FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding
company for 1st Security Bank of Washington (the “Bank” or “1st
Security Bank”) today reported 2023 third quarter net income
of $9.0 million, or $1.13 per diluted share, compared to
$8.5 million, or $1.08 per diluted share, for the comparable
quarter one year ago. For the nine months ended September 30, 2023,
net income was $26.3 million, or $3.33 per diluted share,
compared to net income of $22.0 million, or $2.73 per diluted
share, for the comparable nine-month period in 2022.
“We were honored to be recently named the ‘Number One Best Place
to Work’ in the extra-large company category by the Puget
Sound Business Journal,” stated Joe Adams, CEO. “We are also
pleased that our Board of Directors approved our forty-third
consecutive quarterly cash dividend of $0.25 per share,
demonstrating our continued commitment to returning value to
shareholders. The cash dividend will be paid on November
22, 2023, to shareholders of record as of November 9, 2023,”
concluded Adams.
2023 Third Quarter Highlights
- Net income was $9.0 million for the third quarter of 2023,
compared to $9.1 million in the previous quarter, and $8.5 million
for the comparable quarter one year ago;
- Net interest margin (“NIM”) compressed to 4.34%, compared to
4.66% for the previous quarter, and 4.54% for the comparable
quarter one year ago;
- Total deposits increased $89.1 million, or 3.8%, to $2.45
billion at September 30, 2023 compared to $2.37 billion
at June 30, 2023 and increased $371.1 million, or 17.8%, from
$2.08 billion at September 30, 2022, with noninterest-bearing
deposit totals of $670.2 million at September 30, 2023, $675.2
million at June 30, 2023, and $581.6 million at September 30,
2022;
- Loans receivable, net increased $33.1 million, or 1.4%, to
$2.38 billion at September 30, 2023, compared to $2.34 billion
at June 30, 2023, and increased $291.6 million, or 14.0%, from
$2.08 billion at September 30, 2022;
- Consumer loans, of which 87.9% are home improvement loans,
increased $6.2 million, or 1.0%, to $640.1 million at
September 30, 2023, compared to $633.9 million in the previous
quarter, and increased $121.5 million, or 23.4%, from $518.6
million in the comparable quarter one year ago. During the three
months ended September 30, 2023, consumer loan originations
included 82.4% of home improvement loans originated with a Fair
Isaac and Company, Incorporated (“FICO”) score above 720 and 95.5%
of home improvement loans with a UCC-2 security filing;
- Segment reporting in the third quarter of 2023 reflected net
income of $8.8 million for the Commercial and Consumer Banking
segment and $166,000 for the Home Lending segment, compared to
net income of $9.1 million and $55,000 in the prior quarter, and
net income of $9.3 million and net loss of $794,000 in the
third quarter of 2022, respectively;
- The ratio of available unencumbered cash and secured borrowing
capacity at the Federal Home Loan Bank (“FHLB”) and the Federal
Reserve Bank to uninsured deposits was 216% at September 30, 2023,
compared to 209% in the prior quarter. The average deposit size per
FDIC-insured account at the Bank was $33,000 for both September 30,
2023 and June 30, 2023; and
- Regulatory capital ratios at the Bank were 13.1% for total
risk-based capital and 10.3% for Tier 1 leverage capital at
September 30, 2023, compared to 12.9% for total risk-based capital
and 10.3% for Tier 1 leverage capital at June 30, 2023.
Segment Reporting
The Company reports two segments: Commercial and Consumer
Banking and Home Lending. The Commercial and Consumer Banking
segment provides diversified financial products and services to our
commercial and consumer customers. These products and services
include deposit products; residential, consumer, business and
commercial real estate lending portfolios and cash management
services. This segment is also responsible for the management of
the investment portfolio and other assets of the Bank. The Home
Lending segment originates one-to-four-family residential mortgage
loans primarily for sale in the secondary markets as well as loans
held for investment.
The tables below provide a summary of segment reporting at or
for the three and nine months ended September 30, 2023 and
2022 (dollars in thousands):
|
|
At or For the Three Months Ended September 30, 2023 |
|
Condensed income
statement: |
|
Commercial and Consumer Banking |
|
|
Home Lending |
|
|
Total |
|
Net interest income (1) |
|
$ |
27,563 |
|
|
$ |
3,071 |
|
|
$ |
30,634 |
|
Provision for credit
losses |
|
|
(437 |
) |
|
|
(111 |
) |
|
|
(548 |
) |
Noninterest income (2) |
|
|
2,680 |
|
|
|
2,302 |
|
|
|
4,982 |
|
Noninterest expense (3) |
|
|
(18,539 |
) |
|
|
(5,047 |
) |
|
|
(23,586 |
) |
Income before provision for
income taxes |
|
|
11,267 |
|
|
|
215 |
|
|
|
11,482 |
|
Provision for income
taxes |
|
|
(2,480 |
) |
|
|
(49 |
) |
|
|
(2,529 |
) |
Net income |
|
$ |
8,787 |
|
|
$ |
166 |
|
|
$ |
8,953 |
|
Total average assets for
period ended |
|
$ |
2,361,014 |
|
|
$ |
540,372 |
|
|
$ |
2,901,386 |
|
Full-time employees
("FTEs") |
|
|
434 |
|
|
|
128 |
|
|
|
562 |
|
|
|
At or For the Three Months Ended September 30, 2022 |
|
Condensed income
statement: |
|
Commercial and Consumer Banking |
|
|
Home Lending |
|
|
Total |
|
Net interest income (1) |
|
$ |
24,620 |
|
|
$ |
2,907 |
|
|
$ |
27,527 |
|
(Provision) recovery for
credit losses |
|
|
(1,811 |
) |
|
|
93 |
|
|
|
(1,718 |
) |
Noninterest income (2) |
|
|
3,314 |
|
|
|
867 |
|
|
|
4,181 |
|
Noninterest expense (3) |
|
|
(14,471 |
) |
|
|
(4,867 |
) |
|
|
(19,338 |
) |
Income (loss) before
(provision) benefit for income taxes |
|
|
11,652 |
|
|
|
(1,000 |
) |
|
|
10,652 |
|
(Provision) benefit for income
taxes |
|
|
(2,400 |
) |
|
|
206 |
|
|
|
(2,194 |
) |
Net income (loss) |
|
$ |
9,252 |
|
|
$ |
(794 |
) |
|
$ |
8,458 |
|
Total average assets for
period ended |
|
$ |
2,072,614 |
|
|
$ |
427,368 |
|
|
$ |
2,499,982 |
|
FTEs |
|
|
389 |
|
|
|
140 |
|
|
|
529 |
|
|
|
At or For the Nine Months Ended September 30, 2023 |
|
Condensed income
statement: |
|
Commercial and Consumer Banking |
|
|
Home Lending |
|
|
Total |
|
Net interest income (1) |
|
$ |
83,332 |
|
|
$ |
9,516 |
|
|
$ |
92,848 |
|
Provision for credit
losses |
|
|
(2,555 |
) |
|
|
(817 |
) |
|
|
(3,372 |
) |
Noninterest income (2) |
|
|
7,766 |
|
|
|
7,268 |
|
|
|
15,034 |
|
Noninterest expense (3) |
|
|
(56,099 |
) |
|
|
(15,215 |
) |
|
|
(71,314 |
) |
Income before provision for
income taxes |
|
|
32,444 |
|
|
|
752 |
|
|
|
33,196 |
|
Provision for income
taxes |
|
|
(6,758 |
) |
|
|
(157 |
) |
|
|
(6,915 |
) |
Net income |
|
$ |
25,686 |
|
|
$ |
595 |
|
|
$ |
26,281 |
|
Total average assets for
period ended |
|
$ |
2,288,996 |
|
|
$ |
520,513 |
|
|
$ |
2,809,509 |
|
FTEs |
|
|
434 |
|
|
|
128 |
|
|
|
562 |
|
|
|
At or For the Nine Months Ended September 30, 2022 |
|
Condensed income
statement: |
|
Commercial and Consumer Banking |
|
|
Home Lending |
|
|
Total |
|
Net interest income (1) |
|
$ |
66,983 |
|
|
$ |
7,995 |
|
|
$ |
74,978 |
|
Provision for credit
losses |
|
|
(3,727 |
) |
|
|
(905 |
) |
|
|
(4,632 |
) |
Noninterest income (2) |
|
|
7,944 |
|
|
|
6,468 |
|
|
|
14,412 |
|
Noninterest expense (3) |
|
|
(42,878 |
) |
|
|
(14,456 |
) |
|
|
(57,334 |
) |
Income (loss) before
(provision) benefit for income taxes |
|
|
28,322 |
|
|
|
(898 |
) |
|
|
27,424 |
|
(Provision) benefit for income
taxes |
|
|
(5,583 |
) |
|
|
186 |
|
|
|
(5,397 |
) |
Net income (loss) |
|
$ |
22,739 |
|
|
$ |
(712 |
) |
|
$ |
22,027 |
|
Total average assets for
period ended |
|
$ |
1,972,376 |
|
|
$ |
403,990 |
|
|
$ |
2,376,366 |
|
FTEs |
|
|
389 |
|
|
|
140 |
|
|
|
529 |
|
(1) |
Net interest income is the difference between interest earned on
assets and the cost of liabilities to fund those assets. Interest
earned includes actual interest earned on segment assets and, if
the segment has excess liabilities, interest credits for providing
funding to the other segment. The cost of liabilities includes
interest expense on segment liabilities and, if the segment does
not have enough liabilities to fund its assets, a funding charge
based on the cost of assigned liabilities to fund segment
assets. |
(2) |
Noninterest income includes
activity from certain residential mortgage loans that were
initially originated for sale and measured at fair value, and
subsequently transferred to loans held for investment. Gains and
losses from changes in fair value for these loans are reported in
earnings as a component of noninterest income. For the three and
nine months ended September 30, 2023, the Company recorded a net
decrease in fair value of $343,000 and $285,000, as compared
to a net decrease in fair value of $816,000 and $1.8 million for
the three and nine months ended September 30, 2022, respectively.
As of September 30, 2023 and 2022, there were $15.2 million
and $14.2 million, respectively, in residential mortgage loans
recorded at fair value as they were previously transferred from
loans held for sale to loans held for investment. |
(3) |
Noninterest expense includes
allocated overhead expense from general corporate activities.
Allocation is determined based on a combination of segment assets
and FTEs. For the three and nine months ended September 30,
2023 and 2022, the Home Lending segment included allocated overhead
expenses of $1.5 million and $4.7 million, respectively.
|
|
|
Asset Summary
Total assets increased $14.5 million, or 0.5%, to
$2.92 billion at September 30, 2023, compared to $2.91 billion
at June 30, 2023, and increased $267.9 million, or 10.1%, from
$2.65 billion at September 30, 2022. The increase in total
assets at September 30, 2023, compared to the June 30,
2023, was primarily due to increases in loans receivable, net of
$33.1 million and securities available-for-sale of
$26.0 million, partially offset by a decrease in
total cash and cash equivalents of $51.4 million. The
increase in total assets at September 30, 2023, compared to
September 30, 2022, was primarily due to increases in loans
receivable, net of $291.6 million, primarily due to organic loan
growth funded through deposits received from the purchase of seven
retail branches from Columbia State Bank completed on February 24,
2023 (“Branch Acquisition”) and assets purchased in the Branch
Acquisition. The increase in total assets at September 30,
2023, compared to September 30, 2022, also
included securities available-for-sale of $24.0 million,
core deposit intangible (“CDI”), net of $14.8 million and
interest-earning deposits at other financial institutions of
$12.7 million. These increases were partially
offset by decreases in total cash and cash equivalents of
$79.1 million, FHLB stock of $9.9 million and loans held
for sale (“HFS”) of $4.8 million.
LOAN PORTFOLIO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
September 30, 2023 |
|
|
June 30, 2023 |
|
|
September 30, 2022 |
|
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
REAL ESTATE
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
364,673 |
|
|
|
15.2 |
% |
|
$ |
343,008 |
|
|
|
14.4 |
% |
|
$ |
310,923 |
|
|
|
14.7 |
% |
Construction and
development |
|
|
289,873 |
|
|
|
12.0 |
|
|
|
312,093 |
|
|
|
13.2 |
|
|
|
335,177 |
|
|
|
15.9 |
|
Home equity |
|
|
67,103 |
|
|
|
2.8 |
|
|
|
62,304 |
|
|
|
2.6 |
|
|
|
53,681 |
|
|
|
2.6 |
|
One-to-four-family (excludes
HFS) |
|
|
540,670 |
|
|
|
22.5 |
|
|
|
521,734 |
|
|
|
22.0 |
|
|
|
429,196 |
|
|
|
20.3 |
|
Multi-family |
|
|
243,661 |
|
|
|
10.1 |
|
|
|
231,675 |
|
|
|
9.8 |
|
|
|
223,712 |
|
|
|
10.6 |
|
Total real estate loans |
|
|
1,505,980 |
|
|
|
62.6 |
|
|
|
1,470,814 |
|
|
|
62.0 |
|
|
|
1,352,689 |
|
|
|
64.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSUMER
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect home improvement |
|
|
562,650 |
|
|
|
23.4 |
|
|
|
557,818 |
|
|
|
23.5 |
|
|
|
447,462 |
|
|
|
21.2 |
|
Marine |
|
|
73,887 |
|
|
|
3.1 |
|
|
|
72,484 |
|
|
|
3.0 |
|
|
|
68,106 |
|
|
|
3.2 |
|
Other consumer |
|
|
3,547 |
|
|
|
0.1 |
|
|
|
3,606 |
|
|
|
0.2 |
|
|
|
2,987 |
|
|
|
0.2 |
|
Total consumer loans |
|
|
640,084 |
|
|
|
26.6 |
|
|
|
633,908 |
|
|
|
26.7 |
|
|
|
518,555 |
|
|
|
24.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMERCIAL BUSINESS
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
|
236,520 |
|
|
|
9.8 |
|
|
|
237,403 |
|
|
|
10.0 |
|
|
|
211,009 |
|
|
|
10.0 |
|
Warehouse lending |
|
|
23,489 |
|
|
|
1.0 |
|
|
|
30,649 |
|
|
|
1.3 |
|
|
|
28,102 |
|
|
|
1.3 |
|
Total commercial business
loans |
|
|
260,009 |
|
|
|
10.8 |
|
|
|
268,052 |
|
|
|
11.3 |
|
|
|
239,111 |
|
|
|
11.3 |
|
Total loans receivable,
gross |
|
|
2,406,073 |
|
|
|
100.0 |
% |
|
|
2,372,774 |
|
|
|
100.0 |
% |
|
|
2,110,355 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses on
loans |
|
|
(30,501 |
) |
|
|
|
|
|
|
(30,350 |
) |
|
|
|
|
|
|
(26,426 |
) |
|
|
|
|
Total loans receivable,
net |
|
$ |
2,375,572 |
|
|
|
|
|
|
$ |
2,342,424 |
|
|
|
|
|
|
$ |
2,083,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net increased $33.1 million to
$2.38 billion at September 30, 2023, from $2.34 billion at
June 30, 2023, and increased $291.6 million from $2.08 billion
at September 30, 2022. The increase in total real estate loans
at September 30, 2023, compared to the prior quarter reflects
increases in commercial real estate loans of $21.7
million, one-to-four-family loans (excluding loans HFS) of
$18.9 million, multi-family loans of $12.0 million, home
equity loans of $4.8 million, and consumer loans,
primarily indirect home improvement loans of $6.2
million. These increases were partially offset by an $8.0
million decrease in commercial business loans, primarily
as a result of a $7.2 million decrease in warehouse
lending.
Originations of one-to-four-family loans to purchase and
refinance a home for the periods indicated were as follows:
(Dollars in thousands) |
|
For the Three Months Ended |
|
|
For the Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023 |
|
|
June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
$ Change |
|
|
% Change |
|
Purchase |
|
$ |
139,345 |
|
|
|
92.1 |
% |
|
$ |
145,377 |
|
|
|
91.2 |
% |
|
$ |
(6,032 |
) |
|
|
(4.1 |
)% |
Refinance |
|
|
12,001 |
|
|
|
7.9 |
|
|
|
14,099 |
|
|
|
8.8 |
|
|
|
(2,098 |
) |
|
|
(14.8 |
) |
Total |
|
$ |
151,346 |
|
|
|
100.0 |
% |
|
$ |
159,476 |
|
|
|
100.0 |
% |
|
$ |
(8,130 |
) |
|
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
For the Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
$ Change |
|
|
% Change |
|
Purchase |
|
$ |
139,345 |
|
|
|
92.1 |
% |
|
$ |
172,639 |
|
|
|
89.1 |
% |
|
$ |
(33,294 |
) |
|
|
(19.3 |
)% |
Refinance |
|
|
12,001 |
|
|
|
7.9 |
|
|
|
21,096 |
|
|
|
10.9 |
|
|
|
(9,095 |
) |
|
|
(43.1 |
) |
Total |
|
$ |
151,346 |
|
|
|
100.0 |
% |
|
$ |
193,735 |
|
|
|
100.0 |
% |
|
$ |
(42,389 |
) |
|
|
(21.9 |
)% |
(Dollars in thousands) |
|
For the Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
$ Change |
|
|
% Change |
|
Purchase |
|
$ |
387,211 |
|
|
|
91.8 |
% |
|
$ |
549,259 |
|
|
|
78.7 |
% |
|
$ |
(162,048 |
) |
|
|
(29.5 |
)% |
Refinance |
|
|
34,635 |
|
|
|
8.2 |
|
|
|
148,335 |
|
|
|
21.3 |
|
|
|
(113,700 |
) |
|
|
(76.7 |
) |
Total |
|
$ |
421,846 |
|
|
|
100.0 |
% |
|
$ |
697,594 |
|
|
|
100.0 |
% |
|
$ |
(275,748 |
) |
|
|
(39.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in loan purchase and refinance activity, as well as
slower sales activity, compared to the comparable period
in 2022 reflects the impact of rising market interest rates
and low available housing inventory in our market areas.
During the quarter ended September 30, 2023, the Company sold
$117.6 million of one-to-four-family loans compared to $127.0
million during the previous quarter and $142.3 million during the
same quarter one year ago. Gross margins on home loan sales
increased to 3.08% for the quarter ended September 30, 2023,
compared to 3.07% in the previous quarter and increased from 2.85%
in the same quarter one year ago. Gross margins are defined as the
margin on loans sold (cash sales) without the impact of deferred
costs.
Liabilities and Equity Summary
Changes in deposits at the dates indicated were as follows:
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023 |
|
|
June 30, 2023 |
|
|
|
|
|
|
|
|
|
Transactional deposits: |
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
$ Change |
|
|
% Change |
|
Noninterest-bearing checking |
|
$ |
643,670 |
|
|
|
26.2 |
% |
|
$ |
658,440 |
|
|
|
27.9 |
% |
|
$ |
(14,770 |
) |
|
|
(2.2 |
)% |
Interest-bearing checking (1) |
|
|
219,468 |
|
|
|
8.9 |
|
|
|
183,012 |
|
|
|
7.7 |
|
|
|
36,456 |
|
|
|
19.9 |
|
Escrow accounts related to mortgages serviced (2) |
|
|
26,489 |
|
|
|
1.1 |
|
|
|
16,772 |
|
|
|
0.7 |
|
|
|
9,717 |
|
|
|
57.9 |
|
Subtotal |
|
|
889,627 |
|
|
|
36.2 |
|
|
|
858,224 |
|
|
|
36.3 |
|
|
|
31,403 |
|
|
|
3.7 |
|
Savings |
|
|
157,901 |
|
|
|
6.4 |
|
|
|
169,013 |
|
|
|
7.2 |
|
|
|
(11,112 |
) |
|
|
(6.6 |
) |
Money market (3) |
|
|
389,962 |
|
|
|
15.9 |
|
|
|
419,308 |
|
|
|
17.7 |
|
|
|
(29,346 |
) |
|
|
(7.0 |
) |
Subtotal |
|
|
547,863 |
|
|
|
22.3 |
|
|
|
588,321 |
|
|
|
24.9 |
|
|
|
(40,458 |
) |
|
|
(6.9 |
) |
Certificates of deposit less
than $100,000 (4) |
|
|
527,032 |
|
|
|
21.5 |
|
|
|
473,026 |
|
|
|
20.0 |
|
|
|
54,006 |
|
|
|
11.4 |
|
Certificates of deposit of
$100,000 through $250,000 |
|
|
406,545 |
|
|
|
16.6 |
|
|
|
358,238 |
|
|
|
15.1 |
|
|
|
48,307 |
|
|
|
13.5 |
|
Certificates of deposit of
$250,000 and over |
|
|
83,377 |
|
|
|
3.4 |
|
|
|
87,499 |
|
|
|
3.7 |
|
|
|
(4,122 |
) |
|
|
(4.7 |
) |
Subtotal |
|
|
1,016,954 |
|
|
|
41.5 |
|
|
|
918,763 |
|
|
|
38.8 |
|
|
|
98,191 |
|
|
|
10.7 |
|
Total |
|
$ |
2,454,444 |
|
|
|
100.0 |
% |
|
$ |
2,365,308 |
|
|
|
100.0 |
% |
|
$ |
89,136 |
|
|
|
3.8 |
% |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023 |
|
|
September 30, 2022 |
|
|
|
|
|
|
|
|
|
Transactional deposits: |
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
$ Change |
|
|
% Change |
|
Noninterest-bearing checking |
|
$ |
643,670 |
|
|
|
26.2 |
% |
|
$ |
555,753 |
|
|
|
26.7 |
% |
|
$ |
87,917 |
|
|
|
15.8 |
% |
Interest-bearing checking (1) |
|
|
219,468 |
|
|
|
8.9 |
|
|
|
147,968 |
|
|
|
7.1 |
|
|
|
71,500 |
|
|
|
48.3 |
|
Escrow accounts related to mortgages serviced (2) |
|
|
26,489 |
|
|
|
1.1 |
|
|
|
25,859 |
|
|
|
1.2 |
|
|
|
630 |
|
|
|
2.4 |
|
Subtotal |
|
|
889,627 |
|
|
|
36.2 |
|
|
|
729,580 |
|
|
|
35.0 |
|
|
|
160,047 |
|
|
|
21.9 |
|
Savings |
|
|
157,901 |
|
|
|
6.4 |
|
|
|
143,612 |
|
|
|
6.9 |
|
|
|
14,289 |
|
|
|
9.9 |
|
Money market (3) |
|
|
389,962 |
|
|
|
15.9 |
|
|
|
659,861 |
|
|
|
31.7 |
|
|
|
(269,899 |
) |
|
|
(40.9 |
) |
Subtotal |
|
|
547,863 |
|
|
|
22.3 |
|
|
|
803,473 |
|
|
|
38.6 |
|
|
|
(255,610 |
) |
|
|
(31.8 |
) |
Certificates of deposit less
than $100,000 (4) |
|
|
527,032 |
|
|
|
21.5 |
|
|
|
345,227 |
|
|
|
16.6 |
|
|
|
181,805 |
|
|
|
52.7 |
|
Certificates of deposit of
$100,000 through $250,000 |
|
|
406,545 |
|
|
|
16.6 |
|
|
|
133,429 |
|
|
|
6.4 |
|
|
|
273,116 |
|
|
|
204.7 |
|
Certificates of deposit of
$250,000 and over |
|
|
83,377 |
|
|
|
3.4 |
|
|
|
71,629 |
|
|
|
3.4 |
|
|
|
11,748 |
|
|
|
16.4 |
|
Subtotal |
|
|
1,016,954 |
|
|
|
41.5 |
|
|
|
550,285 |
|
|
|
26.4 |
|
|
|
466,669 |
|
|
|
84.8 |
|
Total |
|
$ |
2,454,444 |
|
|
|
100.0 |
% |
|
$ |
2,083,338 |
|
|
|
100.0 |
% |
|
$ |
371,106 |
|
|
|
17.8 |
% |
(1) |
Includes $50.1 million and $1.2 million of brokered deposits
at September 30, 2023, and 2022, respectively, and no
brokered deposits as of June 30, 2023. |
(2) |
Noninterest-bearing accounts. |
(3) |
Includes $51,000, $51,000 and $66.8 million of brokered
deposits at September 30, 2023, June 30, 2023 and September
30, 2022, respectively. |
(4) |
Includes $323.3 million, $295.7 million and $256.6
million of brokered deposits at September 30, 2023, June 30,
2023 and September 30, 2022, respectively. |
|
|
At September 30, 2023, CDs, which include retail and nonretail
CDs, totaled $1.02 billion, compared to $918.8 million at June 30,
2023 and $550.3 million at September 30, 2022, with nonretail CDs
representing 33.2%, 33.7% and 51.7% of total CDs at such dates,
respectively. At September 30, 2023, nonretail CDs, which include
brokered CDs, online CDs and public funds CDs, increased
$27.2 million to $337.2 million, compared to $310.0
million at June 30, 2023, primarily due to an increase of
$27.6 million in brokered CDs. Nonretail CDs totaled
$337.2 million at September 30, 2023, compared to $284.4
million at September 30, 2022.
At September 30, 2023, the Bank had uninsured deposits of
approximately $591.6 million, compared to
approximately $587.6 million at June 30, 2023, and
$600.4 million at September 30, 2022. The uninsured
amounts are estimates based on the methodologies and assumptions
used for the Bank's regulatory reporting requirements.
At September 30, 2023, borrowings totaled $121.9 million and
were comprised of advances from the Federal Reserve Bank's Term
Funding Program of $90.0 million, overnight borrowings of $28.0
million, and FHLB fixed-rate advances of $3.9 million.
Borrowings decreased $78.0 million to $121.9 million at September
30, 2023, from $199.9 million at June 30, 2023, and decreased
$138.9 million at from $260.8 million at September 30, 2022.
The decrease was partially attributable to a shift in funding mix
to brokered CDs.
Total stockholders’ equity increased $732,000 to
$250.7 million at September 30, 2023, from $249.9 million at
June 30, 2023, and increased $30.1 million, from $220.5
million at September 30, 2022. The increase in stockholders’ equity
at September 30, 2023, compared to June 30, 2023,
reflects net income of $9.0 million, partially offset by
dividends paid of $1.9 million. In addition, stockholders’ equity
was negatively impacted by unrealized net losses in securities
available for sale of $9.2 million, net of tax, partially
offset by unrealized net gains on fair value and cash flow
hedges of $2.3 million, net of tax, reflecting changes in
market interest rates during the quarter, resulting in a $7.0
million increase in accumulated other comprehensive loss. Book
value per common share was $32.58 at September 30, 2023,
compared to $32.71 at June 30, 2023, and $29.07 at September 30,
2022.
The Bank is considered well capitalized under the capital
requirements established by the Federal Deposit Insurance
Corporation (“FDIC”) with a total risk-based capital ratio of
13.1%, a Tier 1 leverage capital ratio of 10.3%, and a common
equity Tier 1 (“CET1”) capital ratio of 11.8% at September 30,
2023.
The Company exceeded all regulatory capital requirements with a
total risk-based capital ratio of 13.4%, a Tier 1 leverage capital
ratio of 8.9%, and a CET1 ratio of 10.2% at September 30, 2023.
Credit Quality
The allowance for credit losses on loans (“ACLL”) totaled to
$30.5 million, or 1.27% of gross loans receivable (excluding
loans HFS) at September 30, 2023, compared to $30.4 million, or
1.28% of gross loans receivable (excluding loans HFS), at June
30, 2023, and $26.4 million, or 1.25% of gross loans receivable
(excluding loans HFS), at September 30, 2022. The $151,000 increase
in the ACLL at September 30, 2023, compared to the prior quarter
was primarily due to an increase in loans. The $4.1 million
increase in the ACLL at September 30, 2023, compared to the
prior year was primarily due to organic loan growth and the
addition of loans acquired in the Branch Acquisition. The allowance
for credit losses on unfunded loan commitments decreased
$149,000 to $1.8 million at September 30, 2023, compared
to $1.9 million at June 30, 2023, and decreased $1.3 million
from $3.1 million at September 30, 2022. The decreases
were attributable to a decline in unfunded construction loan
commitments at September 30, 2023.
Nonperforming loans decreased $3.7 million to
$5.6 million at September 30, 2023, compared to $9.3 million
at June 30, 2023, and decreased $2.6 million from $8.2 million
at September 30, 2022. The decrease in nonperforming loans
at September 30, 2023, from the prior quarter was primarily
due to decreases in nonperforming commercial business loans of
$3.5 million and indirect home improvement loans of $165,000.
The decrease in nonperforming loans compared to the prior
year was primarily due to decreases in commercial business
loans of $4.3 million and one-to-four-family loans of
$535,000, partially offset by increases in commercial real
estate loans of $1.1 million, indirect home improvement loans of
$1.0 million, and marine loans of $225,000. The decrease in the
nonperforming commercial business loans between the periods
was primarily attributable to a $3.5 million loan being upgraded to
performing from nonperforming status.
Loans classified as substandard increased $2.8 million to
$19.2 million at September 30, 2023, compared to $16.4 million
at June 30, 2023, and increased $2.5 million from $16.6
million at September 30, 2022. The increase in substandard loans
at September 30, 2023 compared to the prior quarter was
primarily attributable to increases of $1.7 million in
commercial real estate loans and $956,000 in
one-to-four-family loans and compared to the prior year was
primarily due to increases of $2.2 million in one-to-four-family
loans, $1.0 million in indirect home improvement loans, and
$225,000 in marine loans, partially offset by a decrease of
$928,000 in commercial business loans. There was one
other real estate owned property (“OREO”) in the amount of $570,000
(a closed branch in Centralia, Washington) at both September 30,
2023 and June 30, 2023, compared to one OREO in the amount of
$145,000 at September 30, 2022.
Operating Results
Net interest income increased $3.1 million to
$30.6 million for the three months ended September 30, 2023,
from $27.5 million for the three months ended September 30, 2022,
primarily as a result of an increase in interest income on
loans. Total interest income for the three months ended September
30, 2023, increased $12.0 million compared to the same period
last year, primarily due to an increase of $10.3 million in
interest income on loans receivable, including fees, impacted
primarily as a result of new loans being originated at higher
rates and variable rate loans repricing higher following
recent increases in market interest rates. Total interest
expense for the three months ended September 30, 2023,
increased $8.9 million compared to the same period last year,
primarily as a result of higher market interest rates, higher
utilization of borrowings and a shift in deposit mix from
transactional accounts to higher cost CDs.
For the nine months ended September 30, 2023, net interest
income increased $17.9 million to $92.8 million, from
$75.0 million for the nine months ended September 30, 2022,
for the same reasons described above for the three-month
comparison, with an increase in interest income of
$39.9 million and an increase in interest expense of
$22.0 million.
NIM (annualized) decreased 20 basis points to 4.34% for the
three months ended September 30, 2023, from 4.54% for the same
period in the prior year and increased 17 basis points to
4.56% for the nine months ended September 30, 2023, from 4.39% for
the nine months ended September 30, 2022. The changes in NIM
for the three and nine months ended September 30, 2023
compared to the same period in 2022, reflects new loan
originations at higher market interest rates and variable rate
interest-earning assets repricing higher following recent increases
in market interest rates, offset by the rising cost of deposits and
borrowings. The benefit from higher rates and interest earning
assets were partially offset by rising deposit and borrowing costs.
Increases in average balances of higher costing CDs and borrowings
placed additional pressure on the NIM, which resulted in a decrease
for the three months ended September 30, 2023, compared to the
same period in 2022.
The average total cost of funds, including noninterest-bearing
checking, increased 124 basis points to 1.92% for the three
months ended September 30, 2023, from 0.68% for the three months
ended September 30, 2022. This increase was predominantly due to
the rise in cost for market rates for deposits. The average cost of
funds increased 108 basis points to 1.58% for the nine months
ended September 30, 2023, from 0.50% for the nine months ended
September 30, 2022, also reflecting increases in market interest
rates over last year. Management remains focused on matching
deposit/liability duration with the duration of loans/assets where
appropriate.
For the three and nine months ended September 30, 2023, the
provision for credit losses on loans was $683,000 and
$4.1 million, respectively, compared to $2.0 million and $4.5
million for the three and nine months ended September 30, 2022. The
provision for credit losses on loans reflects an increase in total
loans receivable and net charge-offs in indirect home improvement
and marine loans.
During the three months ended September 30, 2023, net
charge-offs totaled $531,000, compared to $563,000 for the same
period last year, primarily due to decreased net charge-offs of
$388,000 in deposit overdrafts and $35,000 in
marine loans, partially offset by net increases of $387,000 in
indirect home improvement loans and $3,000 in other loans. Net
charge-offs totaled $1.6 million during the nine months ended
September 30, 2023, compared to $843,000 during the nine months
ended September 30, 2022. This increase was primarily due to net
charge-off increases of $972,000 in indirect home improvement
loans, $164,000 in marine loans, $10,000 in home
equity loans, and $2,000 in other loans, partially offset by a
net decrease of $400,000 in deposit overdrafts charge-offs.
Management attributes the increase in net charge-offs over the
year primarily to volatile economic conditions.
Noninterest income increased $801,000 to
$5.0 million for the three months ended September 30,
2023, from $4.2 million for the three months ended September 30,
2022. The increase reflects a $1.4 million increase in service
charges and fee income, primarily as a result of less amortization
of mortgage servicing rights reflecting increased market interest
rates and increased servicing fees from non-portfolio serviced
loans, and an increase of $473,000 in gain on sale of loans,
partially offset by a $1.1 million decrease in other
noninterest income. Noninterest income increased $622,000, to
$15.0 million, for the nine months ended September 30, 2023,
from $14.4 million for the nine months ended September 30, 2022.
This increase was primarily the result of a $4.1 million
increase in service charges and fee income, partially offset by
decreases of $2.0 million in gain on sale of loans and $1.4
million in other noninterest income.
Noninterest expense increased $4.2 million to
$23.6 million for the three months ended September 30, 2023,
from $19.3 million for the three months ended September 30, 2022.
The increase in noninterest expense was primarily a result of a
$2.1 million increase in salaries and benefits largely due to
the Branch Acquisition and growth in FTEs. Other increases included
$829,000 in amortization of CDI, $597,000 in operations
expense, $293,000 in data processing, $244,000 in
occupancy expense, and $232,000 in marketing and advertising,
offset by a decrease of $182,000 in loan costs.
Noninterest expense increased $14.0 million to
$71.3 million for the nine months ended September 30, 2023,
from $57.3 million for the nine months ended September 30,
2022 primarily for the same reasons stated above. Increases during
the nine-month period ended September 30, 2023,as compared to
the same period last year included $5.8 million in salaries
and benefits, $2.1 million in operations, $2.0 million in
amortization of CDI, $1.6 million in acquisition costs,
$928,000 in FDIC insurance, $845,000 in
occupancy, $729,000 in data processing, and $420,000 in
marketing and advertising, offset by a decrease of $386,000 in
professional and board fees.
About FS Bancorp
FS Bancorp, Inc., a Washington corporation, is the holding
company for 1st Security Bank. The Bank provides loan and deposit
services to customers who are predominantly small- and
middle-market businesses and individuals in Washington and Oregon
through its 27 Bank branches, one headquarters office that produces
loans and accepts deposits, and loan production offices in various
suburban communities in the greater Puget Sound area, the
Kennewick-Pasco-Richland metropolitan area of Washington, also
known as the Tri-Cities, and in Vancouver, Washington. The Bank
services home mortgage customers throughout the Northwest
predominantly in Washington State including the Puget Sound,
Tri-Cities and Vancouver home lending markets.
Forward-Looking Statements
When used in this press release and in other documents filed
with or furnished to the Securities and Exchange Commission (the
“SEC”), in press releases or other public stockholder
communications, or in oral statements made with the approval of an
authorized executive officer, the words or phrases “believe,”
“will,” “will likely result,” “are expected to,” “will continue,”
“is anticipated,” “estimate,” “project,” “plans,” or similar
expressions are intended to identify “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are not historical facts but
instead represent management's current expectations and forecasts
regarding future events, many of which are inherently uncertain and
outside of our control. Actual results may differ, possibly
materially from those currently expected or projected in these
forward-looking statements. Factors that could cause the Company’s
actual results to differ materially from those described in the
forward-looking statements, include but are not limited to, the
following: potential adverse impacts to economic conditions in the
Company’s local market areas, other markets where the Company has
lending relationships, or other aspects of the Company’s business
operations or financial markets, including, without limitation, as
a result of employment levels; labor shortages, the effects of
inflation, a potential recession or slowed economic
growth; changes in the interest rate environment, including
the recent increases in the Federal Reserve benchmark rate and
duration at which such increased interest rate levels are
maintained, which could adversely affect our revenues and expenses,
the values of our assets and obligations, and the availability and
cost of capital and liquidity; the impact of continuing high
inflation and the current and future monetary policies of the
Federal Reserve in response thereto; the effects of any federal
government shutdown; increased competitive pressures, changes
in the interest rate environment, adverse changes in the securities
markets, the Company’s ability to successfully realize the
anticipated benefits of the Branch Acquisition, including customer
acquisition and retention; the Company’s ability to execute its
plans to grow its residential construction lending, mortgage
banking, and warehouse lending operations, and the geographic
expansion of its indirect home improvement lending; challenges
arising from expanding into new geographic markets, products, or
services; secondary market conditions for loans and the Company’s
ability to originate loans for sale and sell loans in the secondary
market; fluctuations in deposits; liquidity issues, including our
ability to borrow funds or raise additional capital, if necessary;
the impact of bank failures or adverse developments at other banks
and related negative press about the banking industry in general on
investor and depositor sentiment; legislative and regulatory
changes, including changes in banking, securities and tax law, in
regulatory policies and principles, or the interpretation of
regulatory capital or other rules; disruptions, security
breaches, or other adverse events, failures or interruptions in, or
attacks on, our information technology systems or on the
third-party vendors who perform critical processing functions for
us; the effects of climate change, severe weather events, natural
disasters, pandemics, epidemics and other public health crises,
acts of war or terrorism, and other external events on our
business; and other factors described in the Company’s latest
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
other reports filed with and furnished to the SEC which are
available on its website at www.fsbwa.com and on the SEC's website
at www.sec.gov. Any of the forward-looking statements that the
Company makes in this press release and in the other public
statements are based upon management's beliefs and assumptions at
the time they are made and may turn out to be incorrect because of
the inaccurate assumptions the Company might make, because of the
factors illustrated above or because of other factors that cannot
be foreseen by the Company. Therefore, these factors should be
considered in evaluating the forward-looking statements, and undue
reliance should not be placed on such statements. The Company does
not undertake and specifically disclaims 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 the Company’s actual
results for 2023 and beyond to differ materially from those
expressed in any forward-looking statements made by, or on behalf
of the Company and could negatively affect its operating and stock
performance.
FS BANCORP, INC. AND
SUBSIDIARYCONSOLIDATED BALANCE
SHEETS(Dollars in thousands, except share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Linked |
|
|
Year |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
Quarter |
|
|
Over Year |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
% Change |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
18,137 |
|
|
$ |
17,573 |
|
|
$ |
11,541 |
|
|
|
3 |
|
|
|
57 |
|
Interest-bearing deposits at other financial institutions |
|
|
62,536 |
|
|
|
114,526 |
|
|
|
148,256 |
|
|
|
(45 |
) |
|
|
(58 |
) |
Total cash and cash equivalents |
|
|
80,673 |
|
|
|
132,099 |
|
|
|
159,797 |
|
|
|
(39 |
) |
|
|
(50 |
) |
Certificates of deposit at other financial institutions |
|
|
17,636 |
|
|
|
14,747 |
|
|
|
4,960 |
|
|
|
20 |
|
|
|
256 |
|
Securities available-for-sale, at fair value |
|
|
251,917 |
|
|
|
225,869 |
|
|
|
227,942 |
|
|
|
12 |
|
|
|
11 |
|
Securities held-to-maturity, net |
|
|
8,455 |
|
|
|
8,469 |
|
|
|
8,469 |
|
|
|
— |
|
|
|
— |
|
Loans held for sale, at fair value |
|
|
18,636 |
|
|
|
16,714 |
|
|
|
23,447 |
|
|
|
11 |
|
|
|
(21 |
) |
Loans receivable, net |
|
|
2,375,572 |
|
|
|
2,342,424 |
|
|
|
2,083,929 |
|
|
|
1 |
|
|
|
14 |
|
Accrued interest receivable |
|
|
13,925 |
|
|
|
12,244 |
|
|
|
10,407 |
|
|
|
14 |
|
|
|
34 |
|
Premises and equipment, net |
|
|
30,926 |
|
|
|
31,293 |
|
|
|
25,438 |
|
|
|
(1 |
) |
|
|
22 |
|
Operating lease right-of-use |
|
|
7,042 |
|
|
|
7,458 |
|
|
|
6,607 |
|
|
|
(6 |
) |
|
|
7 |
|
Federal Home Loan Bank stock, at cost |
|
|
3,696 |
|
|
|
6,555 |
|
|
|
13,591 |
|
|
|
(44 |
) |
|
|
(73 |
) |
Other real estate owned |
|
|
570 |
|
|
|
570 |
|
|
|
145 |
|
|
|
— |
|
|
|
293 |
|
Deferred tax asset, net |
|
|
7,424 |
|
|
|
5,784 |
|
|
|
6,571 |
|
|
|
28 |
|
|
|
13 |
|
Bank owned life insurance (“BOLI”), net |
|
|
37,480 |
|
|
|
37,247 |
|
|
|
36,578 |
|
|
|
1 |
|
|
|
2 |
|
Servicing rights, held at the lower of cost or fair value |
|
|
17,657 |
|
|
|
17,627 |
|
|
|
18,470 |
|
|
|
— |
|
|
|
(4 |
) |
Goodwill |
|
|
3,592 |
|
|
|
3,592 |
|
|
|
2,312 |
|
|
|
— |
|
|
|
55 |
|
Core deposit intangible, net |
|
|
18,323 |
|
|
|
19,325 |
|
|
|
3,542 |
|
|
|
(5 |
) |
|
|
417 |
|
Other assets |
|
|
26,548 |
|
|
|
23,604 |
|
|
|
19,933 |
|
|
|
12 |
|
|
|
33 |
|
TOTAL
ASSETS |
|
$ |
2,920,072 |
|
|
$ |
2,905,621 |
|
|
$ |
2,652,138 |
|
|
|
— |
|
|
|
10 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing accounts |
|
$ |
670,158 |
|
|
$ |
675,211 |
|
|
$ |
581,612 |
|
|
|
(1 |
) |
|
|
15 |
|
Interest-bearing accounts |
|
|
1,784,286 |
|
|
|
1,690,097 |
|
|
|
1,501,726 |
|
|
|
6 |
|
|
|
19 |
|
Total deposits |
|
|
2,454,444 |
|
|
|
2,365,308 |
|
|
|
2,083,338 |
|
|
|
4 |
|
|
|
18 |
|
Borrowings |
|
|
121,895 |
|
|
|
199,896 |
|
|
|
260,828 |
|
|
|
(39 |
) |
|
|
(53 |
) |
Subordinated notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal amount |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
50,000 |
|
|
|
— |
|
|
|
— |
|
Unamortized debt issuance costs |
|
|
(489 |
) |
|
|
(506 |
) |
|
|
(556 |
) |
|
|
(3 |
) |
|
|
(12 |
) |
Total subordinated notes less unamortized debt issuance costs |
|
|
49,511 |
|
|
|
49,494 |
|
|
|
49,444 |
|
|
|
— |
|
|
|
— |
|
Operating lease liability |
|
|
7,269 |
|
|
|
7,690 |
|
|
|
6,836 |
|
|
|
(5 |
) |
|
|
6 |
|
Other liabilities |
|
|
36,288 |
|
|
|
33,300 |
|
|
|
31,145 |
|
|
|
9 |
|
|
|
17 |
|
Total liabilities |
|
|
2,669,407 |
|
|
|
2,655,688 |
|
|
|
2,431,591 |
|
|
|
1 |
|
|
|
10 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value; 5,000,000 shares authorized; none
issued or outstanding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock, $.01 par value; 45,000,000 shares authorized;
7,796,095 shares issued and outstanding at September 30, 2023,
7,753,607 at June 30, 2023, and 7,704,373 at September 30,
2022 |
|
|
78 |
|
|
|
77 |
|
|
|
77 |
|
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
57,464 |
|
|
|
56,781 |
|
|
|
53,769 |
|
|
|
1 |
|
|
|
7 |
|
Retained earnings |
|
|
222,532 |
|
|
|
215,519 |
|
|
|
195,986 |
|
|
|
3 |
|
|
|
14 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(29,409 |
) |
|
|
(22,444 |
) |
|
|
(29,285 |
) |
|
|
31 |
|
|
|
— |
|
Total stockholders’ equity |
|
|
250,665 |
|
|
|
249,933 |
|
|
|
220,547 |
|
|
|
— |
|
|
|
14 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
2,920,072 |
|
|
$ |
2,905,621 |
|
|
$ |
2,652,138 |
|
|
|
— |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS BANCORP, INC. AND
SUBSIDIARYCONSOLIDATED STATEMENTS OF
INCOME(Dollars in thousands, except per share amounts)
(Unaudited)
|
|
Three Months Ended |
|
|
Qtr |
|
|
Year |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
Over Qtr |
|
|
Over Year |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
% Change |
|
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, including
fees |
|
$ |
39,874 |
|
|
$ |
38,216 |
|
|
$ |
29,563 |
|
|
|
4 |
|
|
|
35 |
|
Interest and dividends on
investment securities, cash and cash equivalents, and certificates
of deposit at other financial institutions |
|
|
3,396 |
|
|
|
2,651 |
|
|
|
1,741 |
|
|
|
28 |
|
|
|
95 |
|
Total interest and dividend income |
|
|
43,270 |
|
|
|
40,867 |
|
|
|
31,304 |
|
|
|
6 |
|
|
|
38 |
|
INTEREST
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
10,462 |
|
|
|
7,610 |
|
|
|
2,596 |
|
|
|
37 |
|
|
|
303 |
|
Borrowings |
|
|
1,689 |
|
|
|
1,219 |
|
|
|
696 |
|
|
|
39 |
|
|
|
143 |
|
Subordinated notes |
|
|
485 |
|
|
|
486 |
|
|
|
485 |
|
|
|
— |
|
|
|
— |
|
Total interest expense |
|
|
12,636 |
|
|
|
9,315 |
|
|
|
3,777 |
|
|
|
36 |
|
|
|
235 |
|
NET INTEREST
INCOME |
|
|
30,634 |
|
|
|
31,552 |
|
|
|
27,527 |
|
|
|
(3 |
) |
|
|
11 |
|
PROVISION FOR CREDIT
LOSSES |
|
|
548 |
|
|
|
716 |
|
|
|
1,718 |
|
|
|
(23 |
) |
|
|
(68 |
) |
NET INTEREST INCOME
AFTER PROVISION FOR CREDIT LOSSES |
|
|
30,086 |
|
|
|
30,836 |
|
|
|
25,809 |
|
|
|
(2 |
) |
|
|
17 |
|
NONINTEREST
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fee
income |
|
|
2,882 |
|
|
|
2,862 |
|
|
|
1,511 |
|
|
|
1 |
|
|
|
91 |
|
Gain on sale of loans |
|
|
1,875 |
|
|
|
1,947 |
|
|
|
1,402 |
|
|
|
(4 |
) |
|
|
34 |
|
Earnings on cash surrender
value of BOLI |
|
|
233 |
|
|
|
227 |
|
|
|
221 |
|
|
|
3 |
|
|
|
5 |
|
Other noninterest income |
|
|
(8 |
) |
|
|
(203 |
) |
|
|
1,047 |
|
|
|
(96 |
) |
|
|
(101 |
) |
Total noninterest income |
|
|
4,982 |
|
|
|
4,833 |
|
|
|
4,181 |
|
|
|
3 |
|
|
|
19 |
|
NONINTEREST
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
13,503 |
|
|
|
13,513 |
|
|
|
11,402 |
|
|
|
— |
|
|
|
18 |
|
Operations |
|
|
3,409 |
|
|
|
3,643 |
|
|
|
2,812 |
|
|
|
(6 |
) |
|
|
21 |
|
Occupancy |
|
|
1,588 |
|
|
|
1,562 |
|
|
|
1,344 |
|
|
|
2 |
|
|
|
18 |
|
Data processing |
|
|
1,841 |
|
|
|
1,683 |
|
|
|
1,548 |
|
|
|
9 |
|
|
|
19 |
|
Loan costs |
|
|
564 |
|
|
|
1,043 |
|
|
|
746 |
|
|
|
(46 |
) |
|
|
(24 |
) |
Professional and board
fees |
|
|
666 |
|
|
|
657 |
|
|
|
631 |
|
|
|
1 |
|
|
|
6 |
|
Federal Deposit Insurance
Corporation (“FDIC”) insurance |
|
|
561 |
|
|
|
591 |
|
|
|
462 |
|
|
|
(5 |
) |
|
|
21 |
|
Marketing and advertising |
|
|
452 |
|
|
|
430 |
|
|
|
220 |
|
|
|
5 |
|
|
|
105 |
|
Acquisition costs |
|
|
— |
|
|
|
61 |
|
|
|
— |
|
|
|
NM |
|
|
|
— |
|
Amortization of core deposit
intangible |
|
|
1,002 |
|
|
|
1,023 |
|
|
|
173 |
|
|
|
(2 |
) |
|
|
479 |
|
Recovery of servicing
rights |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
NM |
|
|
|
— |
|
Total noninterest expense |
|
|
23,586 |
|
|
|
24,204 |
|
|
|
19,338 |
|
|
|
(3 |
) |
|
|
22 |
|
INCOME BEFORE
PROVISION FOR INCOME TAXES |
|
|
11,482 |
|
|
|
11,465 |
|
|
|
10,652 |
|
|
|
— |
|
|
|
8 |
|
PROVISION FOR INCOME
TAXES |
|
|
2,529 |
|
|
|
2,349 |
|
|
|
2,194 |
|
|
|
8 |
|
|
|
15 |
|
NET
INCOME |
|
$ |
8,953 |
|
|
$ |
9,116 |
|
|
$ |
8,458 |
|
|
|
(2 |
) |
|
|
6 |
|
Basic earnings per share |
|
$ |
1.15 |
|
|
$ |
1.17 |
|
|
$ |
1.09 |
|
|
|
(2 |
) |
|
|
6 |
|
Diluted earnings per
share |
|
$ |
1.13 |
|
|
$ |
1.16 |
|
|
$ |
1.08 |
|
|
|
(3 |
) |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FS BANCORP, INC. AND
SUBSIDIARYCONSOLIDATED STATEMENTS OF
INCOME(Dollars in thousands, except per share amounts)
(Unaudited)
|
|
Nine Months Ended |
|
|
Year |
|
|
|
September 30, |
|
|
September 30, |
|
|
Over Year |
|
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, including
fees |
|
$ |
114,082 |
|
|
$ |
77,885 |
|
|
|
46 |
|
Interest and dividends on
investment securities, cash and cash equivalents, and certificates
of deposit at other financial institutions |
|
|
8,667 |
|
|
|
4,990 |
|
|
|
74 |
|
Total interest and dividend income |
|
|
122,749 |
|
|
|
82,875 |
|
|
|
48 |
|
INTEREST
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
24,696 |
|
|
|
5,438 |
|
|
|
354 |
|
Borrowings |
|
|
3,749 |
|
|
|
1,003 |
|
|
|
274 |
|
Subordinated note |
|
|
1,456 |
|
|
|
1,456 |
|
|
|
— |
|
Total interest expense |
|
|
29,901 |
|
|
|
7,897 |
|
|
|
279 |
|
NET INTEREST
INCOME |
|
|
92,848 |
|
|
|
74,978 |
|
|
|
24 |
|
PROVISION FOR CREDIT
LOSSES |
|
|
3,372 |
|
|
|
4,632 |
|
|
|
(27 |
) |
NET INTEREST INCOME
AFTER PROVISION FOR CREDIT LOSSES |
|
|
89,476 |
|
|
|
70,346 |
|
|
|
27 |
|
NONINTEREST
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fee
income |
|
|
8,352 |
|
|
|
4,286 |
|
|
|
95 |
|
Gain on sale of loans |
|
|
5,298 |
|
|
|
7,325 |
|
|
|
(28 |
) |
Earnings on cash surrender
value of BOLI |
|
|
681 |
|
|
|
654 |
|
|
|
4 |
|
Other noninterest income |
|
|
703 |
|
|
|
2,147 |
|
|
|
(67 |
) |
Total noninterest income |
|
|
15,034 |
|
|
|
14,412 |
|
|
|
4 |
|
NONINTEREST
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
40,880 |
|
|
|
35,110 |
|
|
|
16 |
|
Operations |
|
|
9,744 |
|
|
|
7,656 |
|
|
|
27 |
|
Occupancy |
|
|
4,670 |
|
|
|
3,825 |
|
|
|
22 |
|
Data processing |
|
|
5,092 |
|
|
|
4,363 |
|
|
|
17 |
|
Loan costs |
|
|
2,077 |
|
|
|
2,020 |
|
|
|
3 |
|
Professional and board
fees |
|
|
2,001 |
|
|
|
2,387 |
|
|
|
(16 |
) |
FDIC insurance |
|
|
1,732 |
|
|
|
804 |
|
|
|
115 |
|
Marketing and advertising |
|
|
1,072 |
|
|
|
652 |
|
|
|
64 |
|
Acquisition costs |
|
|
1,562 |
|
|
|
— |
|
|
|
— |
|
Amortization of core deposit
intangible |
|
|
2,484 |
|
|
|
518 |
|
|
|
380 |
|
Recovery of servicing
rights |
|
|
— |
|
|
|
(1 |
) |
|
|
NM |
|
Total noninterest expense |
|
|
71,314 |
|
|
|
57,334 |
|
|
|
24 |
|
INCOME BEFORE
PROVISION FOR INCOME TAXES |
|
|
33,196 |
|
|
|
27,424 |
|
|
|
21 |
|
PROVISION FOR INCOME
TAXES |
|
|
6,915 |
|
|
|
5,397 |
|
|
|
28 |
|
NET
INCOME |
|
$ |
26,281 |
|
|
$ |
22,027 |
|
|
|
19 |
|
Basic earnings per share |
|
$ |
3.38 |
|
|
$ |
2.77 |
|
|
|
22 |
|
Diluted earnings per
share |
|
$ |
3.33 |
|
|
$ |
2.73 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY FINANCIAL RATIOS AND DATA (Unaudited)
|
|
For the Three Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
PERFORMANCE RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on assets (ratio of net income to average total assets)
(1) |
|
|
1.22 |
% |
|
|
1.29 |
% |
|
|
1.36 |
% |
Return on equity (ratio of net income to average equity) (1) |
|
|
13.81 |
|
|
|
14.82 |
|
|
|
14.72 |
|
Yield on average interest-earning assets (1) |
|
|
6.13 |
|
|
|
6.04 |
|
|
|
5.16 |
|
Average total cost of funds (1) |
|
|
1.92 |
|
|
|
1.48 |
|
|
|
0.68 |
|
Interest rate spread information – average during period |
|
|
4.21 |
|
|
|
4.56 |
|
|
|
4.48 |
|
Net interest margin (1) |
|
|
4.34 |
|
|
|
4.66 |
|
|
|
4.54 |
|
Operating expense to average total assets (1) |
|
|
3.23 |
|
|
|
3.42 |
|
|
|
3.10 |
|
Average interest-earning assets to average interest-bearing
liabilities (1) |
|
|
145.14 |
|
|
|
147.90 |
|
|
|
147.92 |
|
Efficiency ratio (2) |
|
|
66.22 |
|
|
|
66.52 |
|
|
|
60.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
PERFORMANCE RATIOS: |
|
|
|
|
|
|
|
|
Return on assets (ratio of net income to average total assets)
(1) |
|
|
1.25 |
% |
|
|
1.25 |
% |
Return on equity (ratio of net income to average equity) (1) |
|
|
14.13 |
|
|
|
12.51 |
|
Yield on average interest-earning assets (1) |
|
|
6.03 |
|
|
|
4.86 |
|
Average total cost of funds (1) |
|
|
1.58 |
|
|
|
0.50 |
|
Interest rate spread information – average during period |
|
|
4.45 |
|
|
|
4.36 |
|
Net interest margin (1) |
|
|
4.56 |
|
|
|
4.39 |
|
Operating expense to average total assets (1) |
|
|
3.39 |
|
|
|
3.25 |
|
Average interest-earning assets to average interest-bearing
liabilities |
|
|
146.23 |
|
|
|
151.52 |
|
Efficiency ratio (2) |
|
|
66.10 |
|
|
|
64.14 |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
ASSET QUALITY RATIOS AND DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets at end of period (3) |
|
|
0.21 |
% |
|
|
0.34 |
% |
|
|
0.32 |
% |
Nonperforming loans to total gross loans (excluding loans held for
sale) (4) |
|
|
0.23 |
|
|
|
0.39 |
|
|
|
0.39 |
|
Allowance for credit losses – loans to nonperforming loans (4) |
|
|
493.46 |
|
|
|
327.75 |
|
|
|
315.35 |
|
Allowance for credit losses – loans to total gross loans (excluding
loans held for sale) |
|
|
1.27 |
|
|
|
1.28 |
|
|
|
1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
PER COMMON SHARE DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.15 |
|
|
$ |
1.17 |
|
|
$ |
1.09 |
|
Diluted earnings per share |
|
$ |
1.13 |
|
|
$ |
1.16 |
|
|
$ |
1.08 |
|
Weighted average basic shares outstanding |
|
|
7,667,981 |
|
|
|
7,637,210 |
|
|
|
7,605,360 |
|
Weighted average diluted shares outstanding |
|
|
7,780,430 |
|
|
|
7,746,336 |
|
|
|
7,707,762 |
|
Common shares outstanding at end of period |
|
|
7,693,951 |
(5) |
|
|
7,641,342 |
(6) |
|
|
7,585,843 |
(7) |
Book value per share using common shares outstanding |
|
$ |
32.58 |
|
|
$ |
32.71 |
|
|
$ |
29.07 |
|
Tangible book value per share using common shares outstanding
(8) |
|
$ |
29.73 |
|
|
$ |
29.71 |
|
|
$ |
28.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Annualized. |
(2) |
Total noninterest expense as a percentage of net interest
income and total noninterest income. |
(3) |
Nonperforming assets consist of nonperforming loans (which
include nonaccruing loans and accruing loans more than 90 days past
due), foreclosed real estate and other repossessed assets. |
(4) |
Nonperforming loans consist of nonaccruing loans and accruing
loans 90 days or more past due. |
(5) |
Common shares were calculated using shares outstanding of
7,796,095 at September 30, 2023, less 102,144 unvested
restricted stock shares. |
(6) |
Common shares were calculated using shares outstanding of
7,753,607 at June 30, 2023, less 112,265 unvested restricted stock
shares. |
(7) |
Common shares were calculated using shares outstanding of
7,704,373 at September 30, 2022, less 118,530 unvested restricted
stock shares. |
(8) |
Represents a non-GAAP financial measure. See “Non-GAAP
Financial Measures” below. |
|
|
(Dollars in thousands) |
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
QTR Over QTR |
|
|
Year Over Year |
|
Average Balances |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
$ Change |
|
|
$ Change |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net (1) |
|
$ |
2,423,691 |
|
|
$ |
2,083,561 |
|
|
$ |
2,362,885 |
|
|
$ |
1,953,305 |
|
|
$ |
340,130 |
|
|
$ |
409,580 |
|
Securities available-for-sale,
at amortized cost |
|
|
294,148 |
|
|
|
277,006 |
|
|
|
276,835 |
|
|
|
279,395 |
|
|
|
17,142 |
|
|
|
(2,560 |
) |
Securities
held-to-maturity |
|
|
8,500 |
|
|
|
8,500 |
|
|
|
8,500 |
|
|
|
7,943 |
|
|
|
- |
|
|
|
557 |
|
Interest-bearing deposits and
certificates of deposit at other financial institutions |
|
|
68,369 |
|
|
|
29,080 |
|
|
|
67,163 |
|
|
|
34,705 |
|
|
|
39,289 |
|
|
|
32,458 |
|
FHLB stock, at cost |
|
|
4,626 |
|
|
|
7,924 |
|
|
|
5,190 |
|
|
|
5,716 |
|
|
|
(3,298 |
) |
|
|
(526 |
) |
Total interest-earning assets |
|
|
2,799,334 |
|
|
|
2,406,071 |
|
|
|
2,720,573 |
|
|
|
2,281,064 |
|
|
|
393,263 |
|
|
|
439,509 |
|
Noninterest-earning
assets |
|
|
102,052 |
|
|
|
93,911 |
|
|
|
88,936 |
|
|
|
95,302 |
|
|
|
8,141 |
|
|
|
(6,366 |
) |
Total
assets |
|
$ |
2,901,386 |
|
|
$ |
2,499,982 |
|
|
$ |
2,809,509 |
|
|
$ |
2,376,366 |
|
|
$ |
401,404 |
|
|
$ |
433,143 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing accounts |
|
$ |
1,741,257 |
|
|
$ |
1,458,047 |
|
|
$ |
1,703,688 |
|
|
$ |
1,391,181 |
|
|
$ |
283,210 |
|
|
$ |
312,507 |
|
Borrowings |
|
|
138,013 |
|
|
|
119,150 |
|
|
|
107,254 |
|
|
|
64,855 |
|
|
|
18,863 |
|
|
|
42,399 |
|
Subordinated notes |
|
|
49,500 |
|
|
|
49,434 |
|
|
|
49,484 |
|
|
|
49,417 |
|
|
|
66 |
|
|
|
67 |
|
Total interest-bearing liabilities |
|
|
1,928,770 |
|
|
|
1,626,631 |
|
|
|
1,860,426 |
|
|
|
1,505,453 |
|
|
|
302,139 |
|
|
|
354,973 |
|
Noninterest-bearing
accounts |
|
|
676,000 |
|
|
|
588,492 |
|
|
|
664,319 |
|
|
|
588,172 |
|
|
|
87,508 |
|
|
|
76,147 |
|
Other noninterest-bearing
liabilities |
|
|
39,365 |
|
|
|
32,654 |
|
|
|
36,095 |
|
|
|
31,342 |
|
|
|
6,711 |
|
|
|
4,753 |
|
Total
liabilities |
|
$ |
2,644,135 |
|
|
$ |
2,247,777 |
|
|
$ |
2,560,840 |
|
|
$ |
2,124,967 |
|
|
$ |
396,358 |
|
|
$ |
435,873 |
|
(1) Includes loans HFS.
Non-GAAP Financial Measures:
In addition to financial results presented in accordance with
generally accepted accounting principles utilized in the United
States (“GAAP”), this earnings release presents non-GAAP financial
measures that include tangible book value per share and
tangible common equity ratio. Management believes that providing
the Company’s tangible book value per share and tangible common
equity ratio is consistent with the capital treatment utilized by
the investment community, which excludes intangible assets from the
calculation of risk-based capital ratios and facilitates comparison
of the quality and composition of the Company's capital over time
and in comparison to its competitors. Where applicable, the Company
has also presented comparable GAAP information.
These non-GAAP financial measures have inherent limitations, are
not required to be uniformly applied, and are not audited. They
should not be considered in isolation or as a substitute for total
stockholders' equity or operating results determined in accordance
with GAAP. These non-GAAP measures may not be comparable to
similarly titled measures reported by other companies.
Reconciliation of the GAAP book value per share and common
equity ratio and the non-GAAP tangible book value per share and
tangible common equity ratio is presented below.
(Dollars in thousands, except
share and per share amounts) |
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
Tangible Book Value
Per Share: |
|
2023 |
|
|
2023 |
|
|
2022 |
|
Stockholders' equity (GAAP) |
|
$ |
250,665 |
|
|
$ |
249,933 |
|
|
$ |
220,547 |
|
Less: goodwill and core deposit intangible, net |
|
|
(21,915 |
) |
|
|
(22,917 |
) |
|
|
(5,854 |
) |
Tangible common stockholders' equity (non-GAAP) |
|
$ |
228,750 |
|
|
$ |
227,016 |
|
|
$ |
214,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at
end of period |
|
|
7,693,951 |
|
|
|
7,641,342 |
|
|
|
7,585,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share
(GAAP) |
|
$ |
32.58 |
|
|
$ |
32.71 |
|
|
$ |
29.07 |
|
Tangible book value per share
(non-GAAP) |
|
$ |
29.73 |
|
|
$ |
29.71 |
|
|
$ |
28.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity
Ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
|
$ |
2,920,072 |
|
|
$ |
2,905,621 |
|
|
$ |
2,652,138 |
|
Less: goodwill and core deposit intangible assets |
|
|
(21,915 |
) |
|
|
(22,917 |
) |
|
|
(5,854 |
) |
Tangible assets (non-GAAP) |
|
$ |
2,898,157 |
|
|
$ |
2,882,704 |
|
|
$ |
2,646,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity ratio
(GAAP) |
|
|
8.58 |
% |
|
|
8.60 |
% |
|
|
8.32 |
% |
Tangible common equity ratio
(non-GAAP) |
|
|
7.89 |
|
|
|
7.88 |
|
|
|
8.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts: Joseph C. Adams,Chief Executive
OfficerMatthew D. Mullet,Chief Financial Officer(425)
771-5299www.FSBWA.com
FS Bancorp (NASDAQ:FSBW)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
FS Bancorp (NASDAQ:FSBW)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024