First Savings Financial Group Inc (FSFG) SEC Filing 10-Q Quarterly report for the period ending Monday, December 31, 2018

Exhibit 99.1

FIRST SAVINGS FINANCIAL GROUP, INC. REPORTS FINANCIAL RESULTS FOR THE FIRST FISCAL QUARTER ENDED DECEMBER 31, 2018

Clarksville, Indiana — January 29, 2019. First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $2.9 million, or $1.24 per diluted share, for the quarter ended December 31, 2018 compared to net income of $3.4 million, or $1.44 per diluted share, for the quarter ended December 31, 2017. Net income for the quarter ended December 31, 2018 was negatively impacted by interest expense of $245,000, net of taxes, related to the Company’s issuance of $20.0 million of subordinated debt in September 2018, which amounted to $0.10 per diluted share for the quarter.

Net interest income increased $1.5 million, or 18.9%, to $9.6 million for the quarter ended December 31, 2018 as compared to the same quarter in 2017. The improved net interest income performance is due to a $2.4 million increase in interest income, which was partially offset by an $852,000 increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $130.5 million, from $859.3 million for 2017 to $989.8 million for 2018, and an increase in the weighted average tax-equivalent yield, from 4.52% for 2017 to 4.88% for 2018. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $67.8 million, from $709.3 million for 2017 to $777.1 million for 2018, and an increase in the average cost of interest-bearing liabilities, from 0.77% for 2017 to 1.15% for 2018. Increases for the 2018 quarter related to subordinated debt included interest expense of $322,000, including amortization of debt issuance costs, and $19.7 million in the average balance of interest-bearing liabilities, including debt issuance costs. The increase in the average cost of interest-bearing liabilities for the 2018 quarter was due primarily to the subordinated debt’s average cost of 6.55%, including amortization of debt issuance costs. Additional details are included in the “Summarized Consolidated Average Balance Sheets” table at the end of this release.

The Company recognized $315,000 in provision for loan losses for the quarter ended December 31, 2018, compared to $462,000 of provision for loan losses recognized in the same quarter in 2017. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $335,000, from $4.3 million at September 30, 2018 to $4.6 million at December 31, 2018. The Company recognized net charge-offs of $18,000 for the quarter ended December 31, 2018 compared to $43,000 for the same quarter in 2017.

Noninterest income increased $2.9 million for the quarter ended December 31, 2018 as compared to the same quarter in 2017. The increase was due primarily to an increase in mortgage banking income of $3.2 million, which was partially offset by a decrease in the net gain on sale of loans guaranteed by the U.S. Small Business Administration (“SBA”) of $575,000. 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 and of which the Bank owns 51% with the option to purchase the minority interest in September 2020. Despite the 51% ownership by the Bank, gross revenues and expenses related to Q2 are reported in the consolidated income statements and the net income attributable to noncontrolling interests is then subtracted 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 Income Statement Information” table at the end of this release.