98% 12.9
Slide 13: Recent Recognition: Washington's Top Banks
1sT SECURITY BANK FS BANCORB INC. Recent BUSINESS JOURNAL WASHINGTON'S TOP BANKS: a . Things have improved dramatically since the failure of WaMu ERE ARE MIS RANKINGS FOR THE TOP: INWASHINGTON STATE 1 ts Securty Hank of Washington, Mount ce, Ast: $50 millon eT" 2 Cashmere Vay Bank, Cashmere, As
Slide 14: Northwest Economy
1sT SECURITY BANK Northwest Economy FS BANCORR INC. Employment. 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 15: Financial History
Financial History Data at December 31, 2011 is reported for the Bank only. Numbers presented in thousands (000's) 06/30/2015 | 12/31/2014 | 12/31/2013 | 12/31/2012 | 12/31/2011 Net Loans $432,265 $387,174 $281,081 $274,949 $217,131 Total Assets $568,589 $509,754 $419,187 $359,030 $283,793 Total Depo
Slide 16: Income Statement
Income Statement Three Months Ended June 30, 2015 (Consolidated) Three Months Ended June 30, 2014 (Consolidated) Interest Income $7,775 Interest Income $5,849 Interest Expense (884) Interest Expense (657) Net Interest Income (NII) 6,891 Net Interest Income (NII) 5,192 Provision for Loan Losses (600)
Slide 17: Balance Sheet
B a | ance S h e et Numbers presented in thousands (000’s) As of June 30, 2015 (Consolidated) As of June 30, 2014 (Consolidated) Cash and Cash Equivalents $13,802 Cash and Cash Equivalents $9,155 Securities AFS at Fair Value 50,414 Securities AFS at Fair Value 58,363 Loans Held for Sale at Fair Valu
Slide 18: Selected Financial Ratios
Selected Financial Ratios (Consolidated, QTD) (Consolidated, YTD) (Consolidated, YTD) *6/30/2015 12/31/2014 12/31/2013 Return on Average Assets 1.99% 1.00% 1.01% Net Interest Margin 5.14% 5.12% 5.33% Efficiency Ratio 59.67% 74.29% 71.52% Net Loans & Leases to Deposits** 91.87% 93.24% 83.44% Non-Perf
Slide 19: Loan Diversification
Ist Loan Diversification Target Loan Mix Actual 6/30/2015 Actual 6/30/2014 Type Percentage of Gross Type Percentage of Gross Type Percentage of Gross Loans excluding HFS Loans excluding HFS Loans excluding HFS ‘Consumer 30% Consumer 34% ‘Consumer 39% Lending Lending Lending ‘Commercial 30% Commercia
Slide 20: Consumer Lending
FS BANCORB INC. Consumer Lending Q2 2015 Highlights Q2 2015 Dealer Production by State + $149.5 million Outstanding + 39.93% Washington * $22.6 millionin Dealer Originations * 32.33% Oregon (Up 7% from comparable Q2 2014) * 27.74% California * Average Yield of 8.15% in Q2 2015, down from 8.26% in Q1
Slide 21: Home Lending
Ist Home Lending Q2 2015 Closings: $195.5 million ~ 2nd Quarter Purchase Closings: 78.8% or $154 million - Total New Applications in Q2 of $466MM—Home inventory remains limited - $185.5 million in loan sales during Q2 2015 $2000 $180.0 $1600 $140.0 $1200 $1000 $800 $600 $400 $200 soo + Q1 2012 22012
Slide 22: Home Lending: Servicing and Margins
Ist Home Lending Servicing unpaid principal balance $394.5 million - First quarter increase in notional servicing: $92.0milion ~ Book value for mortgage servicing rights: 0.93% - Third party market value of servicing rights: 1.16% - Weighted average coupon: 4.00% Q2 2015 Margins on loan sales: 273%
Slide 23: Commercial Business Lending
Commercial Business Lending Q2 2015 Summary * $75.6 million outstanding as of 6/30/15. + $132.0 million committed as of 6/30/15. Q2 2015 Product Mix Q2 2015 Mortgage Warehouse Lines * Commitments were $35.0 million at quarter end. + Outstanding balances at June 30, 2015 decreased to $14.8 million fr
Slide 24: Residential Construction Lending
Residential Construction Lending Portfolio Highlights: + $70.2 million in YTD Originations. * $109 million Committed as of 6/30/15. + $63.6 million Outstandingas of 6/30/15. * 6.19% Average Coupon Rate. * Majority of Originations in King County. June 30, 2015 Concentration (Committed) $103.2million
Slide 25: Non-accrual Loans and REO
Non-accrual Loans and REO $7,000 $6,000 ‘$5,000 $4,000 $3,000 $2,000 $1,000 $0 Dec-ii Mari2 Jun? Sep-12 Dec-12 Mar-i3 Jun-13 Sep-13 Dec-13 Mar-ié Jun-14 Sep-14 Dec-16 Mar-15 Jun-15 Non-accrusl Loans REO Numbers reported in thousands (000's) 25
Slide 26: Deposit Trends
Deposit Trends As of June 30, 2015 (Consolidated) FS BANCORP INC. As of June 30, 2014 (Consolidated) checking MMDAsSavings ‘=CO's less than $250,000 CDs 250,000+ $34,182 $100,459 8%. 21% $188,104 Numbers reported in thousands (00's) mchecking MMDAsSavings sm CD's less than $250,000 m CDs 250,000+ 7
Slide 27: 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 28: Capital Strategy
Capital Strategy Deployment through leveraging organic asset growth Payment of quarterly dividends; declared tenth consecutive quarterly cash dividend of $0.07 per share for shareholders of record on August 12, 2015 and payable on August 26, 2015 Continued focus on increasing shareholder value throu
Slide 29: Valuation Detail
Valuation Detail * Reported book value of $23.80 per share. Price to Book value of 95% as of market close August 24, 2015 * Excess Capital Held at FS Bancorp, Inc. of $10.0 million * Earnings Per Diluted Share of $0.93 for quarter end June 30, 2015 * Payout ratio at 8.12% based upon $0.07 per share
Slide 30: Contact Information
Contact Information Joe Adams Drew Ness Matthew D. Mullet joea@fsbwa.com drewn@fsbwa.com mattm@fsbwa.com Chief Executive Officer Chief Operations Officer Chief Financial Officer #425-697-8048 #425-697-8075 #425-697-8026 6920 220" Street Southwest Mountlake Terrace Washington 98043