Core Viewpoint - FS Bancorp, Inc. reported a decrease in net income for the fourth quarter of 2024, primarily due to a tax provision compared to a tax benefit in the previous quarter, while total assets surpassed $3 billion through organic loan growth [1][2]. Financial Performance - Fourth quarter net income was $7.4 million, or $0.92 per diluted share, down from $9.8 million, or $1.23 per diluted share, in the same quarter last year [1]. - Net income for the year ended December 31, 2024, was $35.0 million, or $4.36 per diluted share, compared to $36.1 million, or $4.56 per diluted share for 2023 [1]. - The company recorded a net interest margin of 4.31% for the fourth quarter of 2024, slightly down from 4.35% in the previous quarter and up from 4.24% in the same quarter last year [4]. Asset and Deposit Trends - Total assets increased by $59.0 million, or 2.0%, to $3.03 billion at December 31, 2024, compared to $2.97 billion at both September 30, 2024, and December 31, 2023 [11]. - Total deposits decreased by $87.9 million, or 3.6%, to $2.34 billion at December 31, 2024, primarily due to a $107.9 million decrease in brokered deposits [4][20]. Loan Portfolio - Loans receivable, net increased by $38.3 million, or 1.6%, to $2.50 billion at December 31, 2024, compared to $2.46 billion at September 30, 2024, and increased by $100.5 million, or 4.2%, from $2.40 billion at December 31, 2023 [4][13]. - Consumer loans decreased by $12.2 million, or 1.9%, to $620.2 million at December 31, 2024, compared to $632.4 million in the previous quarter [4]. Capital and Dividends - The company’s tangible book value per share increased by 13.8% year over year to $36.02 at December 31, 2024, compared to $31.64 at December 31, 2023 [3]. - The Board of Directors approved a quarterly cash dividend increase of $0.01 to $0.28 per common share, marking the forty-eighth consecutive quarterly dividend [2]. Segment Performance - The Commercial and Consumer Banking segment reported net income of $7.4 million, while the Home Lending segment recorded a net loss of $39,000 for the fourth quarter of 2024 [4][6]. - Total average assets for the Commercial and Consumer Banking segment were $2.38 billion, while the Home Lending segment had total average assets of $606.8 million [7].

Acquisition and Growth - The Company completed the acquisition of seven retail bank branches from Columbia State Bank, gaining approximately $425.5 million in deposits and $66.1 million in loans[210]. - The Company’s strategic plan includes expanding into new markets and enhancing its banking franchise[212]. - The Company is actively involved in community activities, which strengthens its relationships within the markets served[211]. Loan Portfolio and Originations - As of September 30, 2024, the Company's loan portfolio consisted of real estate loans (62.1%), consumer loans (25.4%), and commercial business loans (12.5%)[213]. - The Company funded $27.2 million in fixture-secured consumer loans, comprising 1,230 loans during the quarter ended September 30, 2024[214]. - One-to-four-family loan originations totaled $196.2 million for the three months ended September 30, 2024, with $167.6 million sold to investors[215]. - The Company’s residential mortgage loans held for investment amounted to $591.7 million, representing 23.7% of the total gross loan portfolio as of September 30, 2024[215]. - One-to-four-family loan originations for the nine months ended September 30, 2024, totaled $560.3 million, a 32.8% increase from $421.8 million in the same period of 2023[242]. - The Company originated $94.8 million in fixture-secured loans for the nine months ended September 30, 2024, compared to $205.3 million for the year ended December 31, 2023[215]. Financial Performance - Net income for the three months ended September 30, 2024, was $10.3 million, a 14.4% increase from $9.0 million for the same period in 2023, primarily due to a $2.9 million decrease in provision for income tax expense[255]. - Net income for the nine months ended September 30, 2024, increased by $1.4 million to $27.6 million, driven by a $2.8 million decrease in the provision for income taxes[271]. - Noninterest income rose by $985,000 to $6.0 million for the three months ended September 30, 2024, primarily due to a $648,000 increase in gains on loan sales and a $566,000 increase in other noninterest income[266]. - Noninterest income increased $1.9 million to $16.9 million for the nine months ended September 30, 2024, from $15.0 million for the same period in 2023[283]. Interest Income and Expenses - The Company’s earnings are primarily dependent on net interest income, which is influenced by the balances of loans and investments outstanding[218]. - Net interest income rose by $610,000 to $31.2 million for the three months ended September 30, 2024, compared to $30.6 million for the same period in 2023, attributed to a $3.8 million increase in interest income[259]. - Interest income increased by $3.8 million to $47.0 million for the three months ended September 30, 2024, from $43.3 million in the prior year, driven by a $55.5 million increase in the average balance of total interest-earning assets[261]. - Total interest expense increased by $16.0 million for the nine months ended September 30, 2024, compared to the same period in 2023, mainly due to higher market interest rates and a shift in deposit mix[275]. - Interest expense increased $16.0 million to $45.9 million for the nine months ended September 30, 2024, from $29.9 million for the comparable period in 2023[280]. Asset Quality and Credit Losses - The Company emphasizes maintaining strong asset quality and diversifying its loan portfolio as part of its strategic focus[212]. - The allowance for credit losses (ACL) on loans totaled $31.2 million or 1.25% of gross loans receivable at September 30, 2024, down from $31.5 million or 1.30% at December 31, 2023[243]. - Classified loans decreased to $23.2 million at September 30, 2024, from $24.9 million at December 31, 2023[244]. - The provision for credit losses for the three months ended September 30, 2024, was $1.5 million, up from $548,000 in the same period of 2023, reflecting increased charge-off activity and growth in the loan portfolio[264]. - Net loan charge-offs increased to $1.6 million for the three months ended September 30, 2024, compared to $533,000 in the same period of 2023, driven by higher charge-offs in indirect home improvement loans and marine loans[265]. Deposits and Liabilities - Total deposits decreased by $95.0 million to $2.43 billion at September 30, 2024, reflecting declines in all categories except for certificates of deposit (CDs)[246]. - Total liabilities decreased by $26.9 million to $2.68 billion at September 30, 2024, primarily due to a $95.0 million decrease in deposits[245]. - Uninsured deposits increased to approximately $644.9 million or 26.6% of total deposits at September 30, 2024, compared to $606.5 million or 24.0% at December 31, 2023[249]. - Total borrowings increased by $70.1 million to $163.8 million at September 30, 2024, from $93.7 million at December 31, 2023, primarily due to a decline in total brokered deposits[252]. Capital and Stockholder Equity - Total stockholders' equity increased by $24.4 million to $288.9 million as of September 30, 2024, from $264.5 million at December 31, 2023, driven by net income of $27.6 million[253]. - As of September 30, 2024, the Bank exceeded all regulatory capital requirements with Tier 1 leverage-based capital at 11.2%, Tier 1 risk-based capital at 12.9%, total risk-based capital at 14.2%, and common equity Tier 1 capital ratio at 12.9%[299]. - FS Bancorp's regulatory capital ratios at September 30, 2024, were 9.7% for Tier 1 leverage-based capital, 11.2% for Tier 1 risk-based capital, 14.4% for total risk-based capital, and 11.2% for CET 1 capital ratio[300]. Operational Efficiency - The efficiency ratio weakened to 69.42% for the three months ended September 30, 2024, compared to 66.22% in the same period of 2023, indicating that noninterest expense growth outpaced revenue growth[268]. - The efficiency ratio weakened to 67.21% for the nine months ended September 30, 2024, compared to 66.10% for the same period in 2023[286]. - Noninterest expense increased by $2.2 million to $25.8 million for the three months ended September 30, 2024, mainly due to higher salaries, professional fees, and impairment of mortgage servicing rights[267]. - 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[285]. Market and Regulatory Compliance - The Bank's total borrowing capacity was $695.8 million with the FHLB of Des Moines, with unused borrowing capacity of $531.6 million as of September 30, 2024[289]. - As of September 30, 2024, FS Bancorp's unrestricted cash held at the Bank totaled $7.2 million[297]. - The current quarterly common stock dividend rate is $0.27 per share, with total dividends paid each quarter expected to be approximately $2.1 million[297]. - Approximately $1.4 million remained available for future stock repurchases as of September 30, 2024, with an additional program authorized for up to $5.0 million in repurchases until July 31, 2025[298]. - There have been no material changes in market risk disclosures since the 2023 Form 10-K[301]. - The Company's disclosure controls and procedures were deemed effective as of September 30, 2024, ensuring timely reporting and communication of required disclosures[303]. - No changes in internal control over financial reporting occurred during the three months ended September 30, 2024, that materially affected the internal control[304].

Core Insights - FS Bancorp reported revenue of $37.21 million for the quarter ended September 2024, reflecting a year-over-year increase of 4.5% [1] - Earnings per share (EPS) for the quarter was $1.29, up from $1.13 in the same quarter last year, representing a surprise of +12.17% compared to the consensus estimate of $1.15 [1] Financial Performance Metrics - Net Interest Margin was reported at 4.4%, slightly above the estimated 4.3% [1] - Efficiency Ratio stood at 69.4%, significantly higher than the average estimate of 62.7% [1] - Total Non-Interest Income was $5.97 million, slightly below the estimated $6 million [1] - Net Interest Income was reported at $31.24 million, marginally exceeding the estimate of $31.10 million [1] Stock Performance - FS Bancorp shares have returned -5.2% over the past month, contrasting with the Zacks S&P 500 composite's +2.8% change [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [2]

Company Performance - FS Bancorp reported quarterly earnings of $1.29 per share, exceeding the Zacks Consensus Estimate of $1.15 per share, and up from $1.13 per share a year ago, representing an earnings surprise of 12.17% [1] - The company posted revenues of $37.21 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.30%, and an increase from $35.62 million year-over-year [1] - FS Bancorp has consistently surpassed consensus EPS and revenue estimates over the last four quarters [1] Stock Performance - FS Bancorp shares have increased approximately 15.6% since the beginning of the year, while the S&P 500 has gained 22.7% [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $37.2 million, and for the current fiscal year, it is $4.44 on revenues of $141.7 million [4] - The estimate revisions trend for FS Bancorp is mixed, and changes in estimates for the coming quarters are anticipated following the recent earnings report [4][3] Industry Context - The Banks - West industry, to which FS Bancorp belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [5] - Bank of Hawaii, another company in the same industry, is expected to report a quarterly earnings decline of 30.8% year-over-year, with a consensus EPS estimate of $0.81 [5]

Financial Performance - FS Bancorp, Inc. reported a net income of $10.3 million, or $1.29 per diluted share, for Q3 2024, an increase from $9.0 million, or $1.13 per diluted share, in Q3 2023[1]. - The company reported a 3% increase in retained earnings, reaching $251,843 thousand compared to the previous quarter, and a 13% increase year-over-year[42]. - Net income for Q3 2024 reached $27,642,000, reflecting a 5% increase compared to $26,281,000 in Q3 2023[45]. - Basic earnings per share for Q3 2024 were $3.54, a 5% increase from $3.38 in Q3 2023[45]. - Basic earnings per share increased to $1.32 for the three months ended September 30, 2024, compared to $1.15 for the same period in 2023, reflecting a growth of 14.78%[48]. Deposits and Assets - Total deposits increased by $44.5 million, or 1.9%, to $2.43 billion at September 30, 2024, driven by a rise in noninterest-bearing checking and certificates of deposit[3]. - Total assets increased by $28.8 million, or 1.0%, to $2.97 billion as of September 30, 2024, compared to $2.94 billion at June 30, 2024[15]. - Total deposits as of September 30, 2024, were $2,427,331 thousand, a slight increase of 1.9% from $2,382,803 thousand in June 30, 2024[22]. - Cash and cash equivalents totaled $40,340 thousand, a 22% increase from the previous quarter but a 50% decrease year-over-year[42]. - The company’s total stockholders' equity rose to $288,902 thousand, reflecting a 2% increase from the previous quarter and a 15% increase year-over-year[42]. Loans and Credit Quality - Loans receivable remained stable at $2.46 billion as of September 30, 2024, reflecting an increase of $88.1 million, or 3.7%, from the previous year[3]. - The provision for credit losses on loans was $1.5 million for the three months ended September 30, 2024, compared to $683,000 for the same period in 2023, reflecting increased charge-off activity[35]. - Nonperforming loans decreased by $634,000 to $10.8 million at September 30, 2024, compared to $11.4 million at June 30, 2024, but increased by $5.2 million from $5.6 million at September 30, 2023[29]. - The allowance for credit losses on loans was $31.2 million, or 1.25% of gross loans receivable, at September 30, 2024, remaining virtually static compared to the prior quarter[28]. - The total amount of construction loans was detailed, with a significant portion maturing within the next two years, totaling $149.3 million[19]. Interest Income and Expenses - Net interest income for the three months ended September 30, 2024, increased by $610,000 to $31.2 million compared to $30.6 million for the same period in 2023, driven by a $3.8 million increase in interest and dividend income[31]. - Total interest expense surged to $45,872,000, a 53% increase from $29,901,000 in Q3 2023[45]. - The average total cost of funds increased by 47 basis points to 2.39% for the three months ended September 30, 2024, from 1.92% for the same period in 2023[34]. - The average total cost of funds increased to 2.33% from 1.58% year-over-year, indicating a rise in funding costs[47]. Capital and Ratios - Regulatory capital ratios were 14.2% for total risk-based capital and 11.2% for Tier 1 leverage capital at September 30, 2024, compared to 13.9% and 10.9% respectively in the previous quarter[6]. - The Bank's total risk-based capital ratio was 14.4% at September 30, 2024, exceeding all regulatory capital requirements[27]. - The common equity ratio increased to 9.73% as of September 30, 2024, compared to 8.58% a year earlier[46]. - The common equity ratio (GAAP) improved to 9.73% as of September 30, 2024, compared to 8.58% a year earlier, indicating stronger capital position[52]. Other Key Metrics - The efficiency ratio for Q3 2024 was 69.42%, slightly higher than 66.22% in Q3 2023[46]. - Return on assets improved to 1.38% in Q3 2024, compared to 1.22% in both the previous quarter and the same quarter last year[46]. - Noninterest income increased by $985,000 to $6.0 million for the three months ended September 30, 2024, primarily due to a $648,000 increase in gain on sale of loans[37]. - The effective corporate income tax rate for the three months ended September 30, 2024, was (4.3)%, significantly reduced by energy tax credits, compared to 22.0% for the same period in 2023[39].

Group 1 - FS Bancorp has a strong history of beating earnings estimates, with an average surprise of 8.94% over the last two quarters [1] - In the last reported quarter, FS Bancorp achieved earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $1.03 per share by 9.71% [1] - For the previous quarter, the company reported earnings of $1.06 per share against an expected $0.98 per share, resulting in an 8.16% surprise [1] Group 2 - Recent estimates for FS Bancorp have been increasing, indicating a positive outlook for future earnings [2] - The Zacks Earnings ESP for FS Bancorp is currently positive at +0.29%, suggesting analysts are optimistic about the company's earnings prospects [3] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [2] Group 3 - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [3] - A negative Earnings ESP can reduce the predictive power of the metric, but it does not necessarily indicate an earnings miss [3] - It is important to check a company's Earnings ESP before quarterly releases to improve the likelihood of successful investment decisions [4]

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks. Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics t ...

Acquisition and Expansion - The Company completed the acquisition of seven retail bank branches from Columbia State Bank, gaining approximately $425.5 million in deposits and $66.1 million in loans[179]. - The Company is committed to expanding into new markets and enhancing its community banking presence[180]. - The Company’s strategic focus includes diversifying revenues, expanding lending channels, and enhancing the banking franchise[180]. Loan Portfolio and Originations - As of June 30, 2024, the Company's loan portfolio consisted of real estate loans (61.7%), consumer loans (25.8%), and commercial business loans (12.5%)[181]. - The Company funded $32.6 million in fixture-secured consumer loans during the quarter ended June 30, 2024, with approximately 1,500 loans originated[182]. - One-to-four-family loan originations totaled $206.1 million for the three months ended June 30, 2024, including $164.5 million sold to investors[182]. - One-to-four-family loan originations for the six months ended June 30, 2024, totaled $363.8 million, a 34.5% increase from $270.5 million in the same period of 2023[210]. - The Company originated $67.6 million in fixture-secured loans for the six months ended June 30, 2024, representing 100% of the total[182]. Financial Performance - Net income for the three months ended June 30, 2024, was $9.0 million, a slight decrease from $9.1 million for the same period in 2023, primarily due to a 3.6% decrease in net interest income[221]. - Net income for the six months ended June 30, 2024, was $17.4 million, a slight increase from $17.3 million for the same period in 2023[236]. - Noninterest income increased by $1.0 million to $5.9 million for the three months ended June 30, 2024, driven by a $516,000 increase in gain on sale of loans[233]. - Noninterest income increased by $927,000 to $11.0 million for the six months ended June 30, 2024, primarily due to an $8.2 million increase in gain on sale of MSRs[248]. Interest Income and Expenses - The Company’s earnings are primarily dependent on net interest income, which is influenced by the balances of loans and investments outstanding[186]. - Net interest income decreased by $1.2 million to $30.4 million for the three months ended June 30, 2024, compared to $31.6 million for the same period in 2023, due to rising interest expenses[226]. - Interest income increased by $5.1 million to $45.9 million for the three months ended June 30, 2024, primarily due to a $138.7 million increase in average interest-earning assets[227]. - Interest expense rose by $6.2 million to $15.5 million for the three months ended June 30, 2024, driven by a $5.6 million increase in deposit interest expense[228]. - Total interest income increased by $11.3 million to $90.8 million for the six months ended June 30, 2024, primarily due to a $9.2 million increase in interest income on loans receivable[241]. - Interest expense increased by $12.8 million to $30.1 million for the six months ended June 30, 2024, primarily due to an increase in interest expense on deposits of $11.9 million[244]. Asset Quality and Credit Losses - The allowance for credit losses (ACL) on loans totaled $31.2 million or 1.26% of gross loans receivable at June 30, 2024, compared to $31.5 million or 1.30% at December 31, 2023[211]. - Nonperforming loans increased by $454,000 to $11.4 million at June 30, 2024, with a ratio of nonperforming loans to total gross loans at 0.46%[213]. - The provision for loan losses increased by $361,000, or 50.4%, for the three months ended June 30, 2024, compared to the same period in 2023[221]. - Provision for credit losses was $1.1 million for the three months ended June 30, 2024, compared to $716,000 for the same period in 2023, reflecting an increase in nonperforming loans[231]. - Net loan charge-offs totaled $1.2 million for the three months ended June 30, 2024, up from $650,000 in the same period in 2023[232]. Deposits and Borrowings - Total deposits decreased by $139.5 million to $2.38 billion at June 30, 2024, from $2.52 billion at December 31, 2023[214]. - Total deposits decreased to $2,382.8 million at June 30, 2024, from $2,522.3 million at December 31, 2023[218]. - Borrowings increased by $88.1 million to $181.9 million at June 30, 2024, from $93.7 million at December 31, 2023, primarily due to a decrease in total brokered deposits[216]. - Uninsured deposits were approximately $586.6 million, or 24.6% of total deposits, at June 30, 2024, compared to $606.5 million, or 24.0% of total deposits, at December 31, 2023[216]. Equity and Capital - Total stockholders' equity increased by $19.5 million to $284.0 million at June 30, 2024, from $264.5 million at December 31, 2023, driven by net income of $17.4 million[217]. - The book value per common share increased to $37.15 at June 30, 2024, from $34.36 at December 31, 2023[220]. - At June 30, 2024, the Bank's Tier 1 leverage-based capital ratio was 10.9%, exceeding all regulatory capital requirements[261]. Efficiency and Expenses - Noninterest expense decreased by $347,000 to $23.9 million for the three months ended June 30, 2024, primarily due to reductions in loan costs and FDIC insurance[234]. - The efficiency ratio improved to 65.78% for the three months ended June 30, 2024, compared to 66.52% for the same period in 2023[234]. - The efficiency ratio remained relatively unchanged at 66.07% for the six months ended June 30, 2024, compared to 66.04% for the same period in 2023[249]. Dividends and Stock Repurchases - The current quarterly common stock dividend rate is $0.27 per share, with total dividends paid each quarter expected to be approximately $2.1 million based on outstanding shares as of June 30, 2024[259]. - The Company has approximately $630,000 remaining available for future stock repurchases as of June 30, 2024, with an additional program authorized for up to $5.0 million[260].

Core Viewpoint - FS Bancorp (FSBW) is currently identified as a strong value stock with a Zacks Rank of 2 (Buy) and a Value grade of A, indicating it is potentially undervalued in the market [4][8]. Valuation Metrics - FSBW has a P/E ratio of 10.43, which is lower than the industry average of 11.53. Over the past 52 weeks, its Forward P/E has fluctuated between 6.37 and 10.60, with a median of 7.61 [4]. - The company has a P/B ratio of 1.25, compared to the industry average of 1.38. Its P/B ratio has ranged from 0.87 to 1.25 over the past year, with a median of 0.95 [5]. - FSBW's P/S ratio stands at 1.72, which is lower than the industry average of 2.11. This ratio is considered a reliable performance indicator due to the difficulty of manipulating sales figures [6]. - The P/CF ratio for FSBW is 7.22, significantly lower than the industry average of 10.72. Its P/CF has varied from 4.71 to 7.22 over the past year, with a median of 5.31 [7]. Investment Outlook - The combination of these valuation metrics suggests that FS Bancorp is likely undervalued, making it an attractive option for value investors, especially given its strong earnings outlook [8].

Here is a table that shows the new and old rates and the percentage increase. The table is sorted by ex-dividend day in ascending order and dividend streak in descending order. | --- | --- | --- | --- | |-------------|-----------------|---------------|------------------------| | | | | | | Ticker SRCE | Old Rate 0.34 | New Rate 0.36 | Increase Percent 5.88% | | NEP | 0.89 | 0.91 | 1.40% | | | | | | | FSBW | 0.26 | 0.27 | 3.85% | | ORRF | 0.2 | 0.23 | 15.00% | | MTG | 0.12 | 0.13 | 13.04% | | ODC | 0.29 | 0.3 ...