FS Bancorp (FSBW) AI Stock Analysis

• Market Cap: $283.03M
• Dividend Yield: 3.17%
• Average Volume (3M): 16.67K
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.77
• Revenue Growth: 4.43%
• EPS Growth: -12.94%
• Country: US
• Employees: 567
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.10
• Shares Outstanding: 7,501,542
• 10 Day Avg. Volume: 12,963
• 30 Day Avg. Volume: 16,669
• PEG Ratio: -2.97
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 1.42
• P/FCF Ratio: 5.96
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 1.91
• Enterprise Value/Gross Profit: 2.87
• Enterprise Value/Ebitda: 7.55
• 1Y Price Target: $46.00
• Price Target Upside: 21.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 4.4
• Revenue Forecast (FY): $158.66M

• Rating: 56 Neutral
• Price Target: $39.00 ▲(3.37% Upside)
• Action: Downgraded Date: 03/14/26
• Date: Action: Downgraded 03/14/26

The score is held back primarily by 2025 fundamental weakness (sharp revenue decline and a major drop in operating/free cash flow) and bearish technicals (below key moving averages with negative MACD). Offsetting factors include attractive valuation (low P/E and solid dividend yield) and generally positive corporate developments (accretive M&A and a dividend increase).

Positive Factors

Cash Generation

FS Bancorp's very strong free cash flow growth and an operating-cash-flow-to-net-income ratio of 6.16 indicate durable cash conversion. This sustained cash generation supports lending, buffers credit cycles, funds dividends/share repurchases, and provides long-term capital flexibility without relying on volatile market financing.

Sustained Profitability

A healthy net margin (~15%) and mid-teens ROE underscore efficient core banking economics and consistent earnings power. Persistent profitability enhances retained earnings, supports capital build, and enables steady returns to shareholders while giving management room to invest in growth and absorb moderate credit stress.

Capital Allocation & Shareholder Returns

Consecutive dividend increases, ongoing buybacks and rising book/tangible book reflect disciplined capital allocation and strong capital ratios. This track record signals management confidence, attracts long-term income-focused investors, and shows capacity to return capital while maintaining franchise strength.

Negative Factors

Margin Pressure

A multi-year decline in gross profit margin points to rising funding or operating costs and/or unfavorable product mix. If unaddressed, this structural margin compression could erode operating leverage, reduce the buffer for credit losses, and limit the bank's ability to expand net interest income sustainably over the medium term.

Relatively Low Equity Ratio / Leverage

A moderate debt-to-equity ratio and relatively low equity ratio imply greater reliance on debt funding. In a rising-rate or stressed credit environment, this reduces financial flexibility, may increase funding costs, and could necessitate capital raises or constrain loan growth if regulatory or market pressures intensify.

Concentrated Credit Risk

A specific $1.0M provision related to one commercial construction relationship highlights borrower concentration risk in commercial lending. Such single-name or sector concentrations can produce episodic losses and require stronger underwriting or diversification to prevent recurring provisions that undermine earnings stability.

FS Bancorp Business Overview & Revenue Model

Company Description

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. As of December 31, 2021, it operated 21 full bank service branches and 10 home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, Thurston, and Lewis counties; and one loan production office in the market area of the Tri-Cities. The company was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

How the Company Makes Money

FS Bancorp primarily makes money through its banking subsidiary by earning interest income and fee-based (noninterest) income, offset by interest paid to depositors and other funding sources, plus operating expenses and credit costs. (1) Net interest income: The core earnings engine is the spread between interest earned on loans and other interest-earning assets (such as investment securities and interest-bearing cash) and interest paid on interest-bearing deposits and any borrowings. Revenue is influenced by loan and deposit volumes, the mix of loan types (e.g., commercial real estate, commercial and industrial, construction/land, residential real estate, and consumer), underwriting/credit performance (loan losses reduce profitability), and changes in market interest rates that affect asset yields and funding costs. (2) Noninterest income: The bank also generates fees from banking activities such as service charges on deposit accounts, certain loan-related fees (e.g., origination or servicing-related fees), and other charges for services provided to customers. The specific composition and relative size of individual fee categories is not available in this response and is therefore null. (3) Other contributing factors: Operating leverage (managing personnel, branch, technology, and compliance costs), credit quality (provision for loan losses), and balance-sheet mix (allocation between loans and securities, liquidity levels, and deposit mix) meaningfully affect earnings. Information on any significant external partnerships directly driving revenue is null.

FS Bancorp Financial Statement Overview

Summary

Fundamentals are mixed: profitability and ROE have been solid historically, but 2025 shows severe deterioration with revenue down ~90.7% and operating/free cash flow collapsing (FCF growth -97.9%). Balance-sheet leverage has also been volatile across years, adding risk despite acceptable capital levels in 2025.

Income Statement

Revenue expanded strongly from 2022–2024, but 2025 shows a sharp reversal (revenue growth -90.7%), which materially weakens the near-term trajectory. Profitability remains positive, with 2025 net margin still healthy (~15%), though down from the 2021–2023 range (~19%–29%), and operating profitability has also compressed versus prior years. Overall, the income statement reflects a profitable franchise but with elevated volatility and a notable 2025 deterioration.

Balance Sheet

Capital position appears reasonable with equity growing over time, and returns on equity remain solid (roughly 11%–17% across the period). Leverage, however, has been inconsistent: debt-to-equity swung from low levels (2023 ~0.23) to higher levels (2022 ~1.05; 2024 ~1.20) before improving again (2025 ~0.46). Total assets have steadily increased, supporting scale, but the leverage volatility introduces balance-sheet risk relative to a more stable peer profile.

Cash Flow

Cash generation weakened dramatically in 2025, with operating and free cash flow falling to about $2.0M (free cash flow growth -97.9%) from much higher levels in 2022–2024. While free cash flow has generally tracked net income closely in most years, the sharp step-down in 2025 raises questions about sustainability and earnings quality near term. The series also shows prior volatility (notably negative operating/free cash flow in 2020), reinforcing a less reliable cash-flow profile.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	217.51M	203.71M	185.26M	134.08M	131.08M
Gross Profit	144.75M	136.47M	136.59M	113.45M	120.86M
EBITDA	54.95M	52.15M	57.92M	50.99M	62.60M
Net Income	33.35M	35.02M	36.05M	29.65M	37.41M
Balance Sheet
Total Assets	3.20B	3.03B	2.97B	2.63B	2.29B
Cash, Cash Equivalents and Short-Term Investments	302.17M	200.75M	194.22M	275.40M	308.39M
Total Debt	141.08M	354.96M	60.27M	242.46M	96.71M
Total Liabilities	2.89B	2.73B	2.71B	2.40B	2.04B
Stockholders Equity	307.69M	295.77M	264.49M	231.70M	247.51M
Cash Flow
Free Cash Flow	51.94M	49.19M	76.00M	183.35M	107.03M
Operating Cash Flow	72.31M	50.82M	77.67M	184.90M	109.01M
Investing Cash Flow	-206.43M	-104.20M	77.67M	-504.04M	-310.83M
Financing Cash Flow	130.70M	19.32M	-131.08M	334.09M	136.74M

FS Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 37.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSBW, the sentiment is Negative. The current price of 37.73 is below the 20-day moving average (MA) of 40.05, below the 50-day MA of 40.94, and below the 200-day MA of 40.00, indicating a bearish trend. The MACD of -0.75 indicates Positive momentum. The RSI at 36.80 is Neutral, neither overbought nor oversold. The STOCH value of 21.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FSBW.

FS Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLBC	73 Outperform	$330.39M	9.72	13.35%	2.63%	11.98%	-10.12%
PCB	70 Outperform	$305.14M	8.21	9.62%	3.57%	10.93%	42.68%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CZNC	67 Neutral	$383.64M	13.73	7.79%	5.43%	5.76%	21.85%
FNLC	67 Neutral	$303.40M	8.51	12.70%	5.24%	10.46%	18.70%
CBAN	62 Neutral	$403.85M	10.64	8.98%	2.55%	6.92%	26.93%
FSBW	56 Neutral	$283.03M	9.19	10.77%	3.17%	4.43%	-12.94%

FS Bancorp Corporate Events

FS Bancorp to Acquire Pacific West Bancorp in Merger

FS Bancorp, Inc. and Pacific West Bancorp, two Pacific Northwest community banking companies, announced on February 25, 2026, that they signed a definitive merger agreement under which Pacific West will merge into FS Bancorp in a stock-and-cash deal valued at about $34.6 million, or $12.52 per share. The combination would create a pro forma institution with roughly $3.6 billion in assets, $3.0 billion in loans and deposits, and 31 branches across Washington and Oregon, expanding FS Bancorp’s presence in the Portland-Vancouver market while giving Pacific West customers access to broader capital resources and products.

Under the terms, Pacific West shareholders may elect FS Bancorp stock or cash from an aggregate consideration of 430,176 shares and $16.8 million in cash, leaving them with about 5.4% of FS Bancorp’s outstanding common stock upon closing. The boards of both companies have unanimously approved the transaction, which is projected to be immediately accretive to FS Bancorp’s earnings per share and modestly dilutive to tangible book value with a 2.4-year earnback, and the deal is expected to close in the third quarter of 2026, subject to shareholder and regulatory approvals.

The most recent analyst rating on (FSBW) stock is a Buy with a $47.00 price target. To see the full list of analyst forecasts on FS Bancorp stock, see the FSBW Stock Forecast page.

FS Bancorp leadership to attend Janney 2026 CEO Forum

FS Bancorp, Inc. said its president, Matthew D. Mullet, chief financial officer Phil Whittington and director of finance Susan Dumontet will attend the Janney 2026 CEO Forum in Scottsdale, Arizona, on February 4-5, 2026. The company is distributing investor materials in connection with the conference, underscoring its ongoing outreach to institutional investors and analysts and its effort to raise the bank’s profile within the financial services and capital markets community.

The most recent analyst rating on (FSBW) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on FS Bancorp stock, see the FSBW Stock Forecast page.

FS Bancorp Posts Higher Q4 Earnings, Raises Dividend

On January 21, 2026, FS Bancorp reported fourth-quarter 2025 net income of $8.4 million, or $1.10 per diluted share, up from $7.4 million, or $0.92 per diluted share, a year earlier, while full-year 2025 net income dipped to $33.3 million from $35.0 million in 2024. The company highlighted a stable net interest margin of 4.35%, 14.3% year-over-year deposit growth to $2.67 billion, and a 4.8% increase in net loans receivable to $2.62 billion, alongside modest declines in its largely home-improvement-based consumer loan portfolio. Book value and tangible book value per share rose to $41.55 and $39.65, respectively, supported by strong capital ratios and share repurchases, as well as additional noninterest income from bank-owned life insurance, partly offset by a $1.0 million credit provision tied to a single commercial construction relationship. Reflecting confidence in its capital position and operating performance, the board approved a 3.6% increase in the regular quarterly dividend to $0.29 per share, marking the 52nd consecutive quarterly payout, and the bank purchased a 122,000-square-foot building to consolidate its headquarters operations, signaling continued investment in long-term efficiency and infrastructure.

The most recent analyst rating on (FSBW) stock is a Buy with a $47.00 price target. To see the full list of analyst forecasts on FS Bancorp stock, see the FSBW Stock Forecast page.