FS Bancorp (FSBW) AI Stock Analysis

• Market Cap: $319.31M
• Dividend Yield: 3.17%
• Average Volume (3M): 16.67K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.74
• 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: 7,518,462
• 10 Day Avg. Volume: 12,963
• 30 Day Avg. Volume: 16,669
• PEG Ratio: -2.79
• Price to Book (P/B): 1.07
• Price to Sales (P/S): 1.55
• P/FCF Ratio: 6.43
• Enterprise Value/Market Cap: 1.41
• Enterprise Value/Revenue: 2.06
• Enterprise Value/Gross Profit: 3.08
• Enterprise Value/Ebitda: 8.57
• 1Y Price Target: $45.00
• Price Target Upside: 4.41% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: $48.00 ▲(11.37% Upside)

FSBW scores well on solid financial performance—especially strong cash flow conversion and healthy profitability—supported by attractive valuation (low P/E and a solid dividend yield). Technicals are moderately positive with price above key moving averages, while recent corporate updates are constructive but tempered by a noted credit provision.

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 generates revenue primarily through interest income earned on its loan portfolio, which includes personal, commercial, and mortgage loans. The company also earns non-interest income through fees associated with deposit accounts, mortgage origination, and other financial services. Additionally, FS Bancorp benefits from its investment securities portfolio, which contributes to interest income. The bank's focus on community banking allows it to build strong relationships with clients, leading to a stable deposit base and a lower cost of funds. Strategic partnerships with local businesses and real estate developers also enhance its lending capabilities and overall earnings.

FS Bancorp Financial Statement Overview

Summary

Overall fundamentals are solid, supported by strong cash generation (free cash flow growth 80.68% TTM; operating cash flow to net income 6.16) and healthy profitability (net margin 15.05% TTM). Balance sheet leverage is moderate (debt-to-equity 0.62), though the relatively low equity ratio and declining gross profit margin trend temper the score.

Income Statement

FS Bancorp shows a stable revenue growth trajectory with a TTM revenue growth rate of 1.68% and consistent profitability. The gross profit margin has decreased over time, indicating potential cost pressures, but the net profit margin remains healthy at 15.05% for TTM. The EBIT and EBITDA margins are solid, reflecting efficient operations. However, the declining gross profit margin from 2022 to 2025 suggests a need for cost management.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.62 in TTM, showing improved leverage management compared to previous years. Return on equity is decent at 10.84%, indicating effective use of equity to generate profits. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks in a rising interest rate environment.

Cash Flow

FS Bancorp demonstrates strong cash flow management with a significant increase in free cash flow growth of 80.68% in TTM. The operating cash flow to net income ratio is robust at 6.16, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is nearly 1, showing efficient conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	219.50M	203.71M	185.26M	134.08M	131.08M	142.13M
Gross Profit	146.52M	136.47M	136.59M	113.45M	120.86M	114.38M
EBITDA	52.72M	52.15M	57.92M	50.99M	62.60M	63.47M
Net Income	32.31M	35.02M	36.05M	29.65M	37.41M	39.26M
Balance Sheet
Total Assets	3.21B	3.03B	2.97B	2.63B	2.29B	2.11B
Cash, Cash Equivalents and Short-Term Investments	258.63M	200.75M	194.22M	275.40M	308.39M	281.87M
Total Debt	185.94M	354.96M	60.27M	242.46M	96.71M	117.70M
Total Liabilities	2.91B	2.73B	2.71B	2.40B	2.04B	1.88B
Stockholders Equity	300.51M	295.77M	264.49M	231.70M	247.51M	230.01M
Cash Flow
Free Cash Flow	95.99M	49.19M	76.00M	183.35M	107.03M	-33.70M
Operating Cash Flow	101.04M	50.82M	77.67M	184.90M	109.01M	-32.32M
Investing Cash Flow	-280.91M	-104.20M	77.67M	-504.04M	-310.83M	-270.69M
Financing Cash Flow	200.81M	19.32M	-131.08M	334.09M	136.74M	348.81M

FS Bancorp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSBW, the sentiment is Positive. The current price of 43.1 is above the 20-day moving average (MA) of 41.85, above the 50-day MA of 41.71, and above the 200-day MA of 39.98, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 57.86 is Neutral, neither overbought nor oversold. The STOCH value of 77.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSBW.

FS Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FNLC	77 Outperform	$326.71M	9.49	11.86%	5.24%	10.46%	18.70%
FSBW	75 Outperform	$319.31M	9.90	10.77%	3.17%	4.43%	-12.94%
CZNC	74 Outperform	$420.48M	16.21	7.54%	5.43%	5.76%	21.85%
CBAN	74 Outperform	$444.85M	13.17	9.63%	2.55%	6.92%	26.93%
PLBC	73 Outperform	$365.93M	11.59	12.34%	2.63%	11.98%	-10.12%
PCB	72 Outperform	$336.27M	9.14	9.38%	3.57%	10.93%	42.68%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

FS Bancorp Corporate Events

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.