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FS Bancorp, Inc. Reports Third Quarter Net Income of $10.3 Million or $1.29 Per Diluted Share and the Forty-Seventh Consecutive Quarterly Cash Dividend

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FS Bancorp, holding company for 1st Security Bank of Washington, reported Q3 2024 net income of $10.3 million or $1.29 per diluted share, up from $9.0 million or $1.13 per diluted share in Q3 2023. For the nine months ending September 30, 2024, net income was $27.6 million or $3.45 per diluted share, compared to $26.3 million or $3.33 per diluted share for the same period in 2023.

Total deposits rose by $44.5 million to $2.43 billion, while borrowings decreased by $18.1 million to $163.8 million. The company's net interest margin increased to 4.35%. The Board approved a $0.27 per share cash dividend, payable on November 21, 2024, to shareholders of record as of November 7, 2024.

FS Bancorp repurchased 97,000 shares at an average price of $43.58 per share. The book value per share increased to $37.45, and the tangible book value per share rose to $35.10. The company reported a tax benefit of $420,000 due to energy tax credits.

FS Bancorp, la società di holding per 1st Security Bank of Washington, ha riportato un utile netto per il terzo trimestre 2024 di 10,3 milioni di dollari o 1,29 dollari per azione diluita, in aumento rispetto ai 9,0 milioni di dollari o 1,13 dollari per azione diluita nel terzo trimestre 2023. Nei nove mesi terminanti il 30 settembre 2024, l'utile netto è stato di 27,6 milioni di dollari o 3,45 dollari per azione diluita, rispetto ai 26,3 milioni di dollari o 3,33 dollari per azione diluita nello stesso periodo del 2023.

I depositi totali sono aumentati di 44,5 milioni di dollari, raggiungendo i 2,43 miliardi di dollari, mentre i prestiti sono diminuiti di 18,1 milioni di dollari, arrivando a 163,8 milioni di dollari. Il margine d'interesse netto della società è aumentato al 4,35%. Il Consiglio ha approvato un dividendo in contante di 0,27 dollari per azione, che sarà pagato il 21 novembre 2024 agli azionisti registrati al 7 novembre 2024.

FS Bancorp ha riacquistato 97.000 azioni a un prezzo medio di 43,58 dollari per azione. Il valore contabile per azione è aumentato a 37,45 dollari e il valore contabile tangibile per azione è salito a 35,10 dollari. La società ha riportato un beneficio fiscale di 420.000 dollari a causa dei crediti d'imposta energetici.

FS Bancorp, empresa matriz de 1st Security Bank of Washington, reportó un ingreso neto del tercer trimestre de 2024 de 10,3 millones de dólares o 1,29 dólares por acción diluida, un aumento con respecto a los 9,0 millones de dólares o 1,13 dólares por acción diluida en el tercer trimestre de 2023. Durante los nueve meses que terminaron el 30 de septiembre de 2024, los ingresos netos fueron de 27,6 millones de dólares o 3,45 dólares por acción diluida, en comparación con 26,3 millones de dólares o 3,33 dólares por acción diluida en el mismo período de 2023.

Los depósitos totales aumentaron en 44,5 millones de dólares, alcanzando los 2,43 mil millones de dólares, mientras que los préstamos disminuyeron en 18,1 millones de dólares hasta 163,8 millones de dólares. El margen de interés neto de la empresa aumentó al 4,35%. La Junta aprobó un dividendo en efectivo de 0,27 dólares por acción, pagadero el 21 de noviembre de 2024, a los accionistas registrados al 7 de noviembre de 2024.

FS Bancorp recompró 97,000 acciones a un precio promedio de 43,58 dólares por acción. El valor contable por acción aumentó a 37,45 dólares y el valor contable tangible por acción subió a 35,10 dólares. La empresa reportó un beneficio fiscal de 420,000 dólares debido a créditos fiscales por energía.

FS Bancorp, 1st Security Bank of Washington의 모회사, 2024년 3분기 순이익이 1,030만 달러 또는 희석 주당 1.29달러로 보고되었으며, 이는 2023년 3분기의 900만 달러 또는 희석 주당 1.13달러에서 증가한 수치입니다. 2024년 9월 30일로 종료된 9개월 동안 순이익은 2,760만 달러 또는 희석 주당 3.45달러로, 2023년 같은 기간의 2,630만 달러 또는 3.33달러와 비교됩니다.

총 예금은 4,450만 달러 증가하여 24억 3천만 달러에 이르렀고, 차입금은 1,810만 달러 감소하여 1억 6,380만 달러가 되었습니다. 회사의 순이자 마진은 4.35%로 증가했습니다. 이사회는 주당 0.27달러 현금 배당금을 승인하였으며, 2024년 11월 21일에 2024년 11월 7일 기준 주주에게 지급될 예정입니다.

FS Bancorp는 주당 평균 43.58달러에 97,000주를 재매입했습니다. 주당 장부 가치는 37.45달러로 증가하였고, 주당 유 Tangible 장부 가치는 35.10달러로 상승했습니다. 회사는 에너지 세금 크레딧으로 인해 420,000달러의 세금 혜택을 보고했습니다.

FS Bancorp, la société de portefeuille de 1st Security Bank of Washington, a rapporté un bénéfice net de 3ème trimestre 2024 de 10,3 millions de dollars ou 1,29 dollar par action diluée, en hausse par rapport à 9,0 millions de dollars ou 1,13 dollar par action diluée au 3ème trimestre 2023. Pour les neuf mois se terminant le 30 septembre 2024, le bénéfice net s'élevait à 27,6 millions de dollars ou 3,45 dollars par action diluée, comparé à 26,3 millions de dollars ou 3,33 dollars par action diluée pour la même période en 2023.

Les dépôts totaux ont augmenté de 44,5 millions de dollars pour atteindre 2,43 milliards de dollars, tandis que les emprunts ont diminué de 18,1 millions de dollars pour s'établir à 163,8 millions de dollars. La marge d'intérêt nette de l'entreprise a augmenté pour atteindre 4,35 %. Le Conseil a approuvé un dividende en espèces de 0,27 dollar par action, payable le 21 novembre 2024, aux actionnaires inscrits au 7 novembre 2024.

FS Bancorp a racheté 97 000 actions à un prix moyen de 43,58 dollars par action. La valeur comptable par action a augmenté à 37,45 dollars et la valeur comptable tangible par action a atteint 35,10 dollars. L'entreprise a signalé un avantage fiscal de 420 000 dollars en raison des crédits d'impôt sur l'énergie.

FS Bancorp, die Muttergesellschaft der 1st Security Bank of Washington, berichtete für das 3. Quartal 2024 einen Nettogewinn von 10,3 Millionen Dollar oder 1,29 Dollar pro verwässerter Aktie, ein Anstieg von 9,0 Millionen Dollar oder 1,13 Dollar pro verwässerter Aktie im 3. Quartal 2023. Für die neun Monate bis zum 30. September 2024 betrug der Nettogewinn 27,6 Millionen Dollar oder 3,45 Dollar pro verwässerter Aktie, im Vergleich zu 26,3 Millionen Dollar oder 3,33 Dollar pro verwässerter Aktie im gleichen Zeitraum 2023.

Die Gesamteinlagen stiegen um 44,5 Millionen Dollar auf 2,43 Milliarden Dollar, während die Kredite um 18,1 Millionen Dollar auf 163,8 Millionen Dollar sanken. Die Nettomarge der Zinsen des Unternehmens stieg auf 4,35%. Der Vorstand genehmigte eine Bar-Dividende von 0,27 Dollar pro Aktie, die am 21. November 2024 an die zum 7. November 2024 registrierten Aktionäre gezahlt wird.

FS Bancorp kaufte 97.000 Aktien zu einem durchschnittlichen Preis von 43,58 Dollar pro Aktie zurück. Der Buchwert pro Aktie stieg auf 37,45 Dollar, und der materielle Buchwert pro Aktie erhöhte sich auf 35,10 Dollar. Das Unternehmen berichtete über einen Steuervergünstigungsbetrag von 420.000 Dollar aufgrund von Steuerkrediten für Energie.

Positive
  • Q3 2024 net income increased to $10.3 million from $9.0 million YoY.
  • Net interest margin rose to 4.35%.
  • Total deposits increased by $44.5 million.
  • Board declared a $0.27 per share cash dividend.
  • Repurchased 97,000 shares at $43.58 per share.
  • Book value per share increased to $37.45.
Negative
  • Consumer loans decreased by $9.3 million.
  • Noninterest expense increased to $25.8 million from $23.6 million YoY.
  • Decrease in noninterest-bearing deposits from $670.2 million to $657.8 million YoY.

MOUNTLAKE TERRACE, Wash., Oct. 22, 2024 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2024 third quarter net income of $10.3 million, or $1.29 per diluted share, compared to $9.0 million, or $1.13 per diluted share, for the comparable quarter one year ago. For the nine months ended September 30, 2024, net income was $27.6 million, or $3.45 per diluted share, compared to net income of $26.3 million, or $3.33 per diluted share, for the comparable nine-month period in 2023.

“Deposit growth experienced in the third quarter of 2024 was a direct result of the Bank-wide focus and strategic planning objective to fund loan growth with core deposits,” stated Joe Adams, CEO. “We are also pleased that our Board of Directors approved our forty-seventh consecutive quarterly cash dividend of $0.27 per common share, demonstrating our continued commitment to returning value to shareholders.  The cash dividend will be paid on November 21, 2024, to shareholders of record as of November 7, 2024,” concluded Adams.

2024 Third Quarter Highlights

  • Net income was $10.3 million for the third quarter of 2024, compared to $9.0 million for both the previous quarter and the comparable quarter one year ago;

  • Net interest margin (“NIM”) increased to 4.35% for the third quarter of 2024, compared to 4.29% in the previous quarter, and 4.34% for the comparable quarter one year ago;

  • Total deposits increased $44.5 million, or 1.9%, to $2.43 billion at September 30, 2024, primarily due to an increase in noninterest-bearing checking of $34.4 million and certificates of deposit ("CDs") of $15.0 million, compared to $2.38 billion at June 30, 2024 and decreased $27.1 million, or 1.1%, from $2.45 billion at September 30, 2023.  Noninterest-bearing deposits were $657.8 million at September 30, 2024, $623.3 million at June 30, 2024, and $670.2 million at September 30, 2023; 

  • Borrowings decreased $18.1 million, or 9.9% to $163.8 million at September 30, 2024, compared to $181.9 million at June 30, 2024, as a result of the Company's strategic planning objective to fund loan growth with core deposits; 

  • Loans receivable, net was unchanged at $2.46 billion at September 30, 2024, and June 30, 2024, and increased $88.1 million, or 3.7%, from $2.38 billion at September 30, 2023;

  • Consumer loans, of which 87.3% are home improvement loans, decreased $9.3 million, or 1.4%, to $632.4 million at September 30, 2024, compared to $641.7 million in the previous quarter, and decreased $7.7 million, or 1.2%, from $640.1 million in the comparable quarter one year ago. Yields on consumer loans increased 18 basis points to 7.59% from 7.41% at the end of the second quarter 2024. During the three months ended September 30, 2024, consumer loan originations included 80.4% of home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720 and 83.9% of home improvement loans with a UCC-2 security filing;

  • For the third quarter of 2024, there was a tax benefit of $420,000, compared to tax provisions of $2.4 million in the prior quarter, and $2.5 million for the same quarter last year.  The tax benefit for the third quarter of 2024 was due to $28.4 million of energy tax credits purchased during the current quarter related to the Inflation Reduction Act of 2022;

  • Repurchased 97,000 shares of the Company's common stock in the third quarter of 2024 at an average price of $43.58 per share with $1.4 million remaining for future purchases under the share repurchase plan that was approved in July 2024;

  • Book value per share increased $0.30 to $37.45 at September 30, 2024, compared to $37.15 at June 30, 2024, and increased $4.87 from $32.58 at September 30, 2023.  Tangible book value per share (non-GAAP financial measure) increased $0.44 to $35.10 at September 30, 2024, compared to $34.66 at June 30, 2024, and increased $5.37 from $29.73 at September 30, 2023. See, “Non-GAAP Financial Measures.”

  • Segment reporting in the third quarter of 2024 reflected net income of $9.3 million for the Commercial and Consumer Banking segment and $1.0 million for the Home Lending segment, compared to net income of $8.0 million and $1.0 million in the prior quarter, and net income of $8.8 million and $166,000 in the third quarter of 2023, respectively;

  • The percentage of available unencumbered cash and secured borrowing capacity at the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank to uninsured deposits was 182% at September 30, 2024, compared to 191% in the prior quarter. The average deposit size per FDIC-insured account at the Bank was $33,000 and $32,000 for September 30, 2024 and June 30, 2024, respectively; and

  • Regulatory capital ratios at the Bank were 14.2% for total risk-based capital and 11.2% for Tier 1 leverage capital at September 30, 2024, compared to 13.9% for total risk-based capital and 10.9% for Tier 1 leverage capital at June 30, 2024.

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 Company reflected the sale of servicing rights in the first quarter of 2024 as a gain to the Commercial and Consumer Banking segment to offset the realized loss on sale of investment securities and will allocate the gain on a straight-line basis over four years as intercompany income from the Commercial and Consumer Banking segment to the Home Lending segment.

The tables below provide a summary of segment reporting at or for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

  At or For the Three Months Ended September 30, 2024 
Condensed income statement: Commercial and Consumer Banking  Home Lending  Total 
Net interest income (1) $28,612  $2,632  $31,244 
Provision for credit losses  (1,331)  (182)  (1,513)
Noninterest income (2)  2,257   3,710   5,967 
Noninterest expense (3)  (20,199)  (5,633)  (25,832)
Income before (provision) benefit for income taxes  9,339   527   9,866 
(Provision) benefit for income taxes  (71)  491   420 
Net income $9,268  $1,018  $10,286 
Total average assets for period ended $2,347,855  $612,935  $2,960,790 
Full-time employees ("FTEs")  442   117   559 


  At or For the Three Months Ended September 30, 2023 
Condensed income statement: Commercial and Consumer Banking  Home Lending  Total 
Net interest income (1) $27,563  $3,071  $30,634 
Provision for credit losses  (437)  (111)  (548)
Noninterest income (2)  2,680   2,302   4,982 
Noninterest expense (3)  (18,539)  (5,047)  (23,586)
Income before provision for income taxes  11,267   215   11,482 
Provision for income taxes  (2,480)  (49)  (2,529)
Net income $8,787  $166  $8,953 
Total average assets for period ended $2,361,014  $540,372  $2,901,386 
FTEs  434   128   562 


  At or For the Nine Months Ended September 30, 2024 
Condensed income statement: Commercial and Consumer Banking  Home Lending  Total 
Net interest income (1) $84,749  $7,242  $91,991 
Provision for credit losses  (3,796)  (193)  (3,989)
Noninterest income (2)  6,919   10,027   16,946 
Noninterest expense (3)  (58,250)  (14,968)  (73,218)
Income before (provision) benefit for income taxes  29,622   2,108   31,730 
(Provision) benefit for income taxes  (4,253)  165   (4,088)
Net income $25,369  $2,273  $27,642 
Total average assets for period ended $2,369,740  $586,001  $2,955,741 
FTEs  442   117   559 


  At or For the Nine Months Ended September 30, 2023 
Condensed income statement: Commercial and Consumer Banking  Home Lending  Total 
Net interest income (1) $83,332  $9,516  $92,848 
Provision for credit losses  (2,555)  (817)  (3,372)
Noninterest income (2)  7,766   7,268   15,034 
Noninterest expense (3)  (56,099)  (15,215)  (71,314)
Income before provision for income taxes  32,444   752   33,196 
Provision for income taxes  (6,758)  (157)  (6,915)
Net income $25,686  $595  $26,281 
Total average assets for period ended $2,288,996  $520,513  $2,809,509 
FTEs  434   128   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 and nine months ended September 30, 2024, the Company recorded net increases in fair value of $262,000 and $448,000, respectively, as compared to net decreases in fair value of $343,000 and $285,000 for the three and nine months ended September 30, 2023. As of September 30, 2024 and 2023, there were $13.9 million and $15.2 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 nine months ended September 30, 2024 and 2023, the Home Lending segment included allocated overhead expenses of $1.8 million and $4.8 million, compared to $1.5 million and $4.7 million, respectively.
   

Asset Summary

Total assets increased $28.8 million, or 1.0%, to $2.97 billion at September 30, 2024, compared to $2.94 billion at June 30, 2024, and increased $50.1 million, or 1.7%, from $2.92 billion at September 30, 2023.  The increase in total assets at September 30, 2024, compared to June 30, 2024, included increases of $15.7 million in other assets, consisting primarily of a federal income tax receivable of $25.7 million, $7.3 million in total cash and cash equivalents, $7.0 million in securities available-for-sale, and $6.5 million in loans receivable, net, partially offset by decreases in loans held for sale (“HFS”) of $4.4 million,  and core deposit intangible ("CDI"), net of $897,000. The increase compared to September 30, 2023, was primarily due to increases in loans receivable, net of $88.1 million, loans HFS of $30.7 million, other assets of $13.1 million, and FHLB stock of $5.8 million. These increases were partially offset by decreases in total cash and cash equivalents of $40.3 million, securities available-for-sale of $23.7 million, mortgage servicing rights ("MSR") of $8.9 million, certificates of deposit at other financial institutions of $5.6 million, CDI, net of $3.7 million, deferred tax asset, net of $3.2 million, operating lease right-of-use assets of $1.7 million, and premises and equipment, net of $900,000.

LOAN PORTFOLIO                        
(Dollars in thousands) September 30, 2024  June 30, 2024  September 30, 2023 
  Amount  Percent  Amount  Percent  Amount  Percent 
REAL ESTATE LOANS                        
Commercial $352,933   14.1% $359,404   14.4% $364,673   15.2%
Construction and development  292,366   11.7   274,209   11.0   289,873   12.0 
Home equity  75,063   3.0   73,749   3.0   67,103   2.8 
One-to-four-family (excludes HFS)  591,666   23.7   588,966   23.7   540,670   22.5 
Multi-family  238,462   9.6   239,675   9.6   243,661   10.1 
Total real estate loans  1,550,490   62.1   1,536,003   61.7   1,505,980   62.6 
                         
CONSUMER LOANS                        
Indirect home improvement  552,226   22.2   563,621   22.7   562,650   23.4 
Marine  76,845   3.1   74,627   3.0   73,887   3.1 
Other consumer  3,346   0.1   3,440   0.1   3,547   0.1 
Total consumer loans  632,417   25.4   641,688   25.8   640,084   26.6 
                         
COMMERCIAL BUSINESS LOANS                        
Commercial and industrial ("C&I")  296,773   11.9   285,183   11.5   236,520   9.8 
Warehouse lending  15,249   0.6   25,548   1.0   23,489   1.0 
Total commercial business loans  312,022   12.5   310,731   12.5   260,009   10.8 
Total loans receivable, gross  2,494,929   100.0%  2,488,422   100.0%  2,406,073   100.0%
                         
Allowance for credit losses on loans  (31,232)      (31,238)      (30,501)    
Total loans receivable, net $2,463,697      $2,457,184      $2,375,572     
 

Loans receivable, net was unchanged at $2.46 billion at September 30, 2024 and June 30, 2024, and increased $88.1 million from $2.38 billion at September 30, 2023. Total real estate loans remained virtually unchanged at $1.55 billion at September 30, 2024, compared to June 30, 2024, however, there were notable shifts within the portfolio. Specifically, construction and development loans increased $18.2 million, one-to-four-family loans (excluding HFS) increased $2.7 million mainly due to new loan originations, and home equity loans increased $1.3 million. These gains were partially offset by declines of $6.5 million in commercial real estate loans and $1.2 million in multi-family loans.  In addition, commercial business loans increased $1.3 million to $312.0 million at September 30, 2024, up from $310.7 million on June 30, 2024, resulting from an increase of $11.6 million in C&I loans and a decrease of $10.3 million in warehouse lending.  Consumer loans decreased $9.3 million to $632.4 million at September 30, 2024, compared to June 30, 2024, resulting from an $11.4 million decrease in indirect home improvement loans, partially offset by an increase of $2.2 million in marine loans. 

The composition of CRE loans at the dates indicated were as follows:

(Dollars in thousands)            
  September 30, 2024  June 30, 2024  September 30, 2023 
CRE by Type: Amount  Amount  Amount 
Agriculture $3,610  $3,639  $3,926 
CRE Non-owner occupied:            
Office  40,672   41,381   41,878 
Retail  36,070   37,507   37,865 
Hospitality/restaurant  27,743   28,314   25,252 
Self storage  19,130   19,141   21,381 
Mixed use  17,881   18,062   16,768 
Industrial  15,402   17,163   17,431 
Senior housing/assisted living  7,621   7,675   8,556 
Other (1)  6,684   6,847   7,814 
Land  2,523   3,021   6,381 
Education/worship  2,545   2,571   2,645 
Total CRE non-owner occupied  176,271   181,682   185,971 
CRE owner occupied:            
Industrial  63,577   63,969   63,307 
Office  42,156   41,978   41,663 
Retail  19,968   20,885   23,228 
Hospitality/restaurant  10,528   10,800   14,153 
Other (2)  8,116   8,354   8,850 
Car wash  9,575   9,607   7,818 
Automobile related  8,874   8,200   8,193 
Education/worship  4,609   4,610   4,617 
Mixed use  5,649   5,680   2,947 
Total CRE owner occupied  173,052   174,083   174,776 
Total $352,933  $359,404  $364,673 

__________________________________

(1) Primarily includes loans secured by mobile home parks totaling $774,000, $782,000, and $2.4 million, RV parks totaling $689,000, $692,000, and $702,000, automobile-related collateral totaling $594,000, $599,000, and $0, and other collateral totaling $4.6 million, $4.7 million, and $4.8 million at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(2) Primarily includes loans secured by gas stations totaling $1.5 million, $1.6 million and $1.7 million, non-profit organization totaling $901,000, $908,000 and $928,000, and other collateral totaling $5.7 million, $5.1 million and $6.2 million at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
   

The following tables includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:

(Dollars in thousands)  For the Quarter Ended    Current Weighted
  Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30,    Average
CRE by type: 2024 2025 2025 2025 2025 2026 2026 2026 Total Rate
Agriculture $926 $— $424 $— $311 $181 $259 $306 $2,407 6.40%
Apartment  9,990  9,817  5,271  1,829  18,671  1,908  14,485  9,797  71,768 4.87%
Auto related  —  —  2,091  —  —  —  —  —  2,091 4.18%
Hotel / hospitality  —  579  1,212  1,336  —  118  1,307  —  4,552 4.39%
Industrial  8,337  897  588  —  10,361  584  173  1,636  22,576 5.29%
Mixed use  795  1,750  3,490  250  318  —  —  —  6,603 5.00%
Office  4,702  11,171  —  4,214  988  528  1,666  566  23,835 4.88%
Other  1,227  —  116  1,168  246  901  —  2,545  6,203 4.96%
Retail  1,266  2,006  —  83  —  465  3,285  —  7,105 4.15%
Senior housing and assisted living  —  —  —  —  —  2,186  —  —  2,186 4.75%
Total $27,243 $26,220 $13,192 $8,880 $30,895 $6,871 $21,175 $14,850 $149,326 4.91%
 

A breakdown of construction loans at the dates indicated were as follows:

(Dollars in thousands)                
  September 30, 2024  June 30, 2024 
Construction Types: Amount  Percent  Amount  Percent 
Commercial construction ─ retail $8,710   3.0% $8,698   3.2%
Commercial construction ─ office  4,737   1.6   4,737   1.7 
Commercial construction ─ self storage  10,408   3.5   10,000   3.6 
Commercial construction ─ car wash  7,807   2.7   7,807   2.8 
Multi-family  30,931   10.6   30,960   11.3 
Custom construction ─ single family residential and single family manufactured residential  43,528   14.9   46,107   16.8 
Custom construction ─ land, lot and acquisition and development  8,220   2.8   7,310   2.7 
Speculative residential construction ─ vertical  145,549   49.8   131,293   47.9 
Speculative residential construction ─ land, lot and acquisition and development  32,476   11.1   27,297   10.0 
Total $292,366   100.0% $274,209   100.0%


(Dollars in thousands)                
  September 30, 2024  September 30, 2023 
Construction Types: Amount  Percent  Amount  Percent 
Commercial construction ─ retail $8,710   3.0% $7,347   2.5%
Commercial construction ─ office  4,737   1.6   4,591   1.6 
Commercial construction ─ self storage  10,408   3.5   10,734   3.7 
Commercial construction ─ car wash  7,807   2.7   7,287   2.5 
Multi-family  30,931   10.6   52,913   18.3 
Custom construction ─ single family residential and single family manufactured residential  43,528   14.9   44,542   15.4 
Custom construction ─ land, lot and acquisition and development  8,220   2.8   7,012   2.4 
Speculative residential construction ─ vertical  145,549   49.8   124,244   42.8 
Speculative residential construction ─ land, lot and acquisition and development  32,476   11.1   31,203   10.8 
Total $292,366   100.0% $289,873   100.0%
 

Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows:

(Dollars in thousands) For the Three Months Ended  For the Three Months Ended         
  September 30, 2024  June 30, 2024         
  Amount  Percent  Amount  Percent  $ Change  % Change 
Purchase $168,088   85.7% $193,715   92.3% $(25,627)  (13.2)%
Refinance  28,001   14.3   16,173   7.7   11,828   73.1%
Total $196,089   100.0% $209,888   100.0% $(13,799)  (6.5)%


(Dollars in thousands) For the Three Months Ended September 30,         
  2024  2023         
  Amount  Percent  Amount  Percent  $ Change  % Change 
Purchase $168,088   85.7% $139,345   92.1% $28,743   20.6%
Refinance  28,001   14.3   12,001   7.9   16,000   133.3%
Total $196,089   100.0% $151,346   100.0% $44,743   29.6%


(Dollars in thousands) For the Nine Months Ended September 30,         
  2024  2023         
  Amount  Percent  Amount  Percent  $ Change  % Change 
Purchase $497,705   88.8% $387,211   91.8% $110,494   28.5%
Refinance  62,546   11.2   34,635   8.2   27,911   80.6%
Total $560,251   100.0% $421,846   100.0% $138,405   32.8%
 

During the quarter ended September 30, 2024, the Company sold $167.6 million of one-to-four-family loans compared to $164.5 million during the previous quarter and $117.6 million during the same quarter one year ago. Gross margins on home loan sales were unchanged at 2.96% for both quarters ended September 30, 2024, and  June 30, 2024, and declined from 3.08% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.

Liabilities and Equity Summary

Changes in deposits at the dates indicated were as follows:

(Dollars in thousands)                        
  September 30, 2024  June 30, 2024         
Transactional deposits: Amount  Percent  Amount  Percent  $ Change  % Change 
Noninterest-bearing checking $641,270   26.4% $613,137   25.7% $28,133   4.6%
Interest-bearing checking (1)  165,944   6.8   166,839   7.0   (895)  (0.5)
Escrow accounts related to mortgages serviced (2)  16,483   0.7   10,212   0.4   6,271   61.4 
Subtotal  823,697   33.9   790,188   33.1   33,509   4.2 
Savings  151,364   6.2   151,398   6.4   (34)  (0.0)
Money market (3)  340,049   14.0   343,995   14.4   (3,946)  (1.1)
Subtotal  491,413   20.2   495,393   20.8   (3,980)  (0.8)
Certificates of deposit less than $100,000 (4)  533,441   22.0   530,537   22.3   2,904   0.5 
Certificates of deposit of $100,000 through $250,000  452,705   18.7   427,893   18.0   24,812   5.8 
Certificates of deposit greater than $250,000  126,075   5.2   138,792   5.8   (12,717)  (9.2)
Subtotal  1,112,221   45.9   1,097,222   46.1   14,999   1.4 
Total $2,427,331   100.0% $2,382,803   100.0% $44,528   1.9%


(Dollars in thousands)                        
  September 30, 2024  September 30, 2023         
Transactional deposits: Amount  Percent  Amount  Percent  $ Change  % Change 
Noninterest-bearing checking $641,270   26.4% $643,670   26.2% $(2,400)  (0.4)%
Interest-bearing checking (1)  165,944   6.8   219,468   8.9   (53,524)  (24.4)
Escrow accounts related to mortgages serviced (2)  16,483   0.7   26,489   1.1   (10,006)  (37.8)
Subtotal  823,697   33.9   889,627   36.2   (65,930)  (7.4)
Savings  151,364   6.2   157,901   6.4   (6,537)  (4.1)
Money market (3)  340,049   14.0   389,962   15.9   (49,913)  (12.8)
Subtotal  491,413   20.2   547,863   22.3   (56,450)  (10.3)
Certificates of deposit less than $100,000 (4)  533,441   22.0   527,032   21.5   6,409   1.2 
Certificates of deposit of $100,000 through $250,000  452,705   18.7   406,545   16.6   46,160   11.4 
Certificates of deposit greater than $250,000  126,075   5.2   83,377   3.4   42,698   51.2 
Subtotal  1,112,221   45.9   1,016,954   41.5   95,267   9.4 
Total $2,427,331   100.0% $2,454,444   100.0% $(27,113)  (1.1)%

 

__________________________________

(1) There were no brokered deposits at September 30, 2024 and  June 30, 2024, compared to $50.1 million at September 30, 2023.                  
(2) Noninterest-bearing accounts.
(3) Includes $1.0 million, $4.0 million and $51,000 of brokered deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
(4) Includes $250.2 million, $261.0 million, and $323.3 million of brokered deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
   

 

At September 30, 2024, CDs, which include retail and non-retail CDs, totaled $1.11 billion, compared to $1.10 billion at June 30, 2024 and $1.02 billion at September 30, 2023, with non-retail CDs representing 22.5%, 24.9% and 33.2% of total CDs at such dates, respectively. At September 30, 2024, non-retail CDs, which include brokered CDs, online CDs and public funds CDs, decreased $10.4 million to $262.9 million, compared to $273.4 million at June 30, 2024, primarily due to a decrease of $10.8 million in brokered CDs. Non-retail CDs totaled $262.9 million at September 30, 2024, compared to $337.2 million at September 30, 2023.

At September 30, 2024, the Bank had uninsured deposits of approximately $644.9 million, compared to approximately $586.6 million at June 30, 2024, and $591.6 million at September 30, 2023.  The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.

At September 30, 2024, borrowings decreased $18.1 million to $163.8 million at September 30, 2024, from $181.9 million at June 30, 2024, and increased $41.9 million from $121.9 million at September 30, 2023. These borrowings were comprised of FHLB advances of $153.8 million, and overnight borrowings of $10.0 million.

Total stockholders’ equity increased $4.9 million to $288.9 million at September 30, 2024, from $284.0 million at June 30, 2024, and increased $38.2 million, from $250.7 million at September 30, 2023. The increase in stockholders’ equity at September 30, 2024, compared to June 30, 2024, reflects net income of $10.3 million, partially offset by cash dividends paid of $2.1 million. Stockholders’ equity was also impacted by decreases in unrealized net losses on securities available for sale of $4.2 million, net of tax, and decreases in unrealized net gains on fair value and cash flow hedges of $7.0 million, net of tax, reflecting changes in market interest rates during the quarter, resulting in a $2.7 million increase in accumulated other comprehensive loss, net of tax. Book value per common share was $37.45 at September 30, 2024, compared to $37.15 at June 30, 2024, and $32.58 at September 30, 2023.

The Bank is considered well capitalized under the capital requirements established by the Federal Deposit Insurance Corporation (“FDIC”) with a total risk-based capital ratio of 14.2%, a Tier 1 leverage capital ratio of 11.2%, and a common equity Tier 1 (“CET1”) capital ratio of 12.9% at September 30, 2024.

The Company exceeded all regulatory capital requirements with a total risk-based capital ratio of 14.4%, a Tier 1 leverage capital ratio of 9.7%, and a CET1 ratio of 11.2% at September 30, 2024.

Credit Quality

The allowance for credit losses on loans (“ACLL”) was $31.2 million, or 1.25% of gross loans receivable (excluding loans HFS) at September 30, 2024, compared to $31.2 million, or 1.26% of gross loans receivable (excluding loans HFS), at June 30, 2024, and $30.5 million, or 1.27% of gross loans receivable (excluding loans HFS), at September 30, 2023. The virtually static balance in the ACLL at September 30, 2024, compared to the prior quarter was primarily due to insignificant changes in the loan portfolio period over period and provision for credit losses on loans that offset consumer loan net charge-offs.  The increase of $731,000 in the ACLL from the same quarter the prior year was primarily due to organic loan growth and increases in nonperforming loans and net charge-offs. The allowance for credit losses on unfunded loan commitments decreased $79,000 to $1.5 million at September 30, 2024, compared to $1.6 million at June 30, 2024, and decreased $291,000 from $1.8 million at September 30, 2023. 

Nonperforming loans decreased $634,000 to $10.8 million at September 30, 2024, compared to $11.4 million at June 30, 2024, and increased $5.2 million from $5.6 million at September 30, 2023. The decrease in nonperforming loans compared to the prior quarter was primarily due to decreases in nonperforming indirect home improvement loans of $549,000 and marine loans of $94,000. The increase in nonperforming loans compared to the same quarter the prior year was primarily due to increases in nonperforming construction and development loans of $4.7 million and commercial business loans of $461,000.

Loans classified as substandard decreased $1.1 million to $23.2 million at September 30, 2024, compared to $24.3 million at June 30, 2024, and increased $4.0 million from $19.2 million at September 30, 2023.  The decrease in substandard loans compared to the prior quarter was primarily due to a decrease of $549,000 in indirect home improvement loans, $323,000 in commercial real estate loans, $94,000 in marine loans, $74,000 in C&I loans, and $59,000 in one-to-four family loans.  The increase in substandard loans compared to the prior year was primarily due to increases of $4.7 million in construction and development loans, $108,000 in home equity loans, $102,000 in indirect home improvement loans, partially offset by decreases of $462,000 in C&I loans, $293,000 in one-to-four-family loans, and $173,000 in marine loans. There was no other real estate owned (“OREO”) property at September 30, 2024 and June 30, 2024, compared to one OREO property (a closed branch in Centralia, Washington) of $570,000 at September 30, 2023.

Operating Results

Net interest income increased $610,000 to $31.2 million for the three months ended September 30, 2024, from $30.6 million for the three months ended September 30, 2023, primarily due to an increase in interest and dividend income of $3.8 million, partially offset by an increase in interest expense of $3.2 million. The $3.8 million increase in total interest income was primarily due to an increase of $3.9 million in interest income on loans receivable, including fees, primarily as a result of new loans being originated at higher rates and variable rate loans repricing higher. The $3.2 million increase in total interest expense was primarily the result of higher market interest rates, higher utilization of borrowings and a shift in deposit mix from transactional accounts to higher cost CDs.

For the nine months ended September 30, 2024, net interest income decreased $857,000 to $92.0 million, from $92.8 million for the nine months ended September 30, 2023, resulting from an increase in interest expense of $16.0 million and an increase in interest income of $15.1 million.

NIM (annualized) increased one basis point to 4.35% for the three months ended September 30, 2024, from 4.34% for the same period in the prior year, and decreased 26 basis points to 4.30% for the nine months ended September 30, 2024, from 4.56% for the nine months ended September 30, 2023. The change in NIM for the three and nine months ended September 30, 2024 compared to the same periods in 2023, reflects the increased costs of deposits and borrowings, which outpaced the increased yields earned on interest-earning assets. 

The average total cost of funds, including noninterest-bearing checking, increased 47 basis points to 2.39% for the three months ended September 30, 2024, from 1.92% for the three months ended September 30, 2023. This increase was predominantly due to higher market rates for deposits and increased utilization of higher cost borrowings. The average cost of funds increased 75 basis points to 2.33% for the nine months ended September 30, 2024, from 1.58% for the nine months ended September 30, 2023, also reflecting increases in market interest rates over last year and increased utilization of borrowings. Management remains focused on matching deposit/liability duration with the duration of loans/assets where feasible.

For the three and nine months ended September 30, 2024, the provision for credit losses on loans was $1.5 million and $4.0 million, compared to $683,000 and $4.1 million for the three and nine months ended September 30, 2023. The provision for credit losses on loans reflects an increase in charge-off activity for the quarter and increases in the loan portfolio for the year-to-date periods.

During the three months ended September 30, 2024, net charge-offs increased $1.1 million to $1.6 million, compared to $531,000 for the same period last year.  This increase was the result of increased net charge-offs of $996,000 in indirect home improvement loans and $82,000 in marine loans, partially offset by a net recovery of $8,000 in other consumer loans. Net charge-offs increased $2.7 million to $4.3 million during the nine months ended September 30, 2024, compared to $1.6 million during the nine months ended September 30, 2023.  This increase included net charge-off increases of $1.5 million in indirect home improvement loans, $1.0 million C&I loans, $146,000 in marine loans and $117,000 in other consumer loans. Management attributes the increase in net charge-offs over the year primarily to volatile economic conditions.

Noninterest income increased $985,000 to $6.0 million for the three months ended September 30, 2024, from $5.0 million for the three months ended September 30, 2023. The increase reflects a $648,000 increase in gain on sale of loans, primarily as a result of the increased volume of loans sold and an increase of $566,000 in other noninterest income, primarily due to fair value changes on loans.  Noninterest income during the three months ended September 30, 2024, also reflects a $141,000 gain on the sale of MSRs, with no similar transaction occurring in the comparable quarter last year.  These increases were partially offset by a $400,000 decrease in service charges and fee income, primarily due to the sale of MSRs in the first quarter of 2024.  Noninterest income increased $1.9 million to $16.9 million for the nine months ended September 30, 2024, from $15.0 million for the nine months ended September 30, 2023.  This increase was primarily the result of an $8.4 million gain on sale of MSRs recorded during the first nine months of 2024 with no similar transaction occurring in the comparable nine month period in 2023, and a $1.5 million increase in gain on sale of loans, partially offset by a $7.8 million loss on sale of investment securities resulting from management's strategic decision to increase the yields earned on and reduce the duration of the securities portfolio, and an $839,000 decrease in service charges and fee income due to a reduction in loan servicing fees due to the sale of MSRs in the first quarter of 2024. 

Noninterest expense increased $2.2 million to $25.8 million for the three months ended September 30, 2024, from $23.6 million for the three months ended September 30, 2023. The increase in noninterest expense was primarily due to increases of $506,000 in impairment of MSRs, $482,000 in salaries and benefits, $557,000 in professional and board fees, which included $571,000 in nonrecurring consulting charges and legal fees related to application/system upgrades and tax credit work, $418,000 in operations, $315,000 in data processing, and a decrease of $105,000 in amortization of CDI. Noninterest expense increased $1.9 million to $73.2 million for the nine months ended September 30, 2024, from $71.3 million for the nine months ended September 30, 2023.  This increase was primarily due to increases of $1.1 million in data processing, $1.0 million in professional and board fees which included $824,000 in nonrecurring consulting charges and legal fees for the reasons stated above, $610,000 in operations expense, and $545,000 in impairment of MSRs, partially offset by a decrease of $1.6 million in acquisition costs as a result of no acquisition costs during the current period.

For the three months ended September 30, 2024, the Company recorded a benefit for income taxes of $420,000 as compared to a provision for income taxes of $2.5 million for the three months ended September 30, 2023. The tax benefit was primarily due to the purchase during the quarter ended September 30, 2024, of alternative energy tax credits available under the Inflation Reduction Act of 2022, resulting in a gain of $2.3 million, which was partially offset by the $1.8 million provision for income taxes recorded on net income for the three months ended September 30, 2024. The Inflation Reduction Act of 2022 introduced several energy tax credits designed to promote clean energy investments, reduce carbon emissions, and accelerate the transition to renewable energy. The effective corporate income tax rates for the three months ended September 30, 2024 and 2023 were (4.3)% which was reduced by 2,300 basis points due to the energy tax credits discussed above, and 22.0%, respectively. The decrease in the effective corporate income tax rate, excluding the effects of the energy tax credits, was attributable to tax benefits derived from the exercises of employee stock options during the current quarter.

About FS Bancorp

FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon.  It operates through 27 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver.

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, a recession or slowed economic growth; changes in the interest rate environment, including the increases and decrease in the Federal Reserve benchmark rate and duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown;  increased competitive pressures, changes in the interest rate environment, adverse changes in the securities markets, the Company’s ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company’s ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; legislative and regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for us; environmental, social and governance goals; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on its website at www.fsbwa.com and on the SEC's website at www.sec.gov.

Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management's beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.


FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts) (Unaudited)
 
              Linked  Prior Year 
  September 30,  June 30,  September 30,  Quarter  Quarter 
  2024  2024  2023  % Change  % Change 
ASSETS                    
Cash and due from banks $17,950  $20,005  $18,137   (10)  (1)
Interest-bearing deposits at other financial institutions  22,390   13,006   62,536   72   (64)
Total cash and cash equivalents  40,340   33,011   80,673   22   (50)
Certificates of deposit at other financial institutions  12,001   12,707   17,636   (6)  (32)
Securities available-for-sale, at fair value  228,199   221,182   251,917   3   (9)
Securities held-to-maturity, net  8,455   8,455   8,455   —   — 
Loans held for sale, at fair value  49,373   53,811   18,636   (8)  165 
Loans receivable, net  2,463,697   2,457,184   2,375,572   —   4 
Accrued interest receivable  14,014   13,792   13,925   2   1 
Premises and equipment, net  30,026   29,999   30,926   —   (3)
Operating lease right-of-use  5,365   5,784   7,042   (7)  (24)
Federal Home Loan Bank stock, at cost  9,504   10,322   3,696   (8)  157 
Other real estate owned  —   —   570   —   (100)
Deferred tax asset, net  4,222   4,590   7,424   (8)  (43)
Bank owned life insurance (“BOLI”), net  38,453   38,201   37,480   1   3 
MSRs, held at the lower of cost or fair value  8,739   9,352   17,657   (7)  (51)
Goodwill  3,592   3,592   3,592   —   — 
Core deposit intangible, net  14,586   15,483   18,323   (6)  (20)
Other assets  39,642   23,912   26,548   66   49 
TOTAL ASSETS $2,970,208  $2,941,377  $2,920,072   1   2 
LIABILITIES                    
Deposits:                    
Noninterest-bearing accounts $657,753  $623,349  $670,158   6   (2)
Interest-bearing accounts  1,769,578   1,759,454   1,784,286   1   (1)
Total deposits  2,427,331   2,382,803   2,454,444   2   (1)
Borrowings  163,806   181,895   121,895   (10)  34 
Subordinated notes:                    
Principal amount  50,000   50,000   50,000   —   — 
Unamortized debt issuance costs  (423)  (439)  (489)  (4)  (13)
Total subordinated notes less unamortized debt issuance costs  49,577   49,561   49,511   —   — 
Operating lease liability  5,548   5,979   7,269   (7)  (24)
Other liabilities  35,044   37,113   36,288   (6)  (3)
Total liabilities  2,681,306   2,657,351   2,669,407   1   — 
COMMITMENTS AND CONTINGENCIES                    
STOCKHOLDERS’ EQUITY                    
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding  —   —   —   —   — 
Common stock, $.01 par value; 45,000,000 shares authorized; 7,817,172 shares issued and outstanding at September 30, 2024, 7,742,607 at June 30, 2024, and 7,796,095 at September 30, 2023  78   77   78   1   — 
Additional paid-in capital  55,264   55,834   57,464   (1)  (4)
Retained earnings  251,843   243,651   222,532   3   13 
Accumulated other comprehensive loss, net of tax  (18,283)  (15,536)  (29,409)  18   (38)
Total stockholders’ equity  288,902   284,026   250,665   2   15 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $2,970,208  $2,941,377  $2,920,072   1   2 
 



FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts) (Unaudited)
 
  Three Months Ended  Linked  Prior Year 
  September 30,  June 30,  September 30,  Quarter  Quarter 
  2024  2024  2023  % Change  % Change 
INTEREST INCOME                    
Loans receivable, including fees $43,800  $42,406  $39,874   3   10 
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions  3,243   3,534   3,396   (8)  (5)
Total interest and dividend income  47,043   45,940   43,270   2   9 
INTEREST EXPENSE                    
Deposits  13,486   13,252   10,462   2   29 
Borrowings  1,828   1,801   1,689   1   8 
Subordinated notes  485   486   485   —   — 
Total interest expense  15,799   15,539   12,636   2   25 
NET INTEREST INCOME  31,244   30,401   30,634   3   2 
PROVISION FOR CREDIT LOSSES  1,513   1,077   548   40   176 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  29,731   29,324   30,086   1   (1)
NONINTEREST INCOME                    
Service charges and fee income  2,482   2,479   2,882   —   (14)
Gain on sale of loans  2,523   2,463   1,875   2   35 
Gain on sale of MSRs  141   —   —   NM   NM 
Gain on sale of investment securities, net  11   151   —   (93)  NM 
Earnings on cash surrender value of BOLI  252   242   233   4   8 
Other noninterest income  558   533   (8)  5   (7,075)
Total noninterest income  5,967   5,868   4,982   2   20 
NONINTEREST EXPENSE                    
Salaries and benefits  13,985   13,378   13,503   5   4 
Operations  3,827   3,519   3,409   9   12 
Occupancy  1,662   1,669   1,588   —   5 
Data processing  2,156   2,058   1,841   5   17 
Loan costs  666   653   564   2   18 
Professional and board fees  1,223   888   666   38   84 
FDIC insurance  533   450   561   18   (5)
Marketing and advertising  377   377   452   —   (17)
Amortization of core deposit intangible  897   919   1,002   (2)  (10)
Impairment (recovery) of servicing rights  506   (54)  —   (1,037)  NM 
Total noninterest expense  25,832   23,857   23,586   8   10 
INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES  9,866   11,335   11,482   (13)  (14)
(BENEFIT) PROVISION FOR INCOME TAXES  (420)  2,376   2,529   (118)  (117)
NET INCOME $10,286  $8,959  $8,953   15   15 
Basic earnings per share $1.32  $1.15  $1.15   15   15 
Diluted earnings per share $1.29  $1.13  $1.13   14   14 
 


  Nine Months Ended  Year 
  September 30,  September 30,  Over Year 
  2024  2023  % Change 
INTEREST INCOME            
Loans receivable, including fees $127,203  $114,082   12 
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions  10,660   8,667   23 
Total interest and dividend income  137,863   122,749   12 
INTEREST EXPENSE            
Deposits  39,620   24,696   60 
Borrowings  4,796   3,749   28 
Subordinated note  1,456   1,456   — 
Total interest expense  45,872   29,901   53 
NET INTEREST INCOME  91,991   92,848   (1)
PROVISION FOR CREDIT LOSSES  3,989   3,372   18 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  88,002   89,476   (2)
NONINTEREST INCOME            
Service charges and fee income  7,513   8,352   (10)
Gain on sale of loans  6,824   5,298   29 
Gain on sale of MSRs  8,356   —   NM 
Loss on sale of investment securities, net  (7,836)  —   NM 
Earnings on cash surrender value of BOLI  734   681   8 
Other noninterest income  1,355   703   93 
Total noninterest income  16,946   15,034   13 
NONINTEREST EXPENSE            
Salaries and benefits  40,920   40,880   — 
Operations  10,354   9,744   6 
Occupancy  5,036   4,670   8 
Data processing  6,172   5,092   21 
Loan costs  1,904   2,077   (8)
Professional and board fees  3,034   2,001   52 
FDIC insurance  1,515   1,732   (13)
Marketing and advertising  981   1,072   (8)
Acquisition costs  —   1,562   100 
Amortization of core deposit intangible  2,757   2,484   11 
Impairment of servicing rights  545   —   NM 
Total noninterest expense  73,218   71,314   3 
INCOME BEFORE PROVISION FOR INCOME TAXES  31,730   33,196   (4)
PROVISION FOR INCOME TAXES  4,088   6,915   (41)
NET INCOME $27,642  $26,281   5 
Basic earnings per share $3.54  $3.38   5 
Diluted earnings per share $3.45  $3.33   4 
 

KEY FINANCIAL RATIOS AND DATA (Unaudited)

  At or For the Three Months Ended 
  September 30,  June 30,  September 30, 
  2024  2024  2023 
PERFORMANCE RATIOS:            
Return on assets (ratio of net income to average total assets) (1)  1.38%  1.22%  1.22%
Return on equity (ratio of net income to average equity) (1)  14.08   12.72   13.81 
Yield on average interest-earning assets (1)  6.56   6.48   6.13 
Average total cost of funds (1)  2.39   2.38   1.92 
Interest rate spread information – average during period  4.17   3.33   4.21 
Net interest margin (1)  4.35   4.29   4.34 
Operating expense to average total assets (1)  3.47   3.26   3.23 
Average interest-earning assets to average interest-bearing liabilities (1)  144.28   166.25   145.14 
Efficiency ratio (2)  69.42   65.78   66.22 
Common equity ratio (ratio of stockholders' equity to total assets)  9.73   9.66   8.58 
Tangible common equity ratio (3)  9.17   9.07   7.89 


  For the Nine Months Ended 
  September 30,  September 30, 
  2024  2023 
PERFORMANCE RATIOS:        
Return on assets (ratio of net income to average total assets) (1)  1.25%  1.25%
Return on equity (ratio of net income to average equity) (1)  13.05   14.13 
Yield on average interest-earning assets (1)  6.44   6.03 
Average total cost of funds (1)  2.33   1.58 
Interest rate spread information – average during period  4.11   4.45 
Net interest margin (1)  4.30   4.56 
Operating expense to average total assets (1)  3.31   3.39 
Average interest-earning assets to average interest-bearing liabilities  144.14   146.23 
Efficiency ratio (2)  67.21   66.10 


  September 30,  June 30,  September 30, 
  2024  2024  2023 
ASSET QUALITY RATIOS AND DATA:            
Nonperforming assets to total assets at end of period (4)  0.36%  0.39%  0.21%
Nonperforming loans to total gross loans (excluding loans HFS) (5)  0.43   0.46   0.23 
Allowance for credit losses – loans to nonperforming loans (5)  290.07   273.95   493.46 
Allowance for credit losses – loans to total gross loans (excluding loans HFS)  1.25   1.26   1.27 


  At or For the Three Months Ended 
  September 30,  June 30,  September 30, 
  2024  2024  2023 
PER COMMON SHARE DATA:            
Basic earnings per share $1.32  $1.15  $1.15 
Diluted earnings per share $1.29  $1.13  $1.13 
Weighted average basic shares outstanding  7,676,102   7,688,246   7,667,981 
Weighted average diluted shares outstanding  7,854,389   7,796,253   7,780,430 
Common shares outstanding at end of period  7,713,359(6)  7,644,463(7)  7,693,951(8)
Book value per share using common shares outstanding $37.45  $37.15  $32.58 
Tangible book value per share using common shares outstanding (3) $35.10  $34.66  $29.73 

 

__________________________________

(1) Annualized.
(2) Total noninterest expense as a percentage of net interest income and total noninterest income.
(3) Represents a non-GAAP financial measure.  For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below.
(4) Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets.
(5) Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due.
(6) Common shares were calculated using shares outstanding of 7,817,172 at September 30, 2024, less 103,813 unvested restricted stock shares.
(7) Common shares were calculated using shares outstanding of 7,742,607 at June 30, 2024, less 98,144 unvested restricted stock shares.
(8) Common shares were calculated using shares outstanding of 7,796,095 at September 30, 2023, less 102,144 unvested restricted stock shares.


(Dollars in thousands) For the Three Months Ended September 30,  For the Nine Months Ended September 30,  Linked Qtr.  Prior Year Qtr. 
Average Balances 2024  2023  2024  2023  $ Change  $ Change 
Assets                        
Loans receivable, net (1) $2,536,106  $2,423,691  $2,504,129  $2,362,885  $112,415  $141,244 
Securities available-for-sale, at amortized cost  250,957   294,148   288,460   276,835   (43,191)  11,625 
Securities held-to-maturity  8,500   8,500   8,500   8,500   -   - 
Interest-bearing deposits and certificates of deposit at other financial institutions  48,546   68,369   49,887   67,163   (19,823)  (17,276)
FHLB stock, at cost  10,739   4,626   6,666   5,190   6,113   1,476 
Total interest-earning assets  2,854,848   2,799,334   2,857,642   2,720,573   55,514   137,069 
Noninterest-earning assets  105,941   102,052   98,099   88,936   3,889   9,163 
Total assets $2,960,789  $2,901,386  $2,955,741  $2,809,509  $59,403  $146,232 
Liabilities                        
Interest-bearing deposit accounts $1,737,793  $1,741,257  $1,788,324  $1,703,688  $(3,464) $84,636 
Borrowings  191,279   138,013   144,635   107,254   53,266   37,381 
Subordinated notes  49,567   49,500   49,550   49,484   67   66 
Total interest-bearing liabilities  1,978,639   1,928,770   1,982,509   1,860,426   49,869   122,083 
Noninterest-bearing deposit accounts  650,852   676,000   648,345   664,319   (25,148)  (15,974)
Other noninterest-bearing liabilities  40,606   39,365   41,965   36,095   1,241   5,870 
Total liabilities $2,670,097  $2,644,135  $2,672,819  $2,560,840  $25,962  $111,979 

__________________________________

(1) Includes loans HFS.
   

Non-GAAP Financial Measures:

In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States (“GAAP”), this earnings release presents non-GAAP financial measures that include tangible book value per share, and tangible common equity ratio. Management believes that providing the Company’s tangible book value per share and tangible common equity ratio is consistent with the capital treatment utilized by the investment community, which excludes intangible assets from the calculation of risk-based capital ratios and facilitates comparison of the quality and composition of the Company's capital over time and to its competitors. Where applicable, the Company has also presented comparable GAAP information.

These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

Reconciliation of the GAAP book value per share and common equity ratio and the non-GAAP tangible book value per share and tangible common equity ratio is presented below.

(Dollars in thousands, except share and per share amounts) September 30, June 30, September 30, 
Tangible Book Value Per Share: 2024 2024 2023 
Stockholders' equity (GAAP) $288,902  $284,026  $250,665  
Less: goodwill and core deposit intangible, net  (18,178)  (19,075)  (21,915) 
Tangible common stockholders' equity (non-GAAP) $270,724  $264,951  $228,750  
           
Common shares outstanding at end of period  7,713,359(1)  7,644,463(2)  7,693,951(3) 
           
Book value per share (GAAP) $37.45  $37.15  $32.58  
Tangible book value per share (non-GAAP) $35.10  $34.66  $29.73  
           
Tangible Common Equity Ratio:          
Total assets (GAAP) $2,970,208  $2,941,377  $2,920,072  
Less: goodwill and core deposit intangible assets  (18,178)  (19,075)  (21,915) 
Tangible assets (non-GAAP) $2,952,030  $2,922,302  $2,898,157  
           
Common equity ratio (GAAP)  9.73%  9.66%  8.58% 
Tangible common equity ratio (non-GAAP)  9.17   9.07   7.89  

_________________________

(1) Common shares were calculated using shares outstanding of 7,817,172 at September 30, 2024, less 103,813 unvested restricted stock shares.
(2) Common shares were calculated using shares outstanding of 7,742,607 at June 30, 2024, less 98,144 unvested restricted stock shares.
(3) Common shares were calculated using shares outstanding of 7,796,095 at September 30, 2023, less 102,144 unvested restricted stock shares.
   

 

Contacts:
Joseph C. Adams,
Chief Executive Officer
Matthew D. Mullet,
President/Chief Financial Officer
(425) 771-5299
www.FSBWA.com
  


FAQ

What was FS Bancorp's net income for Q3 2024?

FS Bancorp reported a net income of $10.3 million for Q3 2024.

How much is FS Bancorp's Q3 2024 dividend?

FS Bancorp declared a $0.27 per share cash dividend for Q3 2024.

When will FS Bancorp pay the Q3 2024 dividend?

The Q3 2024 dividend will be paid on November 21, 2024, to shareholders of record as of November 7, 2024.

What was the change in FS Bancorp's total deposits in Q3 2024?

Total deposits increased by $44.5 million to $2.43 billion in Q3 2024.

What was FS Bancorp's net interest margin in Q3 2024?

FS Bancorp's net interest margin increased to 4.35% in Q3 2024.

Stock FSBW logo
FS Bancorp, Inc.

NASDAQ:FSBW

FSBW Rankings

#3495 Ranked by Market Cap
#1200 Ranked by Dividends

FSBW Latest News

Nov 15, 2024
FS Bancorp, Inc. Authorizes Additional Share Repurchases
Oct 1, 2024
FS Bancorp, Inc. Appoints Terri L. Degner to Board of Directors
Jul 23, 2024
FS Bancorp, Inc. Reports Second Quarter Net Income of $9.0 Million or $1.13 Per Diluted Share and Previously Announced Share Repurchase Plan and 3.8% Increase in its Quarterly Dividend
Jul 19, 2024
FS Bancorp, Inc. and 1st Security Bank Announces the Promotion of Matthew D. Mullet to President
Jul 11, 2024
FS Bancorp, Inc. Announces Increase in its Cash Dividend and Authorizes Additional Share Repurchases

FSBW Stock Data

320.66M
6.54M
15.76%
70.35%
0.51%
Banks - Regional
Savings Institutions, Not Federally Chartered
Link
United States of America
MOUNTLAKE TERRACE