FS Bancorp, Inc. Reports $8.4 Million of Net Income or $1.10 Per Diluted Share for the Fourth Quarter of 2025 and 3.6% Increase in Its Quarterly Dividend
MOUNTLAKE TERRACE, Wash., Jan. 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ:FSBW) (the "Company"), the holding company for 1st Security Bank of Washington (the "Bank"), today reported net income of $8.4 million, or $1.10 per diluted share for the quarter ended December 31, 2025, compared to $7.4 million, or $0.92 per diluted share, for the comparable quarter one year ago. Net income for 2025 was $33.3 million, or $4.29 per diluted share, compared to $35.0 million, or $4.36 per diluted share, for 2024.
"The Company remains focused on growing both book value and tangible book value, which increased 8.6% and 10.1%, respectively, during 2025. Tangible book value per share (non-GAAP) was $39.65 at December 31, 2025, compared to $36.02 at December 31, 2024," stated Matthew Mullet, CEO and President of 1st Security Bank.
"Our consistent operating performance and strong capital position continue to support meaningful returns to our shareholders," stated Joe Adams, CEO of FS Bancorp, Inc. "We are also thankful to our Board of Directors for increasing our fifty-second consecutive quarterly cash dividend by $0.01 to $0.29 per common share. The quarterly dividend will be paid on February 19, 2026, to shareholders of record as of February 6, 2026," concluded Adams.
2025 Fourth Quarter and Year End Highlights
Net income was $8.4 million for the fourth quarter of 2025, compared to $9.2 million in the previous quarter, and increased from $7.4 million for the comparable quarter one year ago;
Net interest margin ("NIM") was 4.35% for the fourth quarter of 2025, compared to 4.37% in the previous quarter, and 4.31% for the comparable quarter one year ago;
Total deposits were $2.67 billion at December 31, 2025, compared to $2.69 billion at September 30, 2025, and increased by $334.2 million, or 14.3%, from $2.34 billion at December 31, 2024. Noninterest-bearing deposits totaled $658.1 million at December 31, 2025, compared to $665.9 million at September 30, 2025, and $638.2 million at December 31, 2024;
Loans receivable, net increased $23.6 million, or 0.9%, to $2.62 billion at December 31, 2025, compared to $2.60 billion at September 30, 2025, and increased $121.2 million, or 4.8%, from $2.50 billion at December 31, 2024;
Consumer loans, of which 88.1% are home improvement loans, decreased $3.8 million, or 0.6%, to $597.0 million at December 31, 2025, compared to $600.8 million in the previous quarter and decreased $23.2 million, or 3.7% from $620.2 million in the comparable quarter one year ago. During the three months ended December 31, 2025, 84.3% of consumer portfolio originations for home improvement loans had a Fair Isaac Corporation ("FICO") score above 720;
Purchased a 122,000-square-foot building for $16.1 million and intends to sell the Bank's current administrative office as part of a broader effort to centralize headquarters by year-end 2026. Prior to the purchase, the Bank leased 22,000 square feet of the building;
Repurchased 46,947 shares of the Company's common stock in the fourth quarter of 2025 at an average price of $40.01 per share with $4.3 million remaining for future purchases under the existing share repurchase plan;
Book value per share increased $1.12 to $41.55 at December 31, 2025, compared to $40.43 at September 30, 2025, and increased $3.29 from $38.26 December 31, 2024. Tangible book value per share (non-GAAP financial measure) increased $1.22 to $39.65 at December 31, 2025, compared to $38.43 at September 30, 2025, and increased $3.63 from $36.02 at December 31, 2024. See, "Non-GAAP Financial Measures;"
Segment reporting in the fourth quarter of 2025, reflected net income of $7.8 million for the Commercial and Consumer Banking segment and $643,000 for the Home Lending segment, compared to $8.4 million and $775,000 in the prior quarter, and $7.4 million and net loss of $39,000 in the fourth quarter of 2024, respectively;
Regulatory capital ratios at the Bank were 14.0% for total risk-based capital and 11.0% for Tier 1 leverage capital at December 31, 2025, compared to 14.2% for total risk-based capital and 11.2% for Tier 1 leverage capital at December 31, 2024.
Recorded an additional $1.0 million in noninterest income related to death benefits received on bank owned life insurance policies for the fourth quarter of 2025; and
Recognized an additional $1.0 million in credit provision related to a single commercial construction relationship during the fourth quarter of 2025.
Segment Reporting
The Company reports two 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 portfolios and cash management services. This segment is also responsible for the management of the investment portfolio and other assets of the Bank. 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 months and years ended December 31, 2025 and 2024 (dollars in thousands):
At or For the Three Months Ended December 31, 2025
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income (1)
$
30,737
$
2,885
$
33,622
(Provision for) recovery of credit losses
(3,681
)
57
(3,624
)
Noninterest income (2)
3,386
3,001
6,387
Noninterest expense (3)
(20,878
)
(5,195
)
(26,073
)
Income before provision for income taxes
9,564
748
10,312
Provision for income taxes
(1,787
)
(105
)
(1,892
)
Net income
$
7,777
$
643
$
8,420
Total average assets for period ended
$
2,552,509
$
649,443
$
3,201,952
Full-time employees ("FTEs")
462
118
580
At or For the Three Months Ended December 31, 2024
Condensed income statement:
Commercial andConsumer Banking
Home Lending
Total
Net interest income (1)
$
28,555
$
2,559
$
31,114
(Provision for) recovery of credit losses
(1,597
)
75
(1,522
)
Noninterest income (2)
2,308
2,302
4,610
Noninterest expense (3)
(19,365
)
(4,986
)
(24,351
)
Income (loss) before provision for income taxes
9,901
(50
)
9,851
(Provision) benefit for income taxes
(2,480
)
11
(2,469
)
Net income (loss)
$
7,421
$
(39
)
$
7,382
Total average assets for period ended
$
2,383,885
$
606,826
$
2,990,711
FTEs
447
115
562
At or For the Year Ended December 31, 2025
Condensed income statement:
Commercial andConsumerBanking
Home Lending
Total
Net interest income (1)
$
119,134
$
11,272
$
130,406
Provision for credit losses
(9,001
)
(545
)
(9,546
)
Noninterest income (2)
10,007
12,270
22,277
Noninterest expense (3)
(81,501
)
(20,516
)
(102,017
)
Income before provision for income taxes
38,639
2,481
41,120
Provision for income taxes
(7,305
)
(469
)
(7,774
)
Net income
$
31,334
$
2,012
$
33,346
Total average assets for period ended
$
2,487,033
$
647,642
$
3,134,675
FTEs
462
118
580
At or For the Year Ended December 31, 2024
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income (1)
$
113,304
$
9,801
$
123,105
Provision for credit losses
(5,393
)
(118
)
(5,511
)
Noninterest income (2)
9,227
12,329
21,556
Noninterest expense (3)
(77,615
)
(19,954
)
(97,569
)
Income before provision for income taxes
39,523
2,058
41,581
(Provision) benefit for income taxes
(6,733
)
176
(6,557
)
Net income
$
32,790
$
2,234
$
35,024
Total average assets for period ended
$
2,373,295
$
591,236
$
2,964,531
FTEs
447
115
562
________________________
(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 months and year ended December 31, 2025, the Company recorded a net increase in fair value of $65,000 and $534,000, respectively, as compared to a net decrease in fair value of $396,000 and a net increase in fair value of $52,000 for the three months and year ended December 31, 2024, respectively. As of December 31, 2025 and 2024, there were $13.2 million and $12.7 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 months and years ended December 31, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.9 million and $7.4 million, compared to $1.8 million and $6.6 million for the same periods in 2024, 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)
Dec 31,
Sep 30,
Dec 31,
Change
Quarter Change
2025
2025
2024
$
%
$
%
Cash and due from banks
$
13,504
$
12,391
$
19,280
$
1,113
9
%
$
(5,776
)
(30
)%
Interest-bearing deposits at other financial institutions
14,715
48,889
12,355
(34,174
)
(70
)
2,360
19
Total cash and cash equivalents
28,219
61,280
31,635
(33,061
)
(54
)
(3,416
)
(11
)
Certificates of deposit at other financial institutions
—
—
1,727
—
—
(1,727
)
NM
Securities available-for-sale, at fair value
288,667
311,695
281,175
(23,028
)
(7
)
7,492
3
Securities held-to-maturity, net
33,224
31,386
8,455
1,838
6
24,769
293
Loans held for sale, at fair value
43,705
38,579
27,835
5,126
13
15,870
57
Loans receivable, net
2,623,172
2,599,601
2,501,951
23,571
1
121,221
5
Accrued interest receivable
14,614
15,122
13,881
(508
)
(3
)
733
5
Premises and equipment, net
44,065
32,444
29,756
11,621
36
14,309
48
Long-lived assets held for sale
3,258
—
—
3,258
—
3,258
—
Operating lease right-of-use
5,789
6,832
5,378
(1,043
)
(15
)
411
8
Federal Home Loan Bank stock, at cost
7,971
7,975
15,621
(4
)
—
(7,650
)
(49
)
Deferred tax asset, net
6,993
6,767
7,059
226
3
(66
)
(1
)
Bank owned life insurance ("BOLI"), net
36,249
38,531
38,528
(2,282
)
(6
)
(2,279
)
(6
)
MSRs, held at the lower of cost or fair value
8,608
8,506
9,204
102
1
(596
)
(6
)
Goodwill
3,592
3,592
3,592
—
—
—
—
Core deposit intangible, net
10,518
11,284
13,710
(766
)
(7
)
(3,192
)
(23
)
Other assets
38,203
35,231
39,670
2,972
8
(1,467
)
(4
)
TOTAL ASSETS
$
3,196,847
$
3,208,825
$
3,029,177
$
(11,978
)
—
%
$
167,670
6
%
During the three months ended December 31, 2025, the Company purchased an office building for $16.1 million. The Company's existing headquarters building was reclassified from premises and equipment, net, to long-lived assets held for sale, at $3.3 million, representing the lower of its carrying value or fair value. No impairment was recorded upon transfer to the held for sale classification. The Company plans to centralize all corporate departments into the new office building by the end of 2026. The costs of the centralization, including potential renovations, furniture, and IT infrastructure, are expected to be funded from cash on hand, and are not anticipated to materially impact the Company's capital position.
LOAN PORTFOLIO
Prior
(Dollars in thousands)
Linked
Year
COMMERCIAL
Quarter
Quarter
REAL ESTATE
December 31, 2025
September 30, 2025
December 31, 2024
$
$
("CRE") LOANS
Amount
Percent
Amount
Percent
Amount
Percent
Change
Change
CRE owner occupied
$
176,078
6.6
%
$
170,714
6.5
%
$
170,396
6.7
%
$
5,364
$
5,682
CRE non-owner occupied
177,113
6.7
172,713
6.6
174,921
6.9
4,400
2,192
Commercial and speculative construction and development
354,130
13.3
326,684
12.4
280,798
11.1
27,446
73,332
Multi-family
262,150
9.9
262,578
10.0
245,222
9.7
(428
)
16,928
Total CRE loans
969,471
36.5
932,689
35.5
871,337
34.4
36,782
98,134
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)
628,761
23.7
629,712
23.9
617,322
24.4
(951
)
11,439
Home equity
88,271
3.3
86,895
3.3
75,147
3.0
1,376
13,124
Residential custom construction
42,329
1.6
53,296
2.0
49,902
2.0
(10,967
)
(7,573
)
Total residential real estate loans
759,361
28.6
769,903
29.2
742,371
29.4
(10,542
)
16,990
CONSUMER LOANS
Indirect home improvement
525,842
19.8
527,597
20.1
541,946
21.4
(1,755
)
(16,104
)
Marine
68,115
2.6
70,220
2.7
74,931
2.9
(2,105
)
(6,816
)
Other consumer
3,029
0.1
2,962
0.1
3,304
0.1
67
(275
)
Total consumer loans
596,986
22.5
600,779
22.9
620,181
24.4
(3,793
)
(23,195
)
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")
301,111
11.3
311,173
11.8
287,014
11.3
(10,062
)
14,097
Warehouse lending
28,180
1.1
15,113
0.6
12,918
0.5
13,067
15,262
Total commercial business loans
329,291
12.4
326,286
12.4
299,932
11.8
3,005
29,359
Total loans receivable, gross
2,655,109
100.0
%
2,629,657
100.0
%
2,533,821
100.0
%
25,452
121,288
Allowance for credit losses ("ACL") on loans
(31,937
)
(30,056
)
(31,870
)
(1,881
)
(67
)
Total loans receivable, net
$
2,623,172
$
2,599,601
$
2,501,951
$
23,571
$
121,221
Total loans receivable, gross increased $25.5 million to $2.66 billion during the fourth quarter of 2025, primarily as a result of a $27.4 million increase in commercial and speculative construction and development loans, led by speculative residential projects.
A breakdown of CRE loans, excluding multi-family and construction and development loans, at the dates indicated were as follows:
(Dollars in thousands)
CRE by Type:
December 31, 2025
September 30, 2025
December 31, 2024
CRE non-owner occupied:
Office
$
44,429
$
42,537
$
39,697
Retail
36,387
36,827
36,568
Hospitality/restaurant
24,848
25,798
27,562
Self-storage
18,924
19,001
19,111
Mixed use
18,903
18,663
17,721
Industrial
14,263
14,352
15,125
Senior housing/assisted living
7,329
7,390
7,565
Other
7,729
3,632
6,631
Land
1,887
2,072
2,421
Education/worship
2,414
2,441
2,520
Total CRE non-owner occupied
177,113
172,713
174,921
CRE owner occupied:
Industrial
75,347
77,059
67,064
Office
30,311
31,981
42,223
Retail
24,248
17,399
20,718
Hospitality/restaurant
7,583
7,675
10,396
Other
10,492
10,521
8,612
Car wash
4,412
4,430
—
Automobile related
7,111
7,164
7,325
Mixed use
7,831
4,622
5,616
Agriculture
4,136
4,347
3,834
Education/worship
4,607
5,516
4,608
Total CRE owner occupied
176,078
170,714
170,396
Total
$
353,191
$
343,427
$
345,317
The following table includes CRE loans, presented in the table above, repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:
(Dollars in
Current
thousands)
For the Quarter Ended
Weighted
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Average
CRE by type:
2026
2026
2026
2026
2027
2027
2027
2027
Total
Rate
Agriculture
$
805
$
—
$
266
$
—
$
—
$
—
$
—
$
—
$
1,071
6.20
%
Apartment
959
14,534
7,988
16,133
27,768
18,056
4,136
12,405
101,979
5.91
Auto–related
202
—
—
—
—
—
—
—
202
5.75
Hotel / hospitality
—
415
110
—
102
—
—
—
627
4.88
Industrial
394
577
1,532
—
13,266
3,312
5,717
5,261
30,059
5.72
Mixed use
2,107
—
—
374
—
