AJS Bancorp, Inc. Reports Third Quarter and Year to Date 2017 Net Income and Earnings per Share

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1 FOR IMMEDIATE RELEASE Contact: Jerry A. Weberling, Chief Executive Officer, President and Chief Financial Officer (708) AJS Bancorp, Inc. Reports Third Quarter and Year to Date 2017 Net Income and Earnings per Share MIDLOTHIAN, IL November 6, 2017 AJS Bancorp, Inc. (the Company ) (OTC Pink: AJSB), the holding company for A.J. Smith Federal Savings Bank (the Bank ), announced third quarter 2017 net income of $111,000, or $0.05 per share, compared to net income of $110,000, or $0.05 per share, for the third quarter of Comparison of Operating Results for the Three Months Ended September 30, 2017 and 2016 Net income for the three months ended September 30, 2017 was $111,000, or $0.05 per share, as compared to net income of $110,000, or $0.05 per share, for the same period in The $1,000 increase in net income for the three months ended September 30, 2017 compared to the prior year period was mainly attributable to a $40,000 increase in net interest income and a $174,000 decrease in income tax expense, substantially offset by a $95,000 increase in the provision for loan losses, and a $42,000 decrease in non-interest income and a $76,000 increase in non-interest expense. Net interest income increased by $40,000, or 3.7%, to $1.1 million for the three months ended September 30, 2017, as compared to the same period in The increase was primarily due to a 14 basis points, or 6.0% increase in the net interest margin to 2.48% for the three months ended September 30, 2017 compared to 2.34% for the same period in 2016, partially offset by a $3.9 million, or 2.0% decrease in the level of average interest-earning assets. The Company recorded a $65,000 provision for loan losses for the three months ended September 30, 2017 compared to a $30,000 credit to the provision for loan losses for the three months ended September 30, The current quarter had net charge-offs of $106,000. The credit provision in the prior year quarter was primarily due to a decline in historical loss factors in all loan categories, a $3.1 million reduction in the level of substandard assets and having net recoveries of $4,267. The allowance for loan losses was $796,000, or 0.75% of total loans, at September 30, 2017 compared to $825,000, or 0.73% of total loans, at December 31, The increase in the allowance for loan losses as a percentage of total loans was primarily due to the $7.8 million decrease in the loan portfolio. Non-interest income decreased $42,000 to $122,000 for the three months ended September 30, 2017, from $164,000 for the three months ended September 30, The decrease was primarily due to a $25,000 decrease in other income due to lower correspondent fee income and lower rental income due to having fewer tenants. Non-interest expense increased $76,000, or 6.7%, to $1.2 million for the three months ended September 30, 2017 compared to $1.1 million for the same period in The increase was primarily due to a $68,000 increase in compensation and employee benefit costs related to higher one-time costs incurred related to our former chief executive officer s retirement in August 2017, a $12,000 increase in other real estate owned (income) expense due to higher carrying costs related to other real estate owned and a $26,000 increase in other expense primarily due to higher loan related legal expenses and higher telephone expense. These increases were partially offset by a $12,000 decrease in federal deposit insurance expense due to a decrease in the insurance premium rate for smaller financial institutions along with a decrease in asset size and lower professional and regulatory costs due to deregistering from the SEC in the fourth quarter of We recorded an income tax benefit of $127,000 for the quarter ended September 30, 2017 compared to an income tax expense of $47,000 for the same quarter in The decrease in income tax expense was primarily due to recording a $107,000 income tax benefit related to the increase in the deferred tax asset related to our state net operating loss carryforwards due to the increase in the Illinois income tax rate from 7.75% to 9.50% effective July 1, In addition, the tax benefit was impacted by the lower amount of pretax income in 2017 and larger tax sheltering impact of the earnings on bank owned life insurance. 1

2 Comparison of Operating Results for the Nine Months Ended September 30, 2017 and 2016 Net income for the nine months ended September 30, 2017 was $284,000, or $0.14 per share, a decrease of $148,000 from net income of $432,000, or $0.21 per share for the nine months ended September 30, The decrease was mainly attributable to a $330,000 increase in the provision for loan losses, and a $72,000 decrease in gains on sales of securities, partially offset by a $43,000 decrease in non-interest expense and a $240,000 decrease in income tax expense. Net interest income was flat at $3.4 million for the nine months ended September 30, 2017 and The net interest margin increased by six basis points to 2.43% for the nine months ended September 30, 2017 compared to 2.37% for the nine months ended September 30, 2016 as the decline in the average cost of interest-bearing liabilities driven by the repayment of higher cost FHLB advances outpaced the decline in yield on interest-earning assets. The net interest rate spread increased six basis points to 2.35% for the nine months ended September 30, 2017 compared to 2.29% for the nine months ended September 30, We recorded a provision for loan losses of $190,000 for the nine months ended September 30, 2017 and a credit provision for loan losses of $140,000 for the nine months ended September 30, The current year period had net charge-offs of $219,000 compared to net charge-offs of $10,000 in the same period in the prior year. The allowance for loan losses was $796,000, or 0.75% of total loans, at September 30, 2017 compared to $825,000, or 0.73% of total loans, at December 31, Non-interest income decreased $119,000 to $423,000 for the nine months ended September 30, 2017, from $542,000 for the nine months ended September 30, The decrease was primarily due to a $72,000 decrease in gain on securities sales due to less sales activity in 2017, and a $22,000 decrease in rental income due to having fewer tenants. Non-interest expense decreased $43,000, or 1.2%, to $3.4 million for the nine months ended September 30, 2017, compared to the same period in The decrease was primarily due to lower occupancy costs of $88,000 due to lower real estate taxes and maintenance expenses, a $48,000 decrease in federal deposit insurance expense due to the Bank s improved regulatory condition and smaller asset size and lower professional and regulatory costs due to deregistering from the SEC in the fourth quarter of 2016, partially offset by an $81,000 increase in compensation and benefits primarily related to higher one-time costs incurred related to our former chief executive officer s retirement in August 2017 and normal salary increases, and a $42,000 increase in other expense primarily due to higher loan related legal expenses. The retirement of the chief executive officer and the assumption of his title and responsibilities by the chief financial officer is expected to result in an annual reduction in non-interest expenses of approximately $260,000. We recorded an income tax benefit of $55,000 for the nine months ended September 30, 2017 as compared to income tax expense of $185,000 for the nine months ended September 30, The $240,000 decrease in income tax expense was primarily due to $388,000 decrease in income before income taxes for the nine months ended September 30, 2017 compared to the same period in 2016, along with recording a $107,000 income tax benefit related to the increase in the deferred tax asset related to our state net operating loss carryforwards due to the increase in the Illinois income tax rate from 7.75% to 9.50% effective July 1, Comparison of Financial Condition at September 30, 2017 and December 31, 2016: Total consolidated assets as of September 30, 2017 were $200.0 million, a decrease of $2.1 million, or 1.0%, from $202.1 million at December 31, The decrease was primarily due to a decline in net loans, partially offset by an increase in cash and cash equivalents. Cash and cash equivalents increased $6.2 million, or 19.8%, to $37.5 million at September 30, 2017 from $31.3 million at December 31, The primary reason for the increase in cash and cash equivalents was due to increased liquidity as a result of a $7.8 million decrease in net loans, partially offset by a $2.0 million decrease in deposits. Securities available-for-sale decreased slightly to $44.1 million at September 30, 2017 from $44.3 million at December 31, The decrease was primarily due to securities available-for-sale principal repayments of $5.9 million, partially offset by new securities purchases of $5.7 million and an increase in the fair value of available-for-sale securities of $373,000 as a result of the decrease in interest rates during the nine months ended September 30,

3 Net loans decreased $7.8 million, or 6.9%, to $105.2 million at September 30, 2017 from $113.0 million at December 31, The decrease was primarily attributable to a $7.1 million decline in our one-to four- family and home equity loan portfolios during the nine months ended September 30, The decrease in the one-to four-family portfolio was due in part to our reluctance to originate many 30 year fixed rate mortgage loans for portfolio in the current low interest rate environment and general weakness in mortgage loan activity. Home equity loans decreased $608,000, or 12.6%, to $4.2 million at September 30, 2017 from $4.8 million at December 31, 2016 as floating rate lines of credit continue to mature and convert to fixed rate loans. Total deposits decreased $2.0 million, or 1.2%, to $163.2 million at September 30, 2017 from $165.2 million at December 31, Passbook account balances decreased $2.1 million, or 2.8%, to $70.4 million at September 30, 2017 from $72.5 million at December 31, NOW and checking account balances increased $0.7 million, or 1.9%, to $36.4 million at September 30, 2017 from $35.7 million at December 31, Money market accounts increased $5.0 million, or 101.6%, to $9.9 million at September 30, 2017 from $4.9 million at December 31, 2016 primarily due to an increase in municipal deposits. The increase in our lower cost core deposits, which we consider to be our passbook, NOW and checking accounts were partially offset by a $5.7 million, or 10.9% decrease in certificates of deposit to $46.5 million at September 30, 2017 from $52.1 million at December 31, The decline in the balance of certificates of deposit was attributable to legacy certificate of deposit customers seeking higher yields as accounts re-price to current lower market interest rates upon maturity and increased rate competition. Total stockholders equity increased $285,000 to $32.3 million at September 30, 2017 from $32.0 million at December 31, Stockholders equity increased due to net income of $284,000 and a decrease in the net unrealized loss on securities classified as available-for-sale of $229,000 and net stock related compensation benefits of $75,000 for the nine months ended September 30, 2017, which was partially offset by cash dividends paid on common stock of $304,000 during the same period. Book value per share was $15.03 at September 30, 2017 as compared to $14.90 at December 31, About AJS Bancorp, Inc. AJS Bancorp, Inc. is the holding company for A.J. Smith Federal Savings Bank which was founded in A.J. Smith Federal Savings Bank is headquartered in Midlothian, Illinois and has two branches in Orland Park, Illinois. The Company had total consolidated assets of $200.0 million and total deposits of $163.2 million as of September 30, Additional information about the Company is available at Safe-Harbor This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as will, expected, believe, and prospects, involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, and market disruptions. AJS Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under applicable rules and regulations. ************* 3

4 AJS BANCORP, INC. Consolidated Statements of Financial Condition (Unaudited) September 30, 2017 and December 31, 2016 (Dollars in thousands, except per share data) September 30, December 31, ASSETS Cash and cash equivalents $ 37,451 $ 31,256 Securities available-for-sale 44,087 44,286 Securities held-to-maturity (fair value: 2017 $221; $273) Loans, net (allowance: $796; $825) 105, ,009 FHLB of Chicago stock Premises and equipment 3,084 3,251 Bank-owned life insurance 6,209 6,078 Other real estate owned Accrued interest receivable Other assets 2,705 2,806 Total assets $ 199,978 $ 202,055 LIABILITIES AND STOCKHOLDERS EQUITY Liabilities: Deposits $ 163,170 $ 165,204 Advance payments by borrowers for taxes and insurance 1,299 2,126 Other liabilities and accrued interest payable 3,190 2,691 Total liabilities 167, ,021 Commitments and contingent liabilities Stockholders equity: Preferred stock, $0.01 par value, 50,000,000 shares authorized; none issued - - Common stock, $0.01 par value, 100,000,000 shares authorized; ,149,860 shares issued; ,149,860 shares issued Additional paid-in capital 13,780 13,757 Retained earnings 19,906 19,926 Accumulated other comprehensive income (loss) (118) (347) Unearned stock awards (302) (355) Unearned ESOP shares (968) (968) Total stockholders equity 32,319 32,034 Total liabilities and stockholders equity $ 199,978 $ 202,055 4

5 AJS BANCORP, INC. Consolidated Statements of Operations (Unaudited) Three Months and Nine Months Ended September 30, 2017 and 2016 (Dollars in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, Interest income: Loans $ 977 $ 1,029 $ 2,986 $ 3,173 Securities Interest-earning deposits Total interest income 1,256 1,212 3,765 3,768 Interest expense: Deposits Federal Home Loan Bank advances Total interest expense Net interest income 1,134 1,094 3,401 3,383 Provision (credit) for loan losses 65 (30) 190 (140) Net interest income after provision (credit) for loan losses 1,069 1,124 3,211 3,523 Non-interest income: Service fees Rental income Earnings on bank-owned life insurance Security gains Other real estate owned gains (losses) (4) Other Total non-interest income Non-interest expense: Compensation and employee benefits ,851 1,770 Occupancy expense Data processing expense Advertising and promotion Professional and regulatory Postage and supplies Bank security Federal deposit insurance Other real estate owned (income) expense/impairment (8) Other Total non-interest expense 1,207 1,131 3,405 3,448 Income (loss) before income taxes (16) Income tax expense (benefit) (127) 47 (55) 185 Net income $ 111 $ 110 $ 284 $ 432 Earnings per share: Basic $ 0.05 $ 0.05 $ 0.14 $ 0.21 Diluted $ 0.05 $ 0.05 $ 0.14 $ 0.21 Weighted average common share and common share equivalents outstanding: Basic 2,028,751 2,016,408 2,023,555 2,022,254 Diluted 2,040,791 2,030,327 2,039,266 2,035,450 5

6 December AJS Bancorp, Inc. Selected Financial Data and Ratios (Unaudited) (Dollars in thousands, except share data) September 30, D 31, September 30, Book value per share Common shares outstanding Stockholders equity to total assets $ ,149, % $ ,149, % $ ,149, % C Regulatory Capital Ratios (Bank only): Total risk-based capital to risk-weighted assets Tier 1 (core) capital to risk-weighted assets Common equity Tier 1 capital to risk-weighted assets Tier 1 (core) capital to adjusted total assets 36.74% % % Asset Quality Data and Ratios: Non-performing loans Other real estate owned Non-performing assets $1, ,453 $1, ,604 $1, ,907 Non-performing loans as a percent of total loans 1.16% 1.32% 1.67% Non-performing assets as a percent of total assets Allowance for loan losses as a percent of total loans Allowance for loan losses as a percent of non-performing loans Three Months Ended September 30, Nine Months Ended September 30, Performance Ratios (annualized): Return on average assets 0.22% 0.22% 0.19% 0.28% Return on average equity Average yield on interest-earning assets Average cost of interest-bearing-liabilities Interest rate spread Net interest margin Average interest-earning assets to average interest-bearing liabilities Efficiency ratio (1) (1) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income