Washington | 45-4585178 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filer [ ] | Accelerated filer [ ] | |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [ X ] |
Page Number | |||
PART I | FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | ||
Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012 (Unaudited) | 2 | ||
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited) | 3 | ||
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited) | 4 | ||
Consolidated Statements of Changes in Stockholders' Equity as of June 30, 2013 and 2012 (Unaudited) | 5 | ||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited) | 6 | ||
Notes to Consolidated Financial Statements | 7 - 35 | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 36 - 44 | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 44 | |
Item 4. | Controls and Procedures | 45 | |
PART II | OTHER INFORMATION | 45 | |
Item 1. | Legal Proceedings | 45 | |
Item 1A. | Risk Factors | 45 | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 45 | |
Item 3. | Defaults Upon Senior Securities | 45 | |
Item 4. | Mine Safety Disclosures | 46 | |
Item 5. | Other Information | 46 | |
Item 6. | Exhibits | 46 | |
SIGNATURES | 47 |
June 30, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 2,296 | $ | 4,003 | |||
Interest-bearing deposits at other financial institutions | 14,117 | 5,410 | |||||
Securities available-for-sale, at fair value | 44,186 | 43,313 | |||||
Federal Home Loan Bank stock, at cost | 1,733 | 1,765 | |||||
Loans held for sale | 13,146 | 8,870 | |||||
Loans receivable, net | 280,411 | 274,949 | |||||
Accrued interest receivable | 1,292 | 1,223 | |||||
Premises and equipment, net | 13,525 | 12,663 | |||||
Other real estate owned ("OREO") | 1,805 | 2,127 | |||||
Deferred tax asset | 1,349 | 1,927 | |||||
Other assets | 5,002 | 2,780 | |||||
TOTAL ASSETS | $ | 378,862 | $ | 359,030 | |||
LIABILITIES | |||||||
Deposits | |||||||
Interest-bearing accounts | $ | 263,808 | $ | 254,784 | |||
Noninterest-bearing accounts | 37,105 | 34,165 | |||||
Total deposits | 300,913 | 288,949 | |||||
Borrowings | 13,664 | 6,840 | |||||
Other liabilities | 3,206 | 3,344 | |||||
Total liabilities | 317,783 | 299,133 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 9) | |||||||
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; 3,240,125 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively | 32 | 32 | |||||
Additional paid-in capital | 29,979 | 29,894 | |||||
Retained earnings | 33,917 | 31,746 | |||||
Accumulated other comprehensive income (loss) | (609 | ) | 597 | ||||
Unearned shares - Employee Stock Ownership Plan ("ESOP") | (2,240 | ) | (2,372 | ) | |||
Total stockholders' equity | 61,079 | 59,897 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 378,862 | $ | 359,030 |
2 |
(Dollars in thousands, except earnings per share data) (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
INTEREST INCOME | |||||||||||||||
Loans receivable | $ | 5,233 | $ | 4,341 | $ | 10,171 | $ | 8,475 | |||||||
Interest and dividends on investment securities and cash and cash equivalents | 203 | 163 | 440 | 328 | |||||||||||
Total interest income | 5,436 | 4,504 | 10,611 | 8,803 | |||||||||||
INTEREST EXPENSE | |||||||||||||||
Deposits | 464 | 569 | 936 | 1,172 | |||||||||||
Borrowings | 48 | 44 | 87 | 90 | |||||||||||
Total interest expense | 512 | 613 | 1,023 | 1,262 | |||||||||||
NET INTEREST INCOME | 4,924 | 3,891 | 9,588 | 7,541 | |||||||||||
PROVISION FOR LOAN LOSSES | 600 | 550 | 1,200 | 1,065 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 4,324 | 3,341 | 8,388 | 6,476 | |||||||||||
NONINTEREST INCOME | |||||||||||||||
Service charges and fee income | 494 | 505 | 948 | 995 | |||||||||||
Gain on sale of loans | 2,228 | 445 | 3,779 | 551 | |||||||||||
Gain on sale of investment securities | 96 | 94 | 264 | 106 | |||||||||||
Other noninterest income | 113 | 78 | 203 | 193 | |||||||||||
Total noninterest income | 2,931 | 1,122 | 5,194 | 1,845 | |||||||||||
NONINTEREST EXPENSE | |||||||||||||||
Salaries and benefits | 3,135 | 1,864 | 5,612 | 3,561 | |||||||||||
Operations | 759 | 624 | 1,517 | 1,131 | |||||||||||
Occupancy | 385 | 314 | 702 | 603 | |||||||||||
Data processing | 266 | 275 | 532 | 508 | |||||||||||
OREO fair value write-downs, net of loss on sales | 117 | 216 | 195 | 646 | |||||||||||
OREO expenses | 16 | 64 | 38 | 98 | |||||||||||
Loan costs | 345 | 198 | 645 | 337 | |||||||||||
Professional and board fees | 333 | 166 | 563 | 303 | |||||||||||
FDIC insurance | 67 | 56 | 123 | 119 | |||||||||||
Marketing and advertising | 158 | 67 | 243 | 120 | |||||||||||
Impairment (recovery) on mortgage servicing rights | 22 | (2 | ) | (100 | ) | (3 | ) | ||||||||
Total noninterest expense | 5,603 | 3,842 | 10,070 | 7,423 | |||||||||||
INCOME BEFORE PROVISION FOR INCOME TAX | 1,652 | 621 | 3,512 | 898 | |||||||||||
PROVISION FOR INCOME TAX | 566 | — | 1,191 | — | |||||||||||
NET INCOME | $ | 1,086 | $ | 621 | $ | 2,321 | $ | 898 | |||||||
Basic earnings per share | $ | 0.36 | n/a (1) | $ | 0.77 | n/a (1) | |||||||||
Diluted earnings per share | $ | 0.36 | n/a (1) | $ | 0.77 | n/a (1) |
3 |
(In thousands) (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net Income | $ | 1,086 | $ | 621 | $ | 2,321 | $ | 898 | |||||||
Other comprehensive gain (loss), net of tax: | |||||||||||||||
Unrealized gain (loss) on securities available-for-sale: | |||||||||||||||
Unrealized holding gain (loss) arising during period | (1,298 | ) | 337 | (1,256 | ) | 343 | |||||||||
Reclassification adjustment for realized losses included in net income | (96 | ) | (94 | ) | (264 | ) | (106 | ) | |||||||
Income tax benefit related to realized and unrealized gain (loss) | 474 | — | 314 | — | |||||||||||
Other comprehensive gain (loss), net of tax | (920 | ) | 243 | (1,206 | ) | 237 | |||||||||
COMPREHENSIVE INCOME | $ | 166 | $ | 864 | $ | 1,115 | $ | 1,135 |
4 |
(Dollars in thousands, except share data) (Unaudited) | ||||||||||||||||||||||||||
Common Stock | Additional | Accumulated Other | Unearned | |||||||||||||||||||||||
Shares | Amount | Paid-in Capital | Retained Earnings | Comprehensive Income (Loss) | ESOP Shares | Total Equity | ||||||||||||||||||||
BALANCE, January 1, 2012 | — | $ | — | $ | — | $ | 26,451 | $ | 316 | $ | — | $ | 26,767 | |||||||||||||
Net income | — | — | — | 898 | — | — | 898 | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 237 | — | 237 | |||||||||||||||||||
BALANCE, June 30, 2012 | — | $ | — | $ | — | $ | 27,349 | $ | 553 | $ | — | $ | 27,902 | |||||||||||||
BALANCE, January 1, 2013 | 3,240,125 | $ | 32 | $ | 29,894 | $ | 31,746 | $ | 597 | $ | (2,372 | ) | $ | 59,897 | ||||||||||||
Net income | — | — | — | 2,321 | — | — | 2,321 | |||||||||||||||||||
Dividends paid ($0.05 per share) | — | — | — | (150 | ) | — | — | (150 | ) | |||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (1,206 | ) | — | (1,206 | ) | |||||||||||||||||
ESOP shares allocated | — | — | 85 | — | — | 132 | 217 | |||||||||||||||||||
BALANCE, June 30, 2013 | 3,240,125 | $ | 32 | $ | 29,979 | $ | 33,917 | $ | (609 | ) | $ | (2,240 | ) | $ | 61,079 |
5 |
(In thousands) (Unaudited) | |||||||
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 2,321 | $ | 898 | |||
Adjustments to reconcile net income to net cash from operating activities | |||||||
Provision for loan losses | 1,200 | 1,065 | |||||
Depreciation, amortization and accretion | 513 | 756 | |||||
ESOP compensation expense for allocated shares | 217 | — | |||||
Provision for deferred income taxes | 981 | 296 | |||||
Valuation allowance on deferred income taxes | — | (296 | ) | ||||
Gain on sale of loans held for sale | (3,779 | ) | (551 | ) | |||
Origination of loans held for sale | (132,168 | ) | (35,134 | ) | |||
Proceeds from sale of loans held for sale | 133,978 | 31,440 | |||||
Gain on sale of investment securities | (264 | ) | (106 | ) | |||
Loss on sale of other real estate owned | — | 52 | |||||
Recovery of loss on mortgage servicing rights | (100 | ) | (3 | ) | |||
Impairment loss on other real estate owned | 195 | 594 | |||||
Changes in operating assets and liabilities | |||||||
Accrued interest receivable | (69 | ) | (109 | ) | |||
Other assets | (1,368 | ) | (115 | ) | |||
Other liabilities | (52 | ) | (142 | ) | |||
Net cash from (used by) operating activities | 1,605 | (1,355 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Activity in securities available-for-sale: | |||||||
Proceeds from sale of investment securities | 8,786 | 2,432 | |||||
Maturities, prepayments, and calls | 1,676 | 5,741 | |||||
Purchases | (13,083 | ) | (19,083 | ) | |||
Loan originations and principal collections, net | (9,496 | ) | (30,147 | ) | |||
Proceeds from sale of other real estate owned | 163 | 1,966 | |||||
Purchase of premises and equipment | (1,289 | ) | (1,723 | ) | |||
Net cash used by investing activities | (13,243 | ) | (40,814 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Net increase in deposits | 11,964 | 60,952 | |||||
Proceeds from borrowings | 76,454 | 12,900 | |||||
Repayments of borrowings | (69,630 | ) | (17,700 | ) | |||
Dividends paid | (150 | ) | — | ||||
Net cash from financing activities | 18,638 | 56,152 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 7,000 | 13,983 | |||||
CASH AND CASH EQUIVALENTS, beginning of period | 6,787 | 19,253 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 13,787 | $ | 33,236 | |||
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 1,017 | $ | 1,269 | |||
Income taxes | $ | 210 | $ | — | |||
SUPPLEMENTARY DISCLOSURES OF NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES | |||||||
Change in unrealized gain (loss) on investment securities | $ | (1,827 | ) | $ | 237 | ||
Property taken in settlement of loans | $ | (36 | ) | $ | (921 | ) | |
Transfer portfolio loans to loans held for sale | $ | 3,251 | $ | — |
6 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
7 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
June 30, 2013 | |||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses (less than 1 year) | Gross Unrealized Losses (more than 1 year) | Estimated Fair Values | |||||||||||||||
Securities available-for-sale | |||||||||||||||||||
Federal agency securities | $ | 11,321 | $ | 44 | $ | (328 | ) | $ | — | $ | 11,037 | ||||||||
Municipal bonds | 9,325 | 43 | (332 | ) | — | 9,036 | |||||||||||||
Corporate securities | 3,503 | 1 | (34 | ) | — | 3,470 | |||||||||||||
Mortgage-backed securities | 20,959 | 56 | (372 | ) | — | 20,643 | |||||||||||||
Total securities available-for-sale | $ | 45,108 | $ | 144 | $ | (1,066 | ) | $ | — | $ | 44,186 | ||||||||
December 31, 2012 | |||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses (less than 1 year) | Gross Unrealized Losses (more than 1 year) | Estimated Fair Values | |||||||||||||||
Securities available-for-sale | |||||||||||||||||||
Federal agency securities | $ | 12,287 | $ | 281 | $ | (16 | ) | $ | — | $ | 12,552 | ||||||||
Municipal bonds | 8,863 | 202 | (5 | ) | — | 9,060 | |||||||||||||
Corporate securities | 2,492 | — | (4 | ) | — | 2,488 | |||||||||||||
Mortgage-backed securities | 18,766 | 447 | — | — | 19,213 | ||||||||||||||
Total securities available-for-sale | $ | 42,408 | $ | 930 | $ | (25 | ) | $ | — | $ | 43,313 |
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
June 30, | |||||||
2013 | |||||||
Amortized Cost | Fair Value | ||||||
No contractual maturity | $ | — | $ | — | |||
Due in one year or less | 2,025 | 2,038 | |||||
Due after one year through five years | 4,379 | 4,412 | |||||
Due after five years through ten years | 17,150 | 16,744 | |||||
Due after ten years | 21,554 | 20,992 | |||||
Total | $ | 45,108 | $ | 44,186 |
Three Months Ended June 30, 2013 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||
Proceeds | Gross Gains | Gross Losses | Proceeds | Gross Gains | Gross Losses | ||||||||||||||||||
Securities available-for-sale | $ | 4,718 | $ | 96 | $ | — | $ | 8,786 | $ | 264 | $ | — | |||||||||||
Three Months Ended June 30, 2012 | Six Months Ended June 30, 2012 | ||||||||||||||||||||||
Proceeds | Gross Gains | Gross Losses | Proceeds | Gross Gains | Gross Losses | ||||||||||||||||||
Securities available-for-sale | $ | 1,647 | $ | 94 | $ | — | $ | 2,432 | $ | 106 | $ | — | |||||||||||
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
REAL ESTATE LOANS | |||||||
Commercial | $ | 34,762 | $ | 33,250 | |||
Construction and development | 43,177 | 31,893 | |||||
Home equity | 15,356 | 15,474 | |||||
One-to-four-family | 16,366 | 13,976 | |||||
Multi-family | 4,145 | 3,202 | |||||
Total real estate loans | 113,806 | 97,795 | |||||
CONSUMER LOANS | |||||||
Indirect home improvement | 94,058 | 86,249 | |||||
Recreational | 20,520 | 17,968 | |||||
Automobile | 1,485 | 2,416 | |||||
Home improvement | 558 | 651 | |||||
Other | 1,309 | 1,386 | |||||
Total consumer loans | 117,930 | 108,670 | |||||
COMMERCIAL BUSINESS LOANS | 53,966 | 73,465 | |||||
Total loans | 285,702 | 279,930 | |||||
Allowance for loan losses | (5,276 | ) | (4,698 | ) | |||
Deferred costs, fees, and discounts, net | (15 | ) | (283 | ) | |||
Total loans receivable, net | $ | 280,411 | $ | 274,949 |
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
At or For the Three Months Ended June 30, 2013 | |||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | Real Estate | Consumer | Commercial Business | Unallocated | Total | ||||||||||||||
Beginning balance | $ | 2,264 | $ | 1,831 | $ | 679 | $ | 270 | $ | 5,044 | |||||||||
Provision for loan losses | 317 | 143 | (55 | ) | 195 | 600 | |||||||||||||
Charge-offs | (86 | ) | (460 | ) | (44 | ) | — | (590 | ) | ||||||||||
Recoveries | — | 222 | — | — | 222 | ||||||||||||||
Net charge-offs | (86 | ) | (238 | ) | (44 | ) | — | (368 | ) | ||||||||||
Ending balance | $ | 2,495 | $ | 1,736 | $ | 580 | $ | 465 | $ | 5,276 | |||||||||
Period end amount allocated to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 233 | $ | — | $ | 6 | $ | — | $ | 239 | |||||||||
Loans collectively evaluated for impairment | 2,262 | 1,736 | 574 | 465 | 5,037 | ||||||||||||||
Ending balance | $ | 2,495 | $ | 1,736 | $ | 580 | $ | 465 | $ | 5,276 | |||||||||
LOANS RECEIVABLE | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 4,198 | $ | — | $ | 152 | $ | — | $ | 4,350 | |||||||||
Loans collectively evaluated for impairment | 109,608 | 117,930 | 53,814 | — | 281,352 | ||||||||||||||
Ending balance | $ | 113,806 | $ | 117,930 | $ | 53,966 | $ | — | $ | 285,702 | |||||||||
At or For the Six Months Ended June 30, 2013 | |||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | Real Estate | Consumer | Commercial Business | Unallocated | Total | ||||||||||||||
Beginning balance | $ | 1,690 | $ | 2,158 | $ | 815 | $ | 35 | $ | 4,698 | |||||||||
Provision for loan losses | 971 | (7 | ) | (194 | ) | 430 | 1,200 | ||||||||||||
Charge-offs | (201 | ) | (859 | ) | (44 | ) | — | (1,104 | ) | ||||||||||
Recoveries | 35 | 444 | 3 | — | 482 | ||||||||||||||
Net charge-offs | (166 | ) | (415 | ) | (41 | ) | — | (622 | ) | ||||||||||
Ending balance | $ | 2,495 | $ | 1,736 | $ | 580 | $ | 465 | $ | 5,276 | |||||||||
Period end amount allocated to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 233 | $ | — | $ | 6 | $ | — | $ | 239 | |||||||||
Loans collectively evaluated for impairment | 2,262 | 1,736 | 574 | 465 | 5,037 | ||||||||||||||
Ending balance | $ | 2,495 | $ | 1,736 | $ | 580 | $ | 465 | $ | 5,276 | |||||||||
LOANS RECEIVABLE | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 4,198 | $ | — | $ | 152 | $ | — | $ | 4,350 | |||||||||
Loans collectively evaluated for impairment | 109,608 | 117,930 | 53,814 | — | 281,352 | ||||||||||||||
Ending balance | $ | 113,806 | $ | 117,930 | $ | 53,966 | $ | — | $ | 285,702 |
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
At or For the Three Months Ended June 30, 2012 | |||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | Real Estate | Consumer | Commercial Business | Unallocated | Total | ||||||||||||||
Beginning balance | $ | 938 | $ | 2,487 | $ | 618 | $ | 157 | $ | 4,200 | |||||||||
Provision for loan losses | 447 | (155 | ) | 44 | 214 | 550 | |||||||||||||
Charge-offs | (264 | ) | (479 | ) | (2 | ) | — | (745 | ) | ||||||||||
Recoveries | 2 | 325 | — | — | 327 | ||||||||||||||
Net charge-offs | (262 | ) | (154 | ) | (2 | ) | — | (418 | ) | ||||||||||
Ending balance | $ | 1,123 | $ | 2,178 | $ | 660 | $ | 371 | $ | 4,332 | |||||||||
Period end amount allocated to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 82 | $ | — | $ | 37 | $ | — | $ | 119 | |||||||||
Loans collectively evaluated for impairment | 1,041 | 2,178 | 623 | 371 | 4,213 | ||||||||||||||
Ending balance | $ | 1,123 | $ | 2,178 | $ | 660 | $ | 371 | $ | 4,332 | |||||||||
LOANS RECEIVABLE | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 3,310 | $ | — | $ | 357 | $ | — | $ | 3,667 | |||||||||
Loans collectively evaluated for impairment | 74,421 | 114,652 | 56,595 | — | 245,668 | ||||||||||||||
Ending balance | $ | 77,731 | $ | 114,652 | $ | 56,952 | $ | — | $ | 249,335 | |||||||||
At or For the Six Months Ended June 30, 2012 | |||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | Real Estate | Consumer | Commercial Business | Unallocated | Total | ||||||||||||||
Beginning balance | $ | 803 | $ | 2,846 | $ | 511 | $ | 185 | $ | 4,345 | |||||||||
Provision for loan losses | 581 | 49 | 249 | 186 | 1,065 | ||||||||||||||
Charge-offs | (264 | ) | (1,304 | ) | (100 | ) | — | (1,668 | ) | ||||||||||
Recoveries | 3 | 587 | — | — | 590 | ||||||||||||||
Net charge-offs | (261 | ) | (717 | ) | (100 | ) | — | (1,078 | ) | ||||||||||
Ending balance | $ | 1,123 | $ | 2,178 | $ | 660 | $ | 371 | $ | 4,332 | |||||||||
Period end amount allocated to: | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 82 | $ | — | $ | 37 | $ | — | $ | 119 | |||||||||
Loans collectively evaluated for impairment | 1,041 | 2,178 | 623 | 371 | 4,213 | ||||||||||||||
Ending balance | $ | 1,123 | $ | 2,178 | $ | 660 | $ | 371 | $ | 4,332 | |||||||||
LOANS RECEIVABLE | |||||||||||||||||||
Loans individually evaluated for impairment | $ | 3,310 | $ | — | $ | 357 | $ | — | $ | 3,667 | |||||||||
Loans collectively evaluated for impairment | 74,421 | 114,652 | 56,595 | — | 245,668 | ||||||||||||||
Ending balance | $ | 77,731 | $ | 114,652 | $ | 56,952 | $ | — | $ | 249,335 |
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FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
June 30, 2013 | |||||||||||||||||||||||||||
Loans Past Due and Still Accruing | |||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days or More Past Due | Total Past Due | Non-Accrual | Current | Total Loans Receivable | |||||||||||||||||||||
REAL ESTATE LOANS | |||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 1,447 | $ | 33,315 | $ | 34,762 | |||||||||||||
Construction and development | — | — | — | — | — | 43,177 | 43,177 | ||||||||||||||||||||
Home equity | 48 | 461 | — | 509 | 115 | 14,732 | 15,356 | ||||||||||||||||||||
One-to-four-family | — | — | — | — | 360 | 16,006 | 16,366 | ||||||||||||||||||||
Multi-family | — | — | — | — | — | 4,145 | 4,145 | ||||||||||||||||||||
Total real estate loans | 48 | 461 | — | 509 | 1,922 | 111,375 | 113,806 | ||||||||||||||||||||
CONSUMER | |||||||||||||||||||||||||||
Indirect home improvement | 395 | 302 | — | 697 | 247 | 93,114 | 94,058 | ||||||||||||||||||||
Recreational | 40 | 17 | — | 57 | — | 20,463 | 20,520 | ||||||||||||||||||||
Automobile | 24 | 14 | — | 38 | — | 1,447 | 1,485 | ||||||||||||||||||||
Home improvement | 8 | — | — | 8 | 31 | 519 | 558 | ||||||||||||||||||||
Other | 20 | 6 | — | 26 | — | 1,283 | 1,309 | ||||||||||||||||||||
Total consumer loans | 487 | 339 | — | 826 | 278 | 116,826 | 117,930 | ||||||||||||||||||||
COMMERCIAL BUSINESS LOANS | — | — | — | — | 94 | 53,872 | 53,966 | ||||||||||||||||||||
Total | $ | 535 | $ | 800 | $ | — | $ | 1,335 | $ | 2,294 | $ | 282,073 | $ | 285,702 | |||||||||||||
15 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
December 31, 2012 | |||||||||||||||||||||||||||
Loans Past Due and Still Accruing | |||||||||||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days or More Past Due | Total Past Due | Non-Accrual | Current | Total Loans Receivable | |||||||||||||||||||||
REAL ESTATE LOANS | |||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 783 | $ | 32,467 | $ | 33,250 | |||||||||||||
Construction and development | — | — | — | — | — | 31,893 | 31,893 | ||||||||||||||||||||
Home equity | 192 | 484 | — | 676 | 248 | 14,550 | 15,474 | ||||||||||||||||||||
One-to-four-family | — | — | — | — | 344 | 13,632 | 13,976 | ||||||||||||||||||||
Multi-family | — | — | — | — | — | 3,202 | 3,202 | ||||||||||||||||||||
Total real estate loans | 192 | 484 | — | 676 | 1,375 | 95,744 | 97,795 | ||||||||||||||||||||
CONSUMER | |||||||||||||||||||||||||||
Indirect home improvement | 653 | 300 | — | 953 | 295 | 85,001 | 86,249 | ||||||||||||||||||||
Recreational | 128 | 2 | — | 130 | — | 17,838 | 17,968 | ||||||||||||||||||||
Automobile | 68 | 1 | — | 69 | 10 | 2,337 | 2,416 | ||||||||||||||||||||
Home improvement | — | — | — | — | 32 | 619 | 651 | ||||||||||||||||||||
Other | 8 | 11 | — | 19 | — | 1,367 | 1,386 | ||||||||||||||||||||
Total consumer loans | 857 | 314 | — | 1,171 | 337 | 107,162 | 108,670 | ||||||||||||||||||||
COMMERCIAL BUSINESS LOANS | — | — | — | — | 194 | 73,271 | 73,465 | ||||||||||||||||||||
Total | $ | 1,049 | $ | 798 | $ | — | $ | 1,847 | $ | 1,906 | $ | 276,177 | $ | 279,930 |
16 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
At or For the Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||
Unpaid Principal Balance | Write- downs | Recorded Investment | Specific Reserve | Adjusted Recorded Investment | YTD Average Recorded Investment | YTD Interest Income Recognized | |||||||||||||||||||||
WITH NO RELATED ALLOWANCE RECORDED | |||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Construction and development | — | — | — | — | — | — | — | ||||||||||||||||||||
Home equity | 45 | — | 45 | — | 45 | 44 | — | ||||||||||||||||||||
One-to-four-family | 1,302 | (170 | ) | 1,132 | — | 1,132 | 1,109 | 31 | |||||||||||||||||||
Multi-family | — | — | — | — | — | — | — | ||||||||||||||||||||
Indirect home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Recreational | — | — | — | — | — | — | — | ||||||||||||||||||||
Automobile | — | — | — | — | — | — | — | ||||||||||||||||||||
Home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | — | — | ||||||||||||||||||||
Commercial business loans | 166 | (72 | ) | 94 | — | 94 | 94 | — | |||||||||||||||||||
Subtotal loans | 1,513 | (242 | ) | 1,271 | — | 1,271 | 1,247 | 31 | |||||||||||||||||||
WITH AN ALLOWANCE RECORDED | |||||||||||||||||||||||||||
Commercial | 3,201 | (225 | ) | 2,976 | (217 | ) | 2,759 | 2,993 | 46 | ||||||||||||||||||
Construction and development | — | — | — | — | — | — | — | ||||||||||||||||||||
Home equity | 45 | — | 45 | (16 | ) | 29 | 45 | — | |||||||||||||||||||
One-to-four-family | — | — | — | — | — | — | — | ||||||||||||||||||||
Multi-family | — | — | — | — | — | — | — | ||||||||||||||||||||
Indirect home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Recreational | — | — | — | — | — | — | — | ||||||||||||||||||||
Automobile | — | — | — | — | — | — | — | ||||||||||||||||||||
Home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | — | — | ||||||||||||||||||||
Commercial business loans | 61 | (3 | ) | 58 | (6 | ) | 52 | 62 | 3 | ||||||||||||||||||
Subtotal loans | 3,307 | (228 | ) | 3,079 | (239 | ) | 2,840 | 3,100 | 49 | ||||||||||||||||||
Total | $ | 4,820 | $ | (470 | ) | $ | 4,350 | $ | (239 | ) | $ | 4,111 | $ | 4,347 | $ | 80 | |||||||||||
17 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) | |||||||||||||||||||||||||||
At or For the Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Unpaid Principal Balance | Write- downs | Recorded Investment | Specific Reserve | Adjusted Recorded Investment | YTD Average Recorded Investment | YTD Interest Income Recognized | |||||||||||||||||||||
WITH NO RELATED ALLOWANCE RECORDED | |||||||||||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Construction and development | — | — | — | — | — | — | — | ||||||||||||||||||||
Home equity | 111 | — | 111 | — | 111 | 112 | 3 | ||||||||||||||||||||
One-to-four-family | 1,295 | (170 | ) | 1,125 | — | 1,125 | 1,172 | 30 | |||||||||||||||||||
Multi-family | — | — | — | — | — | — | — | ||||||||||||||||||||
Indirect home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Recreational | — | — | — | — | — | — | — | ||||||||||||||||||||
Automobile | — | — | — | — | — | — | — | ||||||||||||||||||||
Home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | — | — | ||||||||||||||||||||
Commercial business loans | 241 | (111 | ) | 130 | — | 130 | 172 | — | |||||||||||||||||||
Subtotal loans | 1,647 | (281 | ) | 1,366 | — | 1,366 | 1,456 | 33 | |||||||||||||||||||
WITH AN ALLOWANCE RECORDED | |||||||||||||||||||||||||||
Commercial | 950 | (167 | ) | 783 | (39 | ) | 744 | 893 | 7 | ||||||||||||||||||
Construction and development | — | — | — | — | — | — | — | ||||||||||||||||||||
Home equity | 1,625 | (38 | ) | 1,587 | (79 | ) | 1,508 | 1,616 | 68 | ||||||||||||||||||
One-to-four-family | — | — | — | — | — | — | — | ||||||||||||||||||||
Multi-family | — | — | — | — | — | — | — | ||||||||||||||||||||
Indirect home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Recreational | — | — | — | — | — | — | — | ||||||||||||||||||||
Automobile | — | — | — | — | — | — | — | ||||||||||||||||||||
Home improvement | — | — | — | — | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | — | — | ||||||||||||||||||||
Commercial business loans | 67 | (3 | ) | 64 | (7 | ) | 57 | 68 | 5 | ||||||||||||||||||
Subtotal loans | 2,642 | (208 | ) | 2,434 | (125 | ) | 2,309 | 2,577 | 80 | ||||||||||||||||||
Total | $ | 4,289 | $ | (489 | ) | $ | 3,800 | $ | (125 | ) | $ | 3,675 | $ | 4,033 | $ | 113 |
18 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
• | Grades 1 and 2 – These grades include loans to very high quality borrowers with excellent or desirable business credit. |
• | Grade 3 – This grade includes loans to borrowers of good business credit with moderate risk. |
• | Grades 4 and 5 – These grades include “Pass” grade loans to borrowers of average credit quality and risk. |
• | Grade 6 – This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term. |
• | Grade 7 – This grade is for “Other Assets Especially Mentioned (OAEM)” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected. |
• | Grade 8 – This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected. |
• | Grade 9 – This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable. |
• | Grade 10 – This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off. |
19 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
June 30, 2013 | |||||||||||||||||||||||
Pass (1 - 5) | Watch (6) | Special Mention (7) | Substandard (8) | Doubtful(9) | Total | ||||||||||||||||||
REAL ESTATE LOANS | |||||||||||||||||||||||
Commercial | $ | 28,484 | $ | 3,302 | $ | — | $ | 2,976 | $ | — | $ | 34,762 | |||||||||||
Construction and development | 43,177 | — | — | — | — | 43,177 | |||||||||||||||||
Home equity | 15,241 | — | — | 115 | — | 15,356 | |||||||||||||||||
One-to-four-family | 15,234 | — | — | 1,132 | — | 16,366 | |||||||||||||||||
Multi-family | 4,145 | — | — | — | — | 4,145 | |||||||||||||||||
Total real estate loans | 106,281 | 3,302 | — | 4,223 | — | 113,806 | |||||||||||||||||
CONSUMER | |||||||||||||||||||||||
Indirect home improvement | 93,811 | — | — | 247 | — | 94,058 | |||||||||||||||||
Recreational | 20,520 | — | — | — | — | 20,520 | |||||||||||||||||
Automobile | 1,485 | — | — | — | — | 1,485 | |||||||||||||||||
Home improvement | 527 | — | — | 31 | — | 558 | |||||||||||||||||
Other | 1,309 | — | — | — | — | 1,309 | |||||||||||||||||
Total consumer loans | 117,652 | — | — | 278 | — | 117,930 | |||||||||||||||||
COMMERCIAL BUSINESS LOANS | 53,150 | 664 | — | 152 | — | 53,966 | |||||||||||||||||
Total | $ | 277,083 | $ | 3,966 | $ | — | $ | 4,653 | $ | — | $ | 285,702 | |||||||||||
December 31, 2012 | |||||||||||||||||||||||
Pass (1 - 5) | Watch (6) | Special Mention (7) | Substandard (8) | Doubtful(9) | Total | ||||||||||||||||||
REAL ESTATE LOANS | |||||||||||||||||||||||
Commercial | $ | 29,145 | $ | 3,322 | $ | — | $ | 783 | $ | — | $ | 33,250 | |||||||||||
Construction and development | 30,306 | — | — | 1,587 | — | 31,893 | |||||||||||||||||
Home equity | 15,226 | — | — | 248 | — | 15,474 | |||||||||||||||||
One-to-four-family | 12,851 | — | — | 1,125 | — | 13,976 | |||||||||||||||||
Multi-family | 3,202 | — | — | — | — | 3,202 | |||||||||||||||||
Total real estate loans | 90,730 | 3,322 | — | 3,743 | — | 97,795 | |||||||||||||||||
CONSUMER | |||||||||||||||||||||||
Indirect home improvement | 85,954 | — | — | 295 | — | 86,249 | |||||||||||||||||
Recreational | 17,968 | — | — | — | — | 17,968 | |||||||||||||||||
Automobile | 2,406 | — | — | 10 | — | 2,416 | |||||||||||||||||
Home improvement | 619 | — | — | 32 | — | 651 | |||||||||||||||||
Other | 1,386 | — | — | — | — | 1,386 | |||||||||||||||||
Total consumer loans | 108,333 | — | — | 337 | — | 108,670 | |||||||||||||||||
COMMERCIAL BUSINESS LOANS | 72,596 | — | 675 | 194 | — | 73,465 | |||||||||||||||||
Total | $ | 271,659 | $ | 3,322 | $ | 675 | $ | 4,274 | $ | — | $ | 279,930 |
20 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
Troubled debt restructured loans still on accrual | $ | 2,360 | $ | 2,368 | |||
Troubled debt restructured loans on non-accrual | 807 | 892 | |||||
Total troubled debt restructured loans | $ | 3,167 | $ | 3,260 |
At or For the Six Months Ended June 30, 2013 | ||||||||||||||
Number of Contracts | Recorded Investment | Increase in the Allowance | Charge-offs to the Allowance | |||||||||||
Commercial Business Loans | 1 | $ | 35 | $ | — | $ | 35 | |||||||
Total | 1 | $ | 35 | $ | — | $ | 35 |
21 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
At or For the Three Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Beginning balance | $ | 1,404 | $ | 246 | |||
Additions | 494 | 203 | |||||
Mortgage servicing rights amortized | (91 | ) | (26 | ) | |||
(Impairment) recovery of loss on mortgage servicing rights | (22 | ) | 2 | ||||
Ending balance | $ | 1,785 | $ | 425 | |||
At or For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Beginning balance | $ | 1,064 | $ | 200 | |||
Additions | 790 | 269 | |||||
Mortgage servicing rights amortized | (169 | ) | (47 | ) | |||
Recovery of loss on mortgage servicing rights | 100 | 3 | |||||
Ending balance | $ | 1,785 | $ | 425 |
22 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Beginning balance | $ | 1,956 | $ | 2,789 | $ | 2,127 | $ | 4,589 | |||||||
Additions | 36 | 921 | 36 | 921 | |||||||||||
Fair value write-downs | (117 | ) | (216 | ) | (195 | ) | (594 | ) | |||||||
Disposition of assets | (70 | ) | (544 | ) | (163 | ) | (1,966 | ) | |||||||
Ending balance | $ | 1,805 | $ | 2,950 | $ | 1,805 | $ | 2,950 |
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
Interest-bearing checking | $ | 23,288 | $ | 24,348 | |||
Noninterest-bearing checking | 37,105 | 34,165 | |||||
Savings | 14,744 | 11,812 | |||||
Money market | 117,706 | 114,246 | |||||
Certificates of deposits of less than $100,000(1) | 41,806 | 40,119 | |||||
Certificates of deposits of $100,000 through $250,000 | 43,286 | 43,810 | |||||
Certificates of deposits of more than $250,000 | 22,978 | 20,449 | |||||
Total | $ | 300,913 | $ | 288,949 |
23 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
As of June 30, | ||||
2013 | ||||
2013 | $ | 23,464 | ||
2014 | 33,751 | |||
2015 | 34,212 | |||
2016 | 8,399 | |||
2017 | 4,907 | |||
Thereafter | 3,337 | |||
Total | $ | 108,070 |
For Three Months Ended June 30, | For Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest-bearing checking | $ | 8 | $ | 13 | $ | 16 | $ | 30 | |||||||
Savings and money market | 124 | 146 | 258 | 310 | |||||||||||
Certificates of deposit | 332 | 410 | 662 | 832 | |||||||||||
Total | $ | 464 | $ | 569 | $ | 936 | $ | 1,172 |
24 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
COMMITMENTS TO EXTEND CREDIT | |||||||
REAL ESTATE LOANS | |||||||
Construction and development | $ | 21,882 | $ | 27,347 | |||
One-to-four-family | 31,036 | 19,313 | |||||
Home equity | 11,692 | 11,928 | |||||
Commercial/Multi-family | 538 | 3,241 | |||||
Total real estate loans | 65,148 | 61,829 | |||||
CONSUMER LOANS | |||||||
Indirect home improvement | 433 | 568 | |||||
Other | 6,255 | 6,225 | |||||
Total consumer loans | 6,688 | 6,793 | |||||
COMMERCIAL BUSINESS LOANS | 47,803 | 41,025 | |||||
Total commitments to extend credit | $ | 119,639 | $ | 109,647 |
25 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
26 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
To be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||
For Capital Adequacy Purposes | ||||||||||||||||||||
Actual | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
As of June 30, 2013 | ||||||||||||||||||||
Total Risk-Based Capital | ||||||||||||||||||||
(to Risk-weighted Assets) | $ | 53,563 | 16.91 | % | $ | 25,333 | 8.00 | % | $ | 31,666 | 10.00 | % | ||||||||
Tier 1 Risk-Based Capital | ||||||||||||||||||||
(to Risk-weighted Assets) | $ | 49,586 | 15.66 | % | $ | 12,667 | 4.00 | % | $ | 19,000 | 6.00 | % | ||||||||
Tier 1 Leverage Capital | ||||||||||||||||||||
(to Average Assets) | $ | 49,586 | 13.11 | % | $ | 15,131 | 4.00 | % | $ | 18,914 | 5.00 | % | ||||||||
As of December 31, 2012 | ||||||||||||||||||||
Total Risk-Based Capital | ||||||||||||||||||||
(to Risk-weighted Assets) | $ | 50,591 | 16.00 | % | $ | 25,294 | 8.00 | % | $ | 31,617 | 10.00 | % | ||||||||
Tier 1 Risk-Based Capital | ||||||||||||||||||||
(to Risk-weighted Assets) | $ | 46,627 | 14.75 | % | $ | 12,647 | 4.00 | % | $ | 18,970 | 6.00 | % | ||||||||
Tier 1 Leverage Capital | ||||||||||||||||||||
(to Average Assets) | $ | 46,627 | 13.26 | % | $ | 14,066 | 4.00 | % | $ | 17,583 | 5.00 | % |
27 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Company | Bank | ||||||||||||||
June 30, | December 31, | June 30, | December 31, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Equity | $ | 61,079 | $ | 59,897 | $ | 48,977 | $ | 47,836 | |||||||
Unrealized loss (gain) on securities available-for-sale | 609 | (597 | ) | 609 | (597 | ) | |||||||||
Disallowed deferred tax assets | — | (506 | ) | — | (506 | ) | |||||||||
Disallowed servicing assets | — | (106 | ) | — | (106 | ) | |||||||||
Total Tier 1 capital | 61,688 | 58,688 | 49,586 | 46,627 | |||||||||||
Allowance for loan and lease losses for regulatory capital purposes | 3,977 | 3,964 | 3,977 | 3,964 | |||||||||||
Total risk-based capital | $ | 65,665 | $ | 62,652 | $ | 53,563 | $ | 50,591 |
28 |
Securities Available-for-Sale | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
June 30, 2013 | |||||||||||||||
Federal agency securities | $ | — | $ | 11,037 | $ | — | $ | 11,037 | |||||||
Municipal bonds | — | 9,036 | — | 9,036 | |||||||||||
Corporate securities | — | 3,470 | — | 3,470 | |||||||||||
Mortgage-backed securities | — | 20,643 | — | 20,643 | |||||||||||
Total | $ | — | $ | 44,186 | $ | — | $ | 44,186 |
Securities Available-for-Sale | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
December 31, 2012 | |||||||||||||||
Federal agency securities | $ | — | $ | 12,552 | $ | — | $ | 12,552 | |||||||
Municipal bonds | — | 9,060 | — | 9,060 | |||||||||||
Corporate securities | — | 2,488 | — | 2,488 | |||||||||||
Mortgage-backed securities | — | 19,213 | — | 19,213 | |||||||||||
Total | $ | — | $ | 43,313 | $ | — | $ | 43,313 |
29 |
Interest Rate Lock Commitments with Customers | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
June 30, 2013 | $ | — | $ | — | $ | 128 | $ | 128 | |||||||
December 31, 2012 | $ | — | $ | — | $ | 45 | $ | 45 |
Forward Sale Commitments with Investors | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
June 30, 2013 | $ | — | $ | 376 | $ | 767 | $ | 1,143 | |||||||
December 31, 2012 | $ | — | $ | — | $ | 48 | $ | 48 |
Paired Off Commitments with Investors | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
June 30, 2013 | $ | — | $ | 753 | $ | — | $ | 753 | |||||||
December 31, 2012 | $ | — | $ | — | $ | — | $ | — |
Impaired Loans | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Total Impairment | |||||||||||||||
June 30, 2013 | $ | — | $ | — | $ | 4,350 | $ | 4,350 | $ | (239 | ) | ||||||||
December 31, 2012 | $ | — | $ | — | $ | 3,800 | $ | 3,800 | $ | (125 | ) |
30 |
OREO | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Total Impairment | |||||||||||||||
June 30, 2013 | $ | — | $ | — | $ | 1,805 | $ | 1,805 | $ | (195 | ) | ||||||||
December 31, 2012 | $ | — | $ | — | $ | 2,127 | $ | 2,127 | $ | (812 | ) |
Mortgage Servicing Rights | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Total Impairment/ (Recovery) | |||||||||||||||
June 30, 2013 | $ | — | $ | — | $ | 2,047 | $ | 2,047 | $ | (100 | ) | ||||||||
December 31, 2012 | $ | — | $ | — | $ | 1,064 | $ | 1,064 | $ | 112 |
Level 3 Fair Value Instrument | Valuation Technique | Significant Unobservable Inputs | Range (Weighted Average) | Weighted Average Rate |
RECURRING | ||||
Interest rate lock commitments with customers | Quoted market prices | Pull-through expectations | 80% - 99% | 93.91% |
Forward sale commitments with investors | Quoted market prices | Pull-through expectations | 80% - 99% | 93.91% |
NONRECURRING | ||||
Impaired loans | Fair value of underlying collateral | Discount applied to the obtained appraisal | 0% - 10% | 5.49% |
OREO | Fair value of collateral | Discount applied to the obtained appraisal | 9% - 19% | 12.89% |
Mortgage servicing rights | Discounted cash flow | Weighted average prepayment speed | 7.5% - 10.5% | 7.50% |
31 |
32 |
June 30, | December 31, | ||||||||||||||
2013 | 2012 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Financial Assets | |||||||||||||||
Level 1 inputs: | |||||||||||||||
Cash, due from banks, and interest-bearing deposits at other financial institutions | $ | 16,413 | $ | 16,413 | $ | 9,413 | $ | 9,413 | |||||||
Level 2 inputs: | |||||||||||||||
Securities available-for-sale | 44,186 | 44,186 | 43,313 | 43,313 | |||||||||||
Loans held for sale | 13,146 | 13,146 | 8,870 | 8,870 | |||||||||||
Federal Home Loan Bank stock | 1,733 | 1,733 | 1,765 | 1,765 | |||||||||||
Accrued interest receivable | 1,292 | 1,292 | 1,223 | 1,223 | |||||||||||
Forward sale commitments with investors | 376 | 376 | — | — | |||||||||||
Paired off commitments with investors | 753 | 753 | — | — | |||||||||||
Level 3 inputs: | |||||||||||||||
Loans receivable, net | 280,411 | 312,523 | 274,949 | 306,695 | |||||||||||
Mortgage servicing rights | 1,785 | 2,047 | 1,064 | 1,064 | |||||||||||
Fair value interest rate locks with customers | 318 | 318 | 79 | 79 | |||||||||||
Forward sale commitments with investors | 773 | 773 | 54 | 54 | |||||||||||
Financial Liabilities | |||||||||||||||
Level 2 inputs: | |||||||||||||||
Deposits | 300,913 | 315,500 | 288,949 | 304,257 | |||||||||||
Borrowings | 13,664 | 13,732 | 6,840 | 7,059 | |||||||||||
Accrued interest payable | 18 | 18 | 12 | 12 | |||||||||||
Level 3 inputs: | |||||||||||||||
Fair value interest rate locks with customers | 190 | 190 | 34 | 34 | |||||||||||
Forward sale commitments with investors | 6 | 6 | 6 | 6 |
33 |
Balances | |||
Allocated shares | 25,921 | ||
Committed to be released shares | 12,960 | ||
Unallocated shares | 220,329 | ||
Total ESOP shares | 259,210 | ||
Fair value of unallocated shares (in thousands) | $ | 3,699 |
34 |
FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | ||
At or For the Three Months Ended | At or For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Numerator: | |||||||||||||||
Net Income (in thousands) | $ | 1,086 | $ | 621 | $ | 2,321 | $ | 898 | |||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per share- weighted average common shares outstanding | 3,019,797 | n/a(1) | 3,019,797 | n/a(1) | |||||||||||
Denominator for diluted earnings per share- weighted average common shares outstanding | 3,019,797 | n/a(1) | 3,019,797 | n/a(1) | |||||||||||
Basic earnings per share | $ | 0.36 | n/a(1) | $ | 0.77 | n/a(1) | |||||||||
Diluted earnings per share | $ | 0.36 | n/a(1) | $ | 0.77 | n/a(1) |
35 |
• | statements of our goals, intentions and expectations; |
• | statements regarding our business plans, prospects, growth and operating strategies; |
• | statements regarding the quality of our loan and investment portfolios; and |
• | estimates of our risks and future costs and benefits. |
• | 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; |
• | 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 the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act, changes in regulation policies and principles, or the interpretation of regulatory capital or other rules, including as a result of Basel III; |
• | 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; |
• | our ability to implement our branch expansion strategy; |
• | 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 elsewhere in this Form 10-Q and our other reports filed with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2012. |
• | not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the Company also will not be subject to the auditor attestation requirements of Section 404(b) as long as the Company is a “smaller reporting company,” which includes issuers that had a public float of less than $75 million as of the last business day of their most recently completed second fiscal quarter); |
• | reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements; and |
• | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. |
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
Non-performing assets- | |||||||
Non-accrual loans | $ | 2,294 | $ | 1,906 | |||
Other real estate owned | 1,805 | 2,127 | |||||
Other assets | 68 | 31 | |||||
Total non-performing assets | $ | 4,167 | $ | 4,064 |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101 | The following materials from the Company’s Annual Report on Form 10-Q for the quarter ended June 30, 2013, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Balance Sheets; (2) Consolidated Statements of Income; (3) Consolidated Statements of Comprehensive Income; (4) Consolidated Statements of Stockholders’ Equity; (5) Consolidated Statements of Cash Flows; and (6) Notes to Consolidated Financial Statements. * |
(*) | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
FS BANCORP, INC. | ||
Date: August 14, 2013 | By: | /s/Joseph C. Adams |
Joseph C. Adams, | ||
Chief Executive Officer | ||
(Duly Authorized Officer) | ||
Date: August 14, 2013 | By: | /s/Matthew D. Mullet |
Matthew D. Mullet | ||
Secretary, Treasurer and | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of FS Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15-(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 14, 2013 | /s/Joseph C. Adams | |
Joseph C. Adams Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of FS Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15-(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 14, 2013 | /s/Matthew D. Mullet | |
Matthew D. Mullet Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in the Report. |
Date: | August 14, 2013 | /s/Joseph C. Adams | |
Joseph C. Adams Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in the Report. |
Date: | August 14, 2013 | /s/Matthew D. Mullet | |
Matthew D. Mullet Chief Financial Officer |
Significant Concentration of Credit Risk
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Risks and Uncertainties [Abstract] | |
Significant Concentration of Credit Risk | SIGNIFICANT CONCENTRATION OF CREDIT RISK Most of the Company’s business activity is primarily with customers located in the greater Puget Sound area. The Company originates real estate and consumer loans and has concentrations in these areas. Generally loans are secured by deposit accounts, personal property, or real estate. Rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms. |
Deposits (Securities Pledged as Collateral Policy) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
security
|
Dec. 31, 2012
|
---|---|---|
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Number of securities pledged (in securities) | 2 | |
Securities pledged as collateral for public deposits | $ 1,200 | |
Deposits | 300,913 | 288,949 |
Federal Reserve. cash and Federal Reserve Bank deposits | 1,300 | 1,300 |
Washington State [Member]
|
||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Deposits | 1,900 | |
Washington State [Member] | Uninsured [Member]
|
||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
collateral requirement | $ 117 |
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|||||||
Income Statement [Abstract] | ||||||||||
Loans receivable | $ 5,233 | $ 4,341 | $ 10,171 | $ 8,475 | ||||||
Interest and dividends on investment securities and cash and cash equivalents | 203 | 163 | 440 | 328 | ||||||
Total interest income | 5,436 | 4,504 | 10,611 | 8,803 | ||||||
Deposits | 464 | 569 | 936 | 1,172 | ||||||
Borrowings | 48 | 44 | 87 | 90 | ||||||
Total interest expense | 512 | 613 | 1,023 | 1,262 | ||||||
NET INTEREST INCOME | 4,924 | 3,891 | 9,588 | 7,541 | ||||||
PROVISION FOR LOAN LOSSES | 600 | 550 | 1,200 | 1,065 | ||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 4,324 | 3,341 | 8,388 | 6,476 | ||||||
Service charges and fee income | 494 | 505 | 948 | 995 | ||||||
Gain on sale of loans | 2,228 | 445 | 3,779 | 551 | ||||||
Gain on sale of investment securities | 96 | 94 | 264 | 106 | ||||||
Other noninterest income | 113 | 78 | 203 | 193 | ||||||
Total noninterest income | 2,931 | 1,122 | 5,194 | 1,845 | ||||||
Salaries and benefits | 3,135 | 1,864 | 5,612 | 3,561 | ||||||
Operations | 759 | 624 | 1,517 | 1,131 | ||||||
Occupancy | 385 | 314 | 702 | 603 | ||||||
Data processing | 266 | 275 | 532 | 508 | ||||||
OREO fair value write-downs, net of loss on sales | 117 | 216 | 195 | 646 | ||||||
OREO expenses | 16 | 64 | 38 | 98 | ||||||
Loan costs | 345 | 198 | 645 | 337 | ||||||
Professional and board fees | 333 | 166 | 563 | 303 | ||||||
FDIC insurance | 67 | 56 | 123 | 119 | ||||||
Marketing and advertising | 158 | 67 | 243 | 120 | ||||||
Impairment (recovery) on mortgage servicing rights | 22 | (2) | (100) | (3) | ||||||
Total noninterest expense | 5,603 | 3,842 | 10,070 | 7,423 | ||||||
INCOME BEFORE PROVISION FOR INCOME TAX | 1,652 | 621 | 3,512 | 898 | ||||||
PROVISION FOR INCOME TAX | 566 | 0 | 1,191 | 0 | ||||||
NET INCOME | $ 1,086 | $ 621 | $ 2,321 | $ 898 | ||||||
Basic earnings per share | $ 0.36 | [1],[2] | $ 0.77 | [1],[2] | ||||||
Diluted earnings per share | $ 0.36 | [1],[2] | $ 0.77 | [1],[2] | ||||||
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Loans Receivable and Allowance For Loan Losses
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable and Allowance For Loan Losses | LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES The composition of the loan portfolio was as follows at June 30, 2013 and December 31, 2012:
The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the manner in which management monitors performance and credit quality. The three loan portfolio segments are: (a) Real Estate Loans, (b) Consumer Loans and (c) Commercial Business Loans. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes: Real Estate Loans Commercial Lending. Loans originated by the Company primarily secured by income producing properties, including retail centers, warehouses and office buildings located in our Puget Sound market area. Construction and Development Lending. Loans originated by the Company for the construction of and secured by commercial real estate and one-to-four-family residences and tracts of land for development, primarily in our Puget Sound market area. Home Equity Lending. Loans originated by the Company secured by second mortgages on one-to-four-family residences, primarily in our Puget Sound market area. One-to-Four-Family Real Estate Lending. Loans originated by the Company secured by first mortgages on one-to-four-family residences, primarily in our Puget Sound market area. NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) Multi-family Lending. Apartment lending (more than four units) to current banking customers and community reinvestment loans for low to moderate income individuals in our Puget Sound market area. Consumer Lending Indirect Home Improvement. Fixture secured loans are originated by the Company for home improvement and are secured by the personal property installed in, on or at the borrower’s real property, and may be perfected with a UCC-2 financing statement filed in the county of the borrower’s residence. The Company originates indirect home improvement loans throughout the States of Washington, Oregon and California. Automobile and Recreational. Loans originated by the Company secured by boats and automobiles to borrowers in our Puget Sound market area. Other Consumer and Home Improvement Loans. Loans originated by the Company, including direct home improvement loans, loans on deposits and other consumer loans to borrowers in our Puget Sound market area. Commercial Business Loans Commercial Business Lending. Commercial business loans originated by the Company to local small and mid-sized businesses in our Puget Sound market area are secured by accounts receivable, inventory or property, plant and equipment. Commercial business loans are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) The following table details activity in the allowance for loan losses by loan categories:
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued)
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) Information pertaining to aging analysis of past due loans are summarized as follows:
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued)
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) The following tables provide additional information about our impaired loans that have been segregated to reflect loans for which an allowance for credit losses has been provided and loans for which no allowance has been provided:
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) Credit Quality Indicators As part of the Company’s on-going monitoring of credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grading of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans and (v) the general economic conditions in the Company’s market. The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 considered “Pass” and loans in risk grades 7 to 10 are reported as classified loans in the Company's allowance for loan loss analysis. A description of the 10 risk grades is as follows:
Consumer, Home Equity and One-to-Four-Family Real Estate Loans Homogeneous loans are risk rated based upon the Federal Deposit Insurance Corporation's Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, recreational, automobile, direct home improvement and other, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification Policy, loans that are current or less than 90 days past due are graded “Pass” and risk graded "4" internally. Loans that are past due more than 90 days are classified “Substandard” and risk graded "8" internally. At 120 days past due, homogeneous loans are charged off based on the value of the collateral less cost to sell. NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) The following tables summarize risk rated loan balances by category:
NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Continued) Troubled Debt Restructured Loans The Company had five and three troubled debt restructured ("TDR") loans still on accrual and included in impaired loans at June 30, 2013 and at December 31, 2012, respectively. In addition, at June 30, 2013 and December 31, 2012 the Company had two and three loans on non-accrual of $807,000 and $892,000, respectively. The two non-accrual loans at June 30, 2013 consisted of one commercial real estate loan and one home equity loan. The Company had no commitments to lend additional funds on these restructured loans. A summary of TDR loans at the dates indicated is as follows:
The following table presents loans that became TDRs during the six months ended June 30, 2013:
During the three month period ended June 30, 2013 and June 30, 2012, the Company restructured no loans and one commercial business loan of $70,000 considered to be troubled debt restructured, respectively. No other TDRs that were modified in the previous 12 months subsequently defaulted in the reporting period. During the six month period ended June 30, 2013, the Company restructured one loan of $35,000 considered to be troubled debt restructured which subsequently defaulted and was fully charged off during the same period. For the six month period ended June 30, 2012, the Company restructured one commercial business loan of $70,000 considered to be troubled debt restructured. No other TDRs that were modified in the previous 12 months subsequently defaulted in the reporting period. The recorded investments in the table above are period end balances that are inclusive of all partial pay-downs and charge-offs since the modification date. Loans modified in a TDR that were fully paid down, charged off, or foreclosed upon by the period end are not included. TDRs in the tables above were the result of interest rate modifications and extended payment terms. The Company has not forgiven any principal on the above loans. |
Securities Available-for-sale (Tables)
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation | The carrying amount of securities available-for-sale and their approximate fair values at June 30, 2013 and December 31, 2012 were as follows:
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Schedule of Available for Sale Securities by Contractual Mataurity | The contractual maturities of securities available-for-sale at June 30, 2013 were as follows:
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Schedule of Proceeds and Realized Gain (Loss) | The proceeds and resulting gains, computed using specific identification, from sales of securities available-for-sale were as follows for the periods ended:
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Regulatory Capital
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Jun. 30, 2013
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Regulatory Capital Requirements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital | REGULATORY CAPITAL FS Bancorp, Inc. and its subsidiary bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Company must meet specific capital adequacy guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. NOTE 11 – REGULATORY CAPITAL (Continued) Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 Capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of Tier 1 and total capital (as defined) to risk-weighted assets (as defined). As of June 30, 2013 and December 31, 2012, the Bank was categorized as "well capitalized" under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total Risk-Based, Tier 1 Risk-Based, and Tier 1 Leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category. At June 30, 2013, the Bank exceeded all regulatory capital requirements with Tier 1 Leverage-Based Capital, Tier 1 Risk- Based Capital and Total Risk-Based Capital ratios of 13.1%, 15.7%, and 16.9%, respectively. The Bank’s actual capital amounts and ratios at June 30, 2013 and December 31, 2012 are also presented in the table.
NOTE 11 - REGULATORY CAPITAL (Continued) Regulatory capital levels reported above differ from the Company's total equity, computed in accordance with U.S. GAAP.
The Company exceeded all regulatory capital requirements as of June 30, 2013. The regulatory capital ratios calculated for the Company as of June 30, 2013 were 16.3% for Tier 1 Leverage-Based Capital, 19.5% for Tier 1 Risk-Based Capital and 20.7% for Total Risk-Based Capital. |
Derivatives (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Interest Rate Lock Commitments
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Derivative [Line Items] | |
Notional amount of interest rate derivatives | $ 22,000 |
Fair value of interest rate derivatives | 128 |
Best Effort Forward Commitments
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Derivative [Line Items] | |
Notional amount of other derivatives, not designated as hedging instruments | 11,300 |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 767 |
Forward TBA Mortgage Backed Securities
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Derivative [Line Items] | |
Notional amount of other derivatives, not designated as hedging instruments | 19,500 |
Fair value of other derivatives, not designated as hedging instruments | 376 |
Mortgage-backed Securities, Investor Paired Off Forward Sales [Member]
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Derivative [Line Items] | |
Notional amount of other derivatives, not designated as hedging instruments | 22,000 |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 753 |
Schedule of Sales of Available for Sale Securities (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from Sale of Available-for-sale Securities | $ 4,718 | $ 1,647 | $ 8,786 | $ 2,432 |
Available-for-sale Securities, Gross Realized Gains | 96 | 94 | 264 | 106 |
Securities available-for-sale, Gross Losses | $ 0 | $ 0 | $ 0 | $ 0 |
Other Real Estate Owned (Tables)
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Jun. 30, 2013
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Real Estate Owned | The following table presents the activity related to OREO for the three and six months ended June 30, 2013 and 2012:
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Mortgage Servicing Rights (Tables)
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Jun. 30, 2013
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Fair Value, Off-balance Sheet Risk [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Mortgage Servicing Rights | The following table summarizes mortgage servicing rights activity for the three and six months ended June 30, 2013 and 2012:
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Mortgage Servicing Rights Policy (Details) (Mortgage servicing rights, USD $)
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Jun. 30, 2013
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Dec. 31, 2012
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Mortgage servicing rights
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Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
The unpaid principal balances of mortgage loans serviced | $ 199,600,000 | $ 130,500,000 |
Fair market value of the mortgage servicing rights’ asset | $ 2,000,000 | $ 1,100,000 |
Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $)
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0 Months Ended | ||
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Jul. 09, 2012
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Jun. 30, 2013
branch
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Dec. 31, 2012
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Schedule of Accounting Policies [Line Items] | |||
Number of bank branches | 7 | ||
Common shares issued (in shares) | 3,240,125 | ||
Price per share (in dollars per share) | $ 10.00 | ||
Proceeds from stock issuance | $ 32,400,000 | ||
Cost of conversion and issuance of stock | 2,500,000 | ||
Percentage of common shares purchased under ESOP | 8.00% | ||
Total ESOP shares | 259,210 | 259,210 | |
Interest-bearing deposits with other financial institutions | 14,117,000 | 5,410,000 | |
Certificates of deposit | 2,600,000 | 2,600,000 | |
1st Security Bank of Washington
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Schedule of Accounting Policies [Line Items] | |||
Capital contributions | $ 15,500,000 |
Other Real Estate Owned (Schedule) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Other Real Estate [Roll Forward] | ||||
Beginning balance | $ 1,956 | $ 2,789 | $ 2,127 | $ 4,589 |
Other Real Estate Owned Additions | 36 | 921 | 36 | 921 |
Fair value write-downs | (117) | (216) | (195) | (594) |
Other Real Estate Owned Disposition of Assets | (70) | (544) | (163) | (1,966) |
Ending balance | $ 1,805 | $ 2,950 | $ 1,805 | $ 2,950 |
Fair Value of Financial Instruments (Tables)
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Available For Sale Securities Measured At Fair Value On A Recurring Basis | The following tables present securities available-for-sale measured at fair value on a recurring basis:
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Schedule of Interest Rate Lock Commitments Measured at Fair Value on Recurring Basis | The following tables present the fair value of interest rate lock commitments with customers, forward sale commitments with investors and paired off commitments with investors measured at their fair value on a recurring basis at June 30, 2013 and December 31, 2012.
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Forward Sale Commitments with Investors [Table Text Block] |
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Paired Off Commitments with Investors [Table Text Block] |
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Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets | The following table presents the impaired loans measured at fair value on a nonrecurring basis and the total valuation allowance or charge-offs on these loans, which represents fair value adjustments for the six months ended June 30, 2013 and the year ended December 31, 2012.
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Schedule of Other Real Estate Owned and Repossessed Assets Measured at Fair Value on Nonrecurring Basis | The following table presents OREO measured at fair value on a nonrecurring basis at June 30, 2013 and December 31, 2012, and the total losses on these assets, which represents fair value adjustments and other losses for the six months ended June 30, 2013 and the year ended December 31, 2012.
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Schedule of Mortgage Servicing Rights Measured at Fair Value on Nonrecurring Basis | The following table presents mortgage servicing rights measured at fair value on a nonrecurring basis at June 30, 2013 and December 31, 2012, and the total (recoveries)/losses on these assets, which represents fair value adjustments and other (recoveries)/losses for the six months ended June 30, 2013 and the year ended December 31, 2012.
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Schedule of Fair Value of Financial Instruments Measured under a Level 3 Unobservable Input | The fair value of financial instruments measured under a Level 3 unobservable input on a recurring and nonrecurring basis at June 30, 2013 is shown in the following table.
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Fair Value, by Balance Sheet Grouping | The estimated fair values of the Company’s financial instruments were as follows:
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Fair Value of Financial Instruments Forward Sale Commitments with Investors (Details) (Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Forward Sale Commitments with Investors | $ 1,143 | $ 48 |
Fair Value, Inputs, Level 1 [Member]
|
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Forward Sale Commitments with Investors | 0 | 0 |
Fair Value, Inputs, Level 2 [Member]
|
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Forward Sale Commitments with Investors | 376 | 0 |
Level 3
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Forward Sale Commitments with Investors | $ 767 | $ 48 |
(Schedule of Shares Under ESOP) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
Jun. 30, 2013
|
Jul. 09, 2012
|
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Employee Stock Ownership Plan (ESOP), Shares in ESOP [Abstract] | ||
Allocated shares | 25,921 | |
Unallocated shares | 12,960 | |
Employee Stock Ownership Plan (ESOP), Number of Suspense Shares | 220,329 | |
Total ESOP shares | 259,210 | 259,210 |
Fair value of unallocated shares (in thousands) | $ 3,699 |
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