First Savings Financial Group, Inc. (FSFG) SEC Filing 10-Q Quarterly Report for the period ending Sunday, December 31, 2023

Exhibit 99.1

FIRST SAVINGS FINANCIAL GROUP, INC. REPORTS FINANCIAL RESULTS FOR THE FIRST FISCAL QUARTER ENDED DECEMBER 31, 2023

Jeffersonville, Indiana — January 30, 2024. First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $920,000, or $0.13 per diluted share, for the quarter ended December 31, 2023 compared to net income of $2.9 million, or $0.41 per diluted share, for the quarter ended December 31, 2022. The core banking segment reported net income of $4.0 million, or $0.59 per diluted share for the quarter ending December 31, 2023.

During the quarter ended December 31, 2023, the Company ceased its national originate-to-sell residential mortgage banking operations, consummated the bulk sale of substantially all residential mortgage loan servicing rights with Nationstar Mortgage LLC (“Nationstar”), and entered into a letter of intent for the mini-bulk sale of its remaining residential mortgage servicing rights, which were valued at December 31, 2023 at the net expected realizable value on the expected close date of February 29, 2024. As a result of these actions, the Company does not anticipate recognizing material financial effects to its future financial performance related to the former mortgage banking operations. Notwithstanding the forgoing, the Company has an accrued estimated contingent liability of $1.1 million for possible reimbursement to Nationstar for mortgage servicing rights it purchased that are associated with loans that experience early payoffs (“EPOs”) and early payment defaults (“EPDs”) in the first 90 days following the close of the sale on November 30, 2023. Depending on repayment activity related to such during that 90-day period, the Company may recognize a material financial effect upon final settlement with Nationstar in the quarter ending March 31, 2024. The Company continues to originate residential mortgage loans in its local southern Indiana markets and first-lien home equity lines of credit from its loan production office in Franklin, Tennessee.

The Company modified the manner in which it recognizes dividends from the Federal Home Loan Bank of Indianapolis, which adversely impacted the Company’s net interest margin by approximately 8 basis points for the quarter ended December 31, 2023. This adverse effect will not be recognized in future quarter.

Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “While the former national mortgage banking division was a financial success for several years, we are pleased to have finalized the winddown of those operations and pivot to improving financial results. The core banking segment performed reasonably well while the SBA lending segment underperformed due to higher than anticipated provisions for credit losses. We continue to move on the right trajectory and expect the financial performance of both the core banking and SBA lending segments to improve. We continue our focus on reducing balance sheet and operating inefficiencies; strong asset quality; selective high-quality lending; deposit growth; and improvement of liquidity, capital and interest rate sensitivity positions. We believe these measures will deliver increasing financial results and shareholder value.”

Results of Operations for the Three Months Ended December 31, 2023 and 2022

Net interest income decreased $2.1 million, or 13.2%, to $14.1 million for the three months ended December 31, 2023 as compared to the same period 2022. The decrease in net interest income was due to a $7.3 million increase in interest expense, partially offset by a $5.2 million increase in interest income. Interest income increased due to an increase in the average balance of interest-earning assets of $190.5 million, from $1.98 billion for 2022 to $2.17 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.87% for 2022 to 5.37% for 2023. The increase in the average balance of interest-earning assets was due primarily to a $274.5 million increase in the average balance of loans, partially offset by a decrease in the average balance of investment securities of $89.8 million. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $265.8 million, from $1.61 billion for 2022 to $1.88 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 1.79% for 2022 to 3.10% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates for FHLB borrowings, brokered deposits, and money market deposit accounts as a result of increased market interest rates due to competition and higher U.S. Treasury rates.