FS Bancorp Reports $3.03 Billion in Total Assets and $35 Million Net Income for Fiscal Year 2024

FS Bancorp, Inc. (FS Bancorp), the holding company for 1st Security Bank of Washington, reported consolidated total assets of $3.03 billion at the close of fiscal year 2024, a $56.5 million increase compared to $2.97 billion in 2023. This increase stemmed primarily from a $100.5 million rise in net loans receivable, a $21.3 million increase in other assets, and a $13.5 million increase in Federal Home Loan Bank (FHLB) stock. Net income for 2024 was $35 million, a decrease of $1 million or 2.9% from 2023. The decrease resulted from a slight decline in net interest income, a 4.1% increase in non-interest expense, and a 15.4% increase in the provision for credit losses, partially offset by increases in non-interest income and a decrease in the provision for income taxes.

The company's loan portfolio saw significant changes. Total loans receivable, net of allowances, increased to $2.5 billion, reflecting growth in one-to-four-family portfolio loans ($49.6 million), construction and development loans ($27.6 million), and multi-family loans ($21.5 million). However, commercial real estate (CRE) loans decreased by $21 million, and consumer loans decreased by $26.6 million, primarily due to a reduction in indirect home improvement loans. The allowance for credit losses on loans was $31.9 million (1.26% of gross loans receivable), slightly higher than the $31.5 million (1.30%) reported in 2023. Net charge-offs for 2024 totaled $5.3 million, significantly higher than the $2.2 million reported in 2023.

FS Bancorp completed the acquisition of seven retail bank branches from Columbia State Bank in February 2023, adding approximately $425.5 million in deposits and $66.1 million in loans. This expansion extended the company's reach into southeastern Washington and Oregon. The company also highlighted its continued emphasis on relationship-focused community banking, active participation in community events, and strategic growth initiatives in residential construction lending, home lending operations, warehouse lending, and geographic expansion of indirect home improvement lending. The company's employee headcount increased to 567 at the end of 2024, with 118 new hires during the year.

The company's investment activities included a $15.6 million investment in FHLB stock, yielding $658,000 in dividends during 2024. The company also held preferred stock from FNMA, but assigned no value to this investment at year-end. Deposit activities showed a decrease in total deposits to $2.34 billion, primarily due to a reduction in brokered certificates of deposit. The company's largest lending relationship at year-end totaled $42.6 million, while the second and third largest relationships totaled $36.3 million and $29.8 million, respectively. All borrowers were in compliance with their loan repayment terms.

FS Bancorp noted several risk factors, including macroeconomic conditions, lending activities, interest rate changes, accounting matters, regulatory and compliance matters, cybersecurity, and data management. The company emphasized its ongoing efforts to manage these risks through various strategies, including asset and liability management, hedging, and robust cybersecurity measures. The company also discussed its compliance with regulatory capital requirements and its plans for future growth and dividend payments. The company's outlook includes a continued focus on growing its loan portfolio, maintaining strong asset quality, and expanding into new markets.