FS Bancorp, Inc. Reports Second Quarter Net Income of $7.7 Million or $0.99 Per Diluted Share and Declares 50th Consecutive Quarterly Cash Dividend in Addition to a Special Dividend
MOUNTLAKE TERRACE, Wash., July 22, 2025 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ:FSBW) (the "Company"), the holding company for 1st Security Bank of Washington (the "Bank") today reported 2025 second quarter net income of $7.7 million, or $0.99 per diluted share, compared to $9.0 million, or $1.13 per diluted share, for the comparable quarter one year ago. For the six months ended June 30, 2025, net income was $15.7 million, or $1.99 per diluted share, compared to net income of $17.4 million, or $2.20 per diluted share, for the comparable six-month period in 2024.
"We are proud of the balance sheet growth this quarter driven by solid loan demand. Additionally, our share repurchase activity reflects our continued confidence and commitment to delivering long-term value to our shareholders," stated Phillip Whittington, CFO.
"We are pleased to announce that our Board of Directors has approved our 50th consecutive quarterly cash dividend of $0.28 per common share, demonstrating our continued commitment to delivering value to our shareholders. In recognition of this milestone, the Board also approved a special dividend of $0.22 per common share. Both dividends will be paid on August 21, 2025, to shareholders of record as of August 7, 2025," noted Matthew Mullet, President.
2025 Second Quarter Highlights
Net income was $7.7 million for the second quarter of 2025, compared to $8.0 million for the previous quarter, and $9.0 million for the comparable quarter one year ago;
Total deposits decreased $61.8 million, or 2.4%, to $2.55 billion at June 30, 2025, primarily due to a decrease of $59.1 million in brokered deposits, compared to $2.62 billion at March 31, 2025, and increased $170.6 million, or 7.2%, from $2.38 billion at June 30, 2024. Noninterest-bearing deposits were $654.1 million at June 30, 2025, $676.7 million at March 31, 2025, and $623.3 million at June 30, 2024;
Borrowings increased $165.5 million, or 240.5% to $234.3 million at June 30, 2025, compared to $68.8 million at March 31, 2025, and increased $52.4 million, or 28.8%, from $181.9 million at June 30, 2024;
Loans receivable, net increased $81.2 million, or 3.2%, to $2.58 billion at June 30, 2025, compared to $2.50 billion at March 31, 2025, and increased $125.1 million, or 5.1%, from $2.46 billion at June 30, 2024;
Consumer loans were $606.3 million at June 30, 2025, a decrease of $2.6 million, or 0.4%, from $608.9 million in the previous quarter, and a decrease of $35.4 million, or 5.5%, from $641.7 million in the comparable quarter one year ago. During the three months ended June 30, 2025, consumer loan originations included 82.5% of home improvement loans originated with a Fair Isaac Corporation ("FICO") score above 720;
Repurchased 132,282 shares of the Company's common stock in the second quarter of 2025 at an average price of $38.92 per share with $725,000 remaining for future purchases under the existing share repurchase plan at June 30, 2025. In addition, as previously announced on July 9, 2025, the Board approved a new share repurchase plan authorizing the repurchase of up to $5.0 million in shares of the Company's outstanding common stock;
Book value per share increased $0.43 to $39.55 at June 30, 2025, compared to $39.12 at March 31, 2025, and increased $2.40 from $37.15 at June 30, 2024. Tangible book value per share (non-GAAP financial measure) increased $0.50 to $37.46 at June 30, 2025, compared to $36.96 at March 31, 2025, and increased $2.80 from $34.66 at June 30, 2024. See, "Non-GAAP Financial Measures;"
Segment reporting in the second quarter of 2025 reflected net income of $7.4 million for the Commercial and Consumer Banking segment and $351,000 for the Home Lending segment, compared to net income of $7.8 million and $242,000 in the prior quarter, and net income of $8.0 million and $1.0 million in the second quarter of 2024, respectively; and
Regulatory capital ratios at the Bank were 14.1% for total risk-based capital and 11.2% for Tier 1 leverage capital at June 30, 2025, compared to 14.4% for total risk-based capital and 11.3% for Tier 1 leverage capital at March 31, 2025.
Segment Reporting
The Company operates through two reportable segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment also manages the Bank's investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.
The tables below provide a summary of segment reporting at or for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):
At or For the Three Months Ended June 30, 2025
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income(1)
$
29,179
$
2,933
$
32,112
Provision for credit losses
(1,849
)
(172
)
(2,021
)
Noninterest income(2)
2,297
2,873
5,170
Noninterest expense(3)
(20,313
)
(5,189
)
(25,502
)
Income before provision for income taxes
9,314
445
9,759
Provision for income taxes
(1,937
)
(94
)
(2,031
)
Net income
$
7,377
$
351
$
7,728
Total average assets for period ended
$
2,466,917
$
649,443
$
3,116,360
Full-time employees ("FTEs")
452
115
567
At or Three Months Ended June 30, 2024
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income(1)
$
28,051
$
2,350
$
30,401
(Provision) recovery for credit losses
(1,214
)
137
(1,077
)
Noninterest income(2)
2,269
3,599
5,868
Noninterest expense(3)
(19,043
)
(4,814
)
(23,857
)
Income before provision for income taxes
10,063
1,272
11,335
Provision for income taxes
(2,113
)
(263
)
(2,376
)
Net income
$
7,950
$
1,009
$
8,959
Total average assets for period ended
$
2,359,741
$
588,090
$
2,947,831
FTEs
450
121
571
At or For the Six Months Ended June 30, 2025
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income(1)
$
57,586
$
5,507
$
63,093
Provision for credit losses
(3,170
)
(443
)
(3,613
)
Noninterest income(2)
4,542
5,754
10,296
Noninterest expense(3)
(40,489
)
(10,067
)
(50,556
)
Income before provision for income taxes
18,469
751
19,220
Provision for income taxes
(3,314
)
(157
)
(3,471
)
Net income
$
15,155
$
594
$
15,749
Total average assets for period ended
$
2,440,654
$
634,013
$
3,074,667
FTEs
452
115
567
At or For the Six Months Ended June 30, 2024
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income(1)
$
56,137
$
4,610
$
60,747
Provision for credit losses
(2,465
)
(11
)
(2,476
)
Noninterest income(2)
4,662
6,317
10,979
Noninterest expense(3)
(38,051
)
(9,335
)
(47,386
)
Income before provision for income taxes
20,283
1,581
21,864
Provision for income taxes
(4,182
)
(326
)
(4,508
)
Net income
$
16,101
$
1,255
$
17,356
Total average assets for period ended
$
2,380,803
$
572,386
$
2,953,189
FTEs
450
121
571
__________________________
(1)
Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.
(2)
Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2025, the Company recorded a net increase in fair value of $3,000 and $266,000, respectively, compared to a net increase in fair value of $184,000 and $186,000, respectively for the three and six months ended June 30, 2024. As of June 30, 2025 and 2024, there were $13.2 million and $13.9 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.
(3)
Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.8 million and $3.7 million, compared to $1.5 million and $3.0 million, respectively.
Asset Summary
The following table presents the components and changes in total assets as of the dates indicated.
ASSETS
Linked Quarter
Prior Year
(Dollars in thousands)
June 30,
March 31,
June 30,
Change
Quarter Change
2025
2025
2024
$
%
$
%
Cash and due from banks
$
15,168
$
18,657
$
20,005
$
(3,489
)
(19
)%
$
(4,837
)
(24
)%
Interest-bearing deposits at other financial institutions
18,027
44,084
13,006
(26,057
)
(59
)
5,021
39
Total cash and cash equivalents
33,195
62,741
33,011
(29,546
)
(47
)
184
1
Certificates of deposit at other financial institutions
248
1,234
12,707
(986
)
(80
)
(12,459
)
(98
)
Securities available-for-sale, at fair value
302,692
291,133
221,182
11,559
4
81,510
37
Securities held-to-maturity, net
31,562
10,434
8,455
21,128
202
23,107
273
Loans held for sale, at fair value
53,630
31,038
53,811
22,592
73
(181
)
—
Loans receivable, net
2,582,272
2,501,117
2,457,184
81,155
3
125,088
5
Accrued interest receivable
14,270
14,406
13,792
(136
)
(1
)
478
3
Premises and equipment, net
30,098
29,451
29,999
647
2
99
—
Operating lease right-of-use
7,969
4,979
5,784
2,990
60
2,185
38
Federal Home Loan Bank stock, at cost
11,579
5,256
10,322
6,323
120
1,257
12
Deferred tax asset, net
7,782
7,009
4,590
773
11
3,192
70
Bank owned life insurance ("BOLI"), net
38,262
38,778
38,201
(516
)
(1
)
61
—
MSRs, held at the lower of cost or fair value
8,652
8,926
9,352
(274
)
(3
)
(700
)
(7
)
Goodwill
3,592
3,592
3,592
—
—
—
—
Core deposit intangible, net
12,071
12,879
15,483
(808
)
(6
)
(3,412
)
(22
)
Other assets
38,139
43,105
23,912
(4,966
)
(12
)
14,227
59
TOTAL ASSETS
$
3,176,013
$
3,066,078
$
2,941,377
$
109,935
4
%
$
234,636
8
%
The increase in total assets reflects the Company's continued focus on balance sheet growth through loan origination and selective investment activity, funded by a combination of on-balance sheet liquidity and borrowings.
Prior
LOAN PORTFOLIO
Linked
Year
(Dollars in thousands)
Quarter
Quarter
COMMERCIAL REAL ESTATE
June 30, 2025
March 31, 2025
June 30, 2024
$
$
("CRE") LOANS
Amount
Percent
Amount
Percent
Amount
Percent
Change
Change
CRE owner occupied
$
180,250
6.8
%
$
164,911
6.5
%
$
177,723
7.1
%
$
15,339
$
2,527
CRE non-owner occupied
171,979
6.6
174,188
6.9
181,681
7.3
(2,209
)
(9,702
)
Commercial and speculative construction and development
300,723
11.5
288,978
11.4
220,793
8.9
11,745
79,930
Multi-family
263,185
10.1
244,940
9.7
239,675
9.6
18,245
23,510
Total CRE loans
916,137
35.0
873,017
34.5
819,872
32.9
43,120
96,265
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)
639,881
24.4
637,299
25.2
588,966
23.7
2,582
50,915
Home equity
85,613
3.3
73,846
2.9
73,749
3.0
11,767
11,864
Residential custom construction
54,024
2.1
48,810
1.9
53,416
2.1
5,214
608
Total residential real estate loans
779,518
29.8
759,955
30.0
716,131
28.8
19,563
63,387
CONSUMER LOANS
Indirect home improvement
530,375
20.3
532,038
21.0
563,621
22.6
(1,663
)
(33,246
)
Marine
72,765
2.8
73,737
2.9
74,627
3.0
(972
)
(1,862
)
Other consumer
3,151
0.1
3,118
0.1
3,440
0.1
33
(289
)
Total consumer loans
606,291
23.2
608,893
24.0
641,688
25.7
(2,602
)
(35,397
)
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")
294,563
11.3
274,956
10.9
285,183
11.6
19,607
9,380
Warehouse lending
17,952
0.7
15,949
0.6
25,548
1.0
2,003
(7,596
)
Total commercial business loans
312,515
12.0
290,905
11.5
310,731
12.6
21,610
1,784
Total loans receivable, gross
2,614,461
100.0
%
2,532,770
100.0
%
2,488,422
100.0
%
81,691
126,039
Allowance for credit losses on loans
(32,189
)
(31,653
)
(31,238
)
(536
)
(951
)
Total loans receivable, net
$
2,582,272
$
2,501,117
$
2,457,184
$
81,155
$
125,088
The composition of CRE loans at the dates indicated were as follows:
(Dollars in thousands)
June 30, 2025
March 31, 2025
June 30, 2024
CRE by Type:
Amount
Amount
Amount
CRE non-owner occupied:
Office
$
39,141
$
39,406
$
41,380
Retail
38,652
35,520
37,507
Hospitality/restaurant
26,489
27,377
28,314
Self-storage
19,075
19,092
19,141
Mixed use
18,387
18,868
18,062
Industrial
14,444
15,033
17,163
Senior housing/assisted living
7,448
7,506
7,675
Other
3,670
6,579
6,847
Land
2,206
2,314
3,021
Education/worship
2,467
2,493
2,571
Total CRE non-owner occupied
171,979
174,188
181,681
CRE owner occupied:
Industrial
77,419
66,618
63,970
Office
40,156
40,447
41,978
Retail
19,470
20,535
20,885
Other
9,483
8,529
8,354
Hospitality/restaurant
7,230
7,306
10,800
Automobile related
7,215
7,266
8,200
Mixed use
5,548
5,579
5,680
Agriculture
4,652
3,990
3,639
Education/worship
4,630
4,641
4,610
Car wash
4,447
—
9,607
Total CRE owner occupied
180,250
164,911
177,723
Total
$
352,229
$
339,099
$
359,404
The following table includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:
Current
(Dollars in
Weighted
thousands)
For the Quarter Ended
Average
CRE by type:
Sep 30, 2025
Dec 31, 2025
Mar 31, 2026
Jun 30, 2026
Sep 30, 2026
Dec 31, 2026
Mar 31, 2027
Jun 30, 2027
Total
Rate
Agriculture
$
716
$
314
$
178
$
265
$
287
$
—
$
—
$
—
$
1,760
6.28
%
Apartment
—
13,679
1,128
13,788
9,747
7,062
4,117
—
49,521
4.96
%
Hotel / hospitality
2,393
—
113
1,243
—
—
103
—
3,852
5.26
%
Industrial
—
10,002
976
586
1,578
—
13,412
263
26,817
5.12
%
Mixed use
241
—
7,101
—
—
379
—
—
7,721
8.14
%
Office
15,015
6,055
515
1,629
554
7,695
2,857
1,213
35,533
5.50
%
