0001437749-26-008243
SEC filingFS Bancorp, Inc. reported net income of $33.3 million for fiscal year 2025, a decrease from $35.0 million in 2024. The decline was driven by a $4.4 million increase in noninterest expense, a $4.0 million increase in provision for credit losses, and a $1.2 million increase in provision for income taxes, partially offset by a $7.3 million increase in net interest income. Net interest income rose to $130.4 million, supported by loan growth and higher yields, while the net interest margin improved slightly to 4.33%. Total assets grew to $3.20 billion, primarily from increases in loans receivable and securities. The company maintained a strong capital position, with total stockholders' equity of $307.7 million and regulatory capital ratios exceeding requirements. Asset quality showed some pressure, with nonperforming loans increasing to $18.7 million (0.71% of total loans) from $13.6 million (0.54%) in 2024.
FS Bancorp reported net income of $33.3 million for fiscal year 2025, representing a decrease from $35.0 million in 2024. The company's pre-tax income was $41.1 million, with a total provision for income taxes of $7.8 million resulting in an effective tax rate of 18.9%. Net interest income increased $7.3 million to $130.4 million, driven by higher yields on loans and net loan growth, while the net interest margin improved to 4.33% from 4.30%. Total assets grew $167.7 million to $3.20 billion, primarily due to increases in loans receivable ($121.2 million), securities held-to-maturity ($24.8 million), and loans held for sale ($15.9 million). The loan-to-deposit ratio improved to 100.9% from 109.5% as deposits grew $334.2 million to $2.67 billion.
The company's revenue is primarily driven by net interest income, which constitutes the majority of total revenue. Interest income totaled $197.2 million, up $12.4 million from 2024, with loans receivable generating $181.9 million at an average yield of 6.93%. Noninterest income increased slightly to $22.3 million from $21.6 million, with gain on sale of loans contributing $8.3 million and service charges and fee income contributing $9.1 million. The company's loan portfolio is diversified across four major segments: commercial real estate (36.5% of portfolio), residential real estate (28.6%), consumer loans (22.5%), and commercial business loans (12.4%). Consumer loans, primarily indirect home improvement loans, represent a higher risk segment and declined $23.2 million during the year.
Net interest margin improved to 4.33% from 4.30% in 2024, reflecting higher yields on interest-earning assets. The average yield on loans receivable increased to 6.93% from 6.80%, while the average cost of interest-bearing liabilities increased slightly to 3.14% from 3.11%. The efficiency ratio improved to 66.81% from 67.45%, indicating better expense management relative to revenue growth. Noninterest expense increased $4.4 million to $102.0 million, primarily due to higher salaries and benefits ($2.7 million increase) and professional fees. The provision for credit losses increased to $9.5 million from $5.5 million, reflecting portfolio growth and higher net charge-offs of $8.9 million compared to $5.3 million in 2024.
Net cash from operating activities was $72.3 million, while investing activities used $206.4 million primarily for loan originations and securities purchases. Financing activities generated $130.7 million, driven by deposit growth and borrowings. The company ended with cash and cash equivalents of $28.2 million. Total liabilities increased $155.7 million to $2.89 billion, with deposits comprising $2.67 billion. Borrowings decreased $178.5 million to $129.3 million as the company shifted to brokered deposits for funding. Stockholders' equity increased $11.9 million to $307.7 million, with book value per common share of $41.55. The allowance for credit losses on loans was $31.9 million (1.20% of gross loans), with coverage of nonperforming loans at 170.6%.
The company faces risks from macroeconomic conditions, including potential economic downturns in its primary market areas in Washington and Oregon. Interest rate volatility and margin compression remain concerns, though the company's interest rate risk simulation shows moderate exposure to rate changes. Management's strategic priorities include growing and diversifying the loan portfolio, maintaining strong asset quality, emphasizing lower-cost core deposits, and expanding into new markets. The company plans to continue paying quarterly cash dividends of $0.29 per share, totaling approximately $2.1 million per quarter based on current shares outstanding. Regulatory capital ratios exceed requirements, with the bank maintaining 'well capitalized' status. The company has adequate liquidity with $716.2 million in total borrowing capacity and expects to manage capital expenditures related to headquarters consolidation.