MOUNTLAKE TERRACE, Wash., Jan. 29, 2015 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (Nasdaq:FSBW) ("FS Bancorp" or the "Company"), the holding company for 1st Security Bank of Washington (the "Bank") today reported 2014 net income of $4.5 million, or $1.52 per diluted share, compared to net income of $3.9 million, or $1.29 per diluted share, for the same period last year. Net income for the fourth quarter of 2014 was $1.5 million, or $0.52 per diluted share, compared to $537,000, or $0.18 per diluted share, for the fourth quarter ended December 31, 2013.
"Annualized loan growth was 25.0% in the fourth quarter of 2014, and 37.3% for 2014. Loan growth, coupled with increased gain on sale of loans, including the sale of held for sale consumer loans, resulted in a record quarter of earnings. I am also pleased to announce that our Board of Directors has approved our eighth quarterly cash dividend," stated Joe Adams, CEO of FS Bancorp. The $0.06 dividend will be paid on February 26, 2015, to shareholders of record as of February 12, 2015.
2014 Fourth Quarter and Year End Highlights
- Net income increased $387,000, or 33.8% to $1.5 million for the fourth quarter of 2014, compared to $1.1 million for the previous quarter, and $537,000 for the comparable quarter one year ago;
- Total loans increased $32.3 million, or 8.9% to $394.2 million at December 31, 2014, compared to $361.9 million at September 30, 2014, and $287.2 million at December 31, 2013;
- Total assets increased $38.2 million, or 8.1% to $509.8 million at December 31, 2014, compared to $471.6 million at September 30, 2014, and $419.2 million at December 31, 2013;
- Relationship-based transactional deposits (noninterest, interest-bearing checking, and escrow accounts) increased 19.0% to $86.3 million at December 31, 2014, compared to $75.7 million at September 30, 2014, and $72.5 million at December 31, 2013;
- Total non-performing assets remained low at $433,000 as of December 31, 2014, compared to $409,000 at September 30, 2014, and $3.2 million at December 31, 2013;
- The ratio of non-performing assets to total assets remained virtually unchanged at 0.1% at both December 31, 2014, and at September 30, 2014, and improved from 0.8% at December 31, 2013;
- Capital levels at the Bank reflect total risk-based capital of 14.7% and a Tier 1 leverage capital ratio of 11.2% as of December 31, 2014 compared to 16.6% and 12.6% as of December 31, 2013, respectively.
Balance Sheet and Credit Quality
Total assets increased to $509.8 million at December 31, 2014, compared to $471.6 million at September 30, 2014, and $419.2 million at December 31, 2013. The increase in total assets from September 30, 2014 was primarily due to increases in loans receivable, net of $32.6 million, and in total cash and cash equivalents of $10.4 million, partially offset by a decrease in loans held for sale of $4.5 million. The $90.6 million increase in total assets at December 31, 2014 from December 31, 2013 was primarily due to increases in loans receivable, net of $106.1 million, and loans held for sale of $14.8 million, partially offset by a decrease in total cash and cash equivalents of $21.0 million, and securities available for sale of $7.5 million.
| LOAN PORTFOLIO | ||||||
| (Dollars in thousands) | ||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | ||||
| Amount | Percent | Amount | Percent | Amount | Percent | |
| REAL ESTATE LOANS | ||||||
| Commercial | $ 42,970 | 10.9% | $ 44,190 | 12.2% | $ 32,970 | 11.5% |
| Construction and development | 57,813 | 14.7 | 51,413 | 14.2 | 41,633 | 14.5 |
| Home equity | 15,737 | 4.0 | 16,270 | 4.5 | 15,172 | 5.3 |
| One-to-four-family (held for sale excluded) | 46,801 | 11.9 | 41,757 | 11.5 | 20,809 | 7.2 |
| Multi-family | 16,201 | 4.1 | 15,023 | 4.2 | 4,682 | 1.6 |
| Total real estate loans | 179,522 | 45.6 | 168,653 | 46.6 | 115,266 | 40.1 |
| CONSUMER LOANS | ||||||
| Indirect home improvement | 99,304 | 25.2 | 96,949 | 26.8 | 91,167 | 31.7 |
| Solar (held for sale excluded) | 18,162 | 4.6 | 13,402 | 3.7 | 16,838 | 5.9 |
| Marine | 16,713 | 4.2 | 16,523 | 4.6 | 11,203 | 3.9 |
| Automobile | 674 | 0.2 | 764 | 0.2 | 1,230 | 0.4 |
| Recreational | 441 | 0.1 | 463 | 0.1 | 553 | 0.2 |
| Home improvement | 329 | 0.1 | 367 | 0.1 | 463 | 0.2 |
| Other | 1,184 | 0.3 | 1,222 | 0.3 | 1,252 | 0.4 |
| Total consumer loans | 136,807 | 34.7 | 129,690 | 35.8 | 122,706 | 42.7 |
| COMMERCIAL BUSINESS LOANS | 77,881 | 19.7 | 63,604 | 17.6 | 49,244 | 17.2 |
| Total loans | 394,210 | 100.0% | 361,947 | 100.0% | 287,216 | 100.0% |
| Allowance for loan losses | (6,090) | (5,812) | (5,092) | |||
| Deferred cost, fees, and discounts, net | (946) | (1,561) | (1,043) | |||
| Total loans receivable, net | $ 387,174 | $ 354,574 | $ 281,081 | |||
Loans receivable, net increased $32.6 million to $387.2 million at December 31, 2014 from $354.6 million at September 30, 2014, and increased $106.1 million from $281.1 million at December 31, 2013. Total real estate loans increased $10.9 million quarter over quarter including increases in construction and development, one-to-four-family, and multi-family real estate loans. Quarter over quarter changes in other loan categories included a $14.3 million increase in commercial business loans, and a $7.1 million increase in consumer loans.
A portion of the California originated solar loans totaling $9.1 million were sold in the fourth quarter of 2014. The sale resulted in a gain of $377,000 or 4.1% of the amount sold.
One-to-four-family originations of loans held for sale, including loans brokered to other institutions, increased 20.0% to $97.4 million during the quarter ended December 31, 2014, compared to $81.2 million for the preceding quarter, and $46.9 million for the same quarter one year ago. The increase in originations was attributed to new production staff hired in the third and fourth quarter of 2014 and a favorable reduction in market interest rates. The percentage of one-to-four-family mortgage loan originations for purchases was 68.1% of the total volume of originations versus 31.9% of volume for refinances during the fourth quarter of 2014, compared to 80.1% in purchase volume versus 19.9% in refinance volume for the third quarter of 2014. During the quarter ended December 31, 2014, the Company sold $90.2 million of one-to-four-family mortgage loans compared to sales of $74.4 million for the preceding quarter, and sales of $45.9 million for the same quarter one year ago.
The allowance for loan losses ("ALLL") at December 31, 2014 was $6.1million, or 1.5% of gross loans receivable, compared to $5.8 million, or 1.6% of gross loans receivable as of September 30, 2014, and $5.1 million, or 1.8% of gross loans receivable at December 31, 2013. Non-performing loans, consisting of non-accrual loans, increased slightly to $433,000 at December 31, 2014, from $409,000 at September 30, 2014, and decreased from $1.1 million at December 31, 2013. Substandard loans increased to $2.2 million at December 31, 2014, compared to $1.3 million at September 30, 2014, and $2.1 million at December 31, 2013, due to two commercial loan downgrades. These loans were downgraded as a result of the financial performance by the borrowers. There was no other real estate owned ("OREO") at December 31, 2014, or at September 30, 2014, compared to $2.1 million at December 31, 2013. Additionally, at December 31, 2014, the Company had $783,000 in restructured loans, all of which were performing in accordance with their modified payment terms.
Total deposits increased $40.2 million, or 10.6% to $420.4 million at December 31, 2014, from $380.3 million at September 30, 2014, and increased $83.6 million from $336.9 million at December 31, 2013. Relationship-based transactional deposits increased $10.6 million to $86.3 million as of December 31, 2014, from $75.7 million at September 30, 2014, and increased $13.8 million from $72.5 million at December 31, 2013. Money market and savings accounts increased $30.8 million to $174.2 million at December 31, 2014, from $143.4 million at September 30, 2014, and increased from $134.5 million at December 31, 2013. Time deposits decreased $1.2 million, or 0.7% to $160.0 million at December 31, 2014, from $161.2 million at September 30, 2014, and increased from $129.9 million at the same period last year. Non-retail deposits which include $19.1 million of brokered certificates of deposit, $15.6 million of online certificates of deposit, and $1.7 million of public funds, decreased to $36.4 million as of December 31, 2014, compared to $40.6 million and $24.1 million at September 30, 2014, and December 31, 2013, respectively.
| DEPOSIT BREAKDOWN | ||||||
| (Dollars in thousands) | ||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | ||||
| Amount | Percent | Amount | Percent | Amount | Percent | |
| Noninterest-bearing checking | $ 53,743 | 12.8% | $ 46,137 | 12.1% | $ 44,309 | 13.2% |
| Interest-bearing checking | 29,585 | 7.0 | 26,179 | 6.9 | 26,725 | 7.9 |
| Savings | 21,560 | 5.1 | 19,388 | 5.1 | 15,345 | 4.6 |
| Money market | 152,611 | 36.3 | 124,026 | 32.6 | 119,162 | 35.4 |
| Certificates of deposits of less than $100,000 | 52,323 | 12.4 | 51,539 | 13.6 | 46,237 | 13.7 |
| Certificates of deposits of $100,000 through $250,000 | 74,008 | 17.6 | 70,691 | 18.6 | 52,264 | 15.5 |
| Certificates of deposits of more than $250,000 | 33,623 | 8.0 | 38,923 | 10.2 | 31,360 | 9.3 |
| Escrows | 2,991 | 0.8 | 3,406 | 0.9 | 1,474 | 0.4 |
| Total | $ 420,444 | 100.0% | $ 380,289 | 100.0% | $ 336,876 | 100.0% |
Borrowings decreased $5.5 million to $17.0 million as of December 31, 2014, from $22.6 million at September 30, 2014, as the Company repaid Federal Home Loan Bank advances upon maturity. Additional borrowings were not required during the quarter as our asset growth was funded by the growth in deposits.
Total equity increased $1.8 million to $65.8 million at December 31, 2014, from $64.0 million at September 30, 2014. The increase in equity from the third quarter of 2014 was predominantly a result of net income of $1.5 million, and an increase of $180,000 in other comprehensive income for the quarter ended December 31, 2014.
Book value per common share was $22.48 as of December 31, 2014, compared to $21.90 as of September 30, 2014, and $20.55 as of December 31, 2013.
The Bank is well capitalized with a total risk-based capital ratio of 14.7% and a Tier 1 leverage capital ratio of 11.2% at December 31, 2014, compared to 16.6% and 12.6% at December 31, 2013, respectively. The Company has a total risk-based capital ratio of 17.1% and Tier 1 leverage capital ratio of 13.2%, as of December 31, 2014, compared to 20.3% and 15.5% at December 31, 2013, respectively.
Operating Results
Net interest income increased $1.3 million, or 25.6%, to $6.2 million for the three months ended December 31, 2014, from $4.9 million for the three months ended December 31, 2013. For the year ended December 31, 2014, net interest income increased $2.6 million, or 13.2%, to $22.1 million compared to $19.5 million for the same period in the prior year.
The net interest margin ("NIM") decreased 21 basis points to 5.12% for the year ended December 31, 2014, from 5.33% for the same period in the prior year. The reduced NIM reflects growth in lower yielding loan types as part of our loan diversification strategy. The loan diversification strategy will continue to pressure the NIM as real estate and business loans have a lower yield than consumer loan products. As a percentage, consumer loans to total loans were 34.7% as of December 31, 2014, compared to 42.7% as of December 31, 2013. The average cost of funds decreased 17 basis points to 0.63% for the three months ended December 31, 2014, from 0.80% for the three months ended December 31, 2013, and decreased seven basis points to 0.70% for the year ended December 31, 2014, from 0.77% for the same period in the prior year. Deposit costs continue to decrease due to increases in noninterest bearing deposits and repricing certificates of deposit upon maturity at current market rates.
The provision for loan losses was $450,000 for the three months ended December 31, 2014 and for the three months ended December 31, 2013. The provision for loan losses decreased to $1.8 million for the year ended December 31, 2014, compared to $2.2 million for the year ended December 31, 2013, primarily due to the decrease in non-performing assets. Non-performing loans were $433,000, or 0.1% of total gross loans at December 31, 2014, compared to $1.1 million or 0.4% of total gross loans at December 31, 2013. During the three months ended December 31, 2014, net charge-offs totaled $172,000 compared to $669,000 during the three months ended December 31, 2013. During the year ended December 31, 2014, net charge-offs totaled $801,000 compared to $1.8 million during the year ended December 31, 2013.
Noninterest income increased $1.6 million, or 101.8%, to $3.1 million for the three months ended December 31, 2014, from $1.5 million for the three months ended December 31, 2013. The increase during the period was primarily due to a $1.4 million increase in gain on sale of loans. Noninterest income increased $1.1 million, or 12.5%, to $10.0 million for the year ended December 31, 2014, from $8.9 million for the year ended December 31, 2013. The increase was due to a $1.2 million increase in gain on sale of loans, a $271,000 increase in other noninterest income primarily due to a $203,000 increase in brokered loan fees, partially offset by a decrease of $305,000 in gain on sale of investments, and a $45,000 decrease in service charges and fee income.
Noninterest expense increased $1.7 million, or 31.7%, to $6.9 million for the three months ended December 31, 2014, from $5.2 million for the three months ended December 31, 2013. Changes in noninterest expense included a $1.4 million, or 53.7% increase in salaries and benefits, including commissions and incentives for production staff, as well as compensation associated with the equity incentive plan, a $318,000, or 42.0% increase in operations costs, and a $109,000, or 37.8% increase in data processing associated with the continued investment in increasing the lending and deposit franchise. These increases were partially offset by a decrease of $171,000, or 100.0% of OREO fair value impairments as there was no OREO at both December 31, 2014, and September 30, 2014. Noninterest expense increased $3.5 million, or 17.4%, to $23.9 million for the year ended December 31, 2014, from $20.4 million for the year ended December 31, 2013, primarily as a result of a $3.2 million, or 29.2% increase in salaries and benefits due to hiring and increased commissions and incentive compensation associated with the Company's loan growth and the implementation of the equity incentive plan. Increases in operation costs and occupancy costs of $453,000 and $210,000, respectively, were mostly offset by a $476,000 decrease in OREO fair value impairments, and a $123,000 decrease in OREO expenses.
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 predominantly small and middle-market businesses and individuals in western Washington through its seven 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; secondary market conditions for loans and our ability to sell loans in the secondary market; 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 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; and other economic, competitive, governmental, regulatory and technical factors affecting our operations, pricing, products and services and other risks described in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2013.
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 2015 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, INC. AND SUBSIDIARY | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (Dollars in thousands, except share amounts) | |||
| December 31, | September 30, | December 31, | |
| 2014 | 2014 | 2013 | |
| Unaudited | Unaudited | Unaudited | |
| ASSETS | |||
| Cash and due from banks | $ 10,799 | $ 1,995 | $ 1,425 |
| Interest-bearing deposits at other financial institutions | 9,299 | 7,696 | 39,660 |
| Securities available-for-sale, at fair value | 48,744 | 49,443 | 56,239 |
| Federal Home Loan Bank stock, at cost | 1,650 | 1,853 | 1,702 |
| Loans held for sale | 25,983 | 30,485 | 11,185 |
| Loans receivable, net | 387,174 | 354,574 | 281,081 |
| Accrued interest receivable | 1,558 | 1,525 | 1,261 |
| Premises and equipment, net | 13,584 | 13,747 | 13,818 |
| Other real estate owned ("OREO") | — | — | 2,075 |
| Deferred tax asset | — | — | 816 |
| Bank owned life insurance ("BOLI") | 6,556 | 6,508 | 6,369 |
| Servicing rights | 3,061 | 2,569 | 2,093 |
| Other assets | 1,346 | 1,207 | 1,463 |
| TOTAL ASSETS | $ 509,754 | $ 471,602 | $ 419,187 |
| LIABILITIES | |||
| Deposits | |||
| Noninterest-bearing accounts | $ 56,734 | $ 49,543 | $ 45,783 |
| Interest-bearing accounts | 363,710 | 330,746 | 291,093 |
| Total deposits | 420,444 | 380,289 | 336,876 |
| Borrowings | 17,034 | 22,552 | 16,664 |
| Deferred tax liability | 809 | — | — |
| Other liabilities | 5,631 | 4,755 | 3,334 |
| Total liabilities | 443,918 | 407,596 | 356,874 |
| COMMITMENTS AND CONTINGENCIES | |||
| STOCKHOLDERS' EQUITY | |||
| Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued or outstanding | — | — | — |
| Common stock, $0.01 par value; 45,000,000 shares authorized; 3,235,625 shares issued and outstanding at December 31, 2014, and September 30, 2014, and 3,240,125 at December 31, 2013 | 32 | 32 | 32 |
| Additional paid-in capital | 29,450 | 29,200 | 30,097 |
| Retained earnings | 38,125 | 36,772 | 35,215 |
| Accumulated other comprehensive loss (income) | 117 | (63) | (898) |
| Unearned shares - Employee Stock Ownership Plan | |||
| ("ESOP") | (1,888) | (1,935) | (2,133) |
| Total stockholders' equity | 65,836 | 64,006 | 62,313 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 509,754 | $ 471,602 | $ 419,187 |
| FS BANCORP, INC. AND SUBSIDIARY | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (Dollars in thousands, except per share amounts) | ||||
| Three Months Ended | Year Ended | |||
| December 31, | December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| INTEREST INCOME | ||||
| Loans receivable, including fees | $ 6,602 | $ 5,254 | $ 23,615 | $ 20,791 |
| Interest and dividends on investment securities, and cash and cash equivalents | 277 | 271 | 1,227 | 942 |
| Total interest and dividend income | 6,879 | 5,525 | 24,842 | 21,733 |
| INTEREST EXPENSE | ||||
| Deposits | 616 | 540 | 2,434 | 1,978 |
| Borrowings | 71 | 57 | 268 | 200 |
| Total interest expense | 687 | 597 | 2,702 | 2,178 |
| NET INTEREST INCOME | 6,192 | 4,928 | 22,140 | 19,555 |
| PROVISION FOR LOAN LOSSES | 450 | 450 | 1,800 | 2,170 |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 5,742 | 4,478 | 20,340 | 17,385 |
| NONINTEREST INCOME | ||||
| Service charges and fee income | 461 | 386 | 1,762 | 1,807 |
| Gain on sale of loans | 2,486 | 1,055 | 7,577 | 6,371 |
| (Loss) gain on sale of investment securities | — | — | (41) | 264 |
| Impairment loss on long-lived assets | (9) | — | (9) | — |
| Other noninterest income | 204 | 116 | 744 | 473 |
| Total noninterest income | 3,142 | 1,557 | 10,033 | 8,915 |
| NONINTEREST EXPENSE | ||||
| Salaries and benefits | 4,144 | 2,696 | 14,064 | 10,886 |
| Operations | 1,076 | 758 | 3,479 | 3,026 |
| Occupancy | 434 | 475 | 1,655 | 1,549 |
| Data processing | 397 | 288 | 1,315 | 1,105 |
| OREO fair value impairments, net of loss on sales | — | 171 | 42 | 518 |
| OREO expense (income) | (4) | 53 | 9 | 132 |
| Loan costs | 333 | 329 | 1,346 | 1,336 |
| Professional and board fees | 318 | 298 | 1,236 | 1,193 |
| FDIC insurance | 66 | 65 | 254 | 251 |
| Marketing and advertising | 150 | 124 | 520 | 474 |
| Impairment (recovery) on servicing rights | 1 | (6) | (18) | (109) |
| Total noninterest expense | 6,915 | 5,251 | 23,902 | 20,361 |
| INCOME BEFORE PROVISION FOR INCOME TAXES | 1,969 | 784 | 6,471 | 5,939 |
| PROVISION FOR INCOME TAXES | 436 | 247 | 1,931 | 2,019 |
| NET INCOME | $ 1,533 | $ 537 | $ 4,540 | $ 3,920 |
| Basic earnings per share | $ 0.52 | $ 0.18 | $ 1.52 | $ 1.29 |
| Diluted earnings per share | $ 0.52 | $ 0.18 | $ 1.52 | $ 1.29 |
| KEY FINANCIAL RATIOS AND DATA Unaudited | |||
| (Dollars in thousands, except per share amounts) | At or For the Three Months Ended | ||
| December 31, | September 30, | December 31, | |
| 2014 | 2014 | 2013 | |
| PERFORMANCE RATIOS: | |||
| Return on assets (ratio of net income to average total assets) (1) | 1.22% | 0.99% | 0.52% |
| Return on equity (ratio of net income to average equity) (1) | 9.46 | 7.24 | 3.43 |
| Yield on average interest-earning assets | 5.69 | 5.96 | 5.71 |
| Interest incurred on liabilities as a percentage of average noninterest bearing deposits and interest-bearing liabilities | 0.63 | 0.76 | 0.80 |
| Interest rate spread information – average during period | 5.06 | 5.20 | 4.91 |
| Net interest margin (1) | 5.12 | 5.28 | 5.09 |
| Operating expense to average total assets | 5.49 | 5.24 | 5.12 |
| Average interest-earning assets to average interest-bearing liabilities | 126.98 | 128.16 | 129.08 |
| Efficiency ratio (2) | 74.08 | 73.77 | 80.97 |
| At or For the Year Ended | |||
| December 31, | December 31, | ||
| 2014 | 2013 | ||
| PERFORMANCE RATIOS: | |||
| Return on assets (ratio of net income to average total assets) (1) | 1.00% | 1.01% | |
| Return on equity (ratio of net income to average equity) (1) | 7.19 | 6.43 | |
| Yield on average interest-earning assets | 5.74 | 5.93 | |
| Interest incurred on liabilities as a percentage of average noninterest bearing deposits and interest-bearing liabilities | 0.70 | 0.77 | |
| Interest rate spread information – average during period | 5.04 | 5.16 | |
| Net interest margin (1) | 5.12 | 5.33 | |
| Operating expense to average total assets (1) | 5.27 | 5.27 | |
| Average interest-earning assets to average interest-bearing liabilities | 128.30 | 129.73 | |
| Efficiency ratio (2) | 74.29 | 71.52 | |
| December 31, | September 30, | December 31, | |
| ASSET QUALITY RATIOS AND DATA: | 2014 | 2014 | 2013 |
| Non-performing assets to total assets at end of period (3) | 0.08% | 0.09% | 0.77% |
| Non-performing loans to total gross loans (4) | 0.11 | 0.11 | 0.38 |
| Allowance for loan losses to non-performing loans (4) | 1,406.47 | 1,421.03 | 462.49 |
| Allowance for loan losses to gross loans receivable | 1.54 | 1.61 | 1.77 |
| CAPITAL RATIOS, BANK ONLY: | |||
| Tier 1 leverage capital | 11.17% | 11.79% | 12.61% |
| Tier 1 risk-based capital | 13.43 | 13.63 | 15.38 |
| Total risk-based capital | 14.68 | 14.88 | 16.64 |
| CAPITAL RATIOS, COMPANY ONLY: | |||
| Tier 1 leverage capital | 13.16% | 13.92% | 15.50% |
| Total risk-based capital | 17.08 | 17.35 | 20.28 |
| At or For the Three Months Ended | |||
| December 31, | September 30, | December 31, | |
| PER COMMON SHARE DATA: | 2014 | 2014 | 2013 |
| Basic earnings per share | $ 0.52 | $ 0.39 | $ 0.18 |
| Diluted earnings per share | $ 0.52 | $ 0.39 | $ 0.18 |
| Weighted average basic shares outstanding | 2,929,073 | 2,922,593 | 3,032,757 |
| Weighted average diluted shares outstanding | 2,945,137 | 2,932,251 | 3,032,757 |
| Common shares outstanding at period end | 2,929,073 (7) | 2,922,593 (6) | 3,032,757 (5) |
| Book value per share using outstanding common shares | $ 22.48 | $ 21.90 | $ 20.55 |
| _________________________ | ||||
| (1) | Annualized. | |||
| (2) | Total noninterest expense as a percentage of net interest income and total other noninterest income. | |||
| (3) | 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. | |||
| (4) | Non-performing loans consists of non-accruing loans. | |||
| (5) | Common shares were calculated using shares outstanding of 3,240,125 at December 31, 2013, less 207,368 unallocated ESOP shares. | |||
| (6) | Common shares were calculated using shares outstanding of 3,235,625 at September 30, 2014, less 125,105 shares of restricted stock, and 187,927 unallocated ESOP shares. | |||
| (7) | Common shares were calculated using shares outstanding at period end of 3,235,625 at December 31, 2014, less 125,105 restricted stock shares, and 181,447 unallocated ESOP shares. | |||