CLARKSVILLE, Ind., Feb. 05, 2020 (GLOBE NEWSWIRE) — First Savings Financial Group, Inc. (NASDAQ: FSFG – news) (the “Company”), the holding company for First Savings Bank (the “Bank”), today reported net income of $3.4 million, or $1.44 per diluted share, for the quarter ended December 31, 2019 compared to net income of $2.9 million, or $1.24 per diluted share, for the quarter ended December 31, 2018, resulting in an increase of 16.1% on a per share basis. 
Net interest income increased $1.3 million, or 13.7%, to $10.9 million for the quarter ended December 31, 2019 as compared to the same quarter in 2018.  The increase in net interest income was due to a $2.0 million increase in interest income, which was partially offset by a $650,000 increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $176.0 million, from $989.8 million for 2018 to $1.17 billion for 2019, partially offset by a decrease in the weighted average tax-equivalent yield, from 4.88% for 2018 to 4.82% for 2019.  Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $158.0 million, from $777.1 million for 2018 to $935.1 million for 2019, and an increase in the average cost of interest-bearing liabilities, from 1.15% for 2018 to 1.23% for 2019.  The increase in the average cost of interest-bearing liabilities for 2019 was due primarily to increasing market interest rates on deposits including brokered deposits.  Additional details are included in the “Summarized Consolidated Average Balance Sheets” table at the end of this release. The Company recognized $505,000 in provision for loan losses for the quarter ended December 31, 2019, compared to $315,000 in provision for loan losses recognized in 2018.  Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $328,000, from $5.2 million at September 30, 2019 to $5.5 million at December 31, 2019.  The Company recognized net charge-offs of $15,000 for the quarter ended December 31, 2019 compared to $18,000 for the same quarter in 2018. Noninterest income increased $12.3 million for the quarter ended December 31, 2019 as compared to the same quarter in 2018.  The increase was due primarily to an increase in mortgage banking income of $12.5 million partially offset by a decrease in the net gain on sale of loans guaranteed by the SBA of $203,000.  The increase in mortgage banking income is due to production from the secondary-market residential mortgage lending segment that commenced operations in April 2018.  The Bank’s SBA lending activities are performed under Q2 Business Capital, LLC (“Q2”), which specializes in the origination and servicing of SBA loans.  The Bank owns 51% of Q2 with the option to purchase the minority interest in September 2020.  Gross revenues and expenses related to Q2 are reported in the consolidated statements of income, and the net income or net loss attributable to noncontrolling interests is then subtracted from (in the case of net income) or added to (in the case of net loss) net income to arrive at net income attributable to the Company.  Additional details regarding the financial performance of the mortgage banking and SBA lending segments are included in the “Segmented Statements of Income Information” table at the end of this release. Noninterest expense increased $12.9 million for the quarter ended December 31, 2019 as compared to the same quarter in 2018.  The increase was due primarily to increases in compensation and benefits, advertising, and occupancy and equipment expense of $10.6 million, $1.1 million and $597,000, respectively.  The increase in compensation and benefits expense is attributable to the addition of new employees to support the growth of the Company, primarily its mortgage banking and SBA lending activities, and normal salary and benefits adjustments.  The increase in advertising is primarily due to the mortgage banking segment.  The increase in occupancy and equipment expense is primarily attributable to increases in lease and rental, depreciation and equipment, and software licensing expenses that are all primarily related to the mortgage banking segment.The Company recognized income tax expense of $638,000 for the quarter ended December 31, 2019, for an effective tax rate of 15.0%, as compared to income tax expense of $522,000, for an effective tax rate of 14.4%, for 2018.  The increase in the effective tax rate for 2019 compared to 2018 is primarily due to an increase in taxable income and a decrease in bond tax credits.Comparison of Financial Condition at December 31, 2019 and September 30, 2019Total assets increased $70.0 million, from $1.22 billion at September 30, 2019 to $1.29 billion at December 31, 2019.  Net loans increased $41.0 million during the quarter ended December 31, 2019, due primarily to continued growth in the commercial real estate and SBA loan portfolios.  Residential mortgage loans held for sale also increased by $13.1 million during the quarter ended December 31, 2019 due to increased production from the mortgage banking segment.  Total liabilities increased $67.1 million primarily due to a $51.2 million increase in total deposits and a $17.0 million increase in Federal Home Loan Bank borrowings.
Common stockholders’ equity increased $2.7 million, from $121.1 million at September 30, 2019 to $123.8 million at December 31, 2019, due primarily to retained net income of $3.2 million.  At December 31, 2019 and September 30, 2019, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.Prior Period RestatementOn November 19, 2019, the Company filed with the Securities and Exchange Commission (“SEC”) a Current Report on Form 8-K to report the Company’s conclusion that its interim consolidated financial statements, and related notes, contained in its Form 10-Q for the period ended June 30, 2019 should no longer be relied upon.  The accounting matters underlying this conclusion relate primarily to significant accounting assumptions used in the fair value calculations for interest rate lock commitments and mortgage loans held-for-sale relating to the Company’s mortgage banking operations segment and unrecognized accruals for incentive compensation related to such segment.  On December 4, 2019, the Company filed with the SEC an amended Form 10-Q for the period ended June 30, 2019, containing restated interim consolidated financial statements, and related noted, for the period then ended.  All financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated accordingly.First Savings Bank has fifteen offices in the Indiana communities of Clarksville, Jeffersonville, Charlestown, Sellersburg, New Albany, Georgetown, Corydon, Lanesville, Elizabeth, English, Marengo, Salem, Odon and Montgomery.  Access to First Savings Bank accounts, including online banking and electronic bill payments, is available anywhere with Internet access through the Bank’s website at www.fsbbank.net.This release may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather, they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions.Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company’s filings with the Securities and Exchange Commission.Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the Company or on its behalf.  Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.Contact:
Tony A. Schoen, CPA
Chief Financial Officer
812-283-0724
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