FS Bancorp Reports $7.7 Million Net Income for Q2 2025, Down from $8.96 Million Last Year

FS Bancorp, Inc. reported a net income of $7.7 million for the three months ended June 30, 2025, a decrease from $8.96 million in the same period last year. For the first half of 2025, net income totaled $15.7 million, down from $17.4 million in the prior year. The decline in profitability was attributed to a $1.6 million increase in noninterest expenses, a $944,000 rise in provisions for credit losses, and a $698,000 drop in noninterest income. However, net interest income increased by $1.7 million, reflecting a 5.6% rise compared to the previous year, driven by higher interest income from loans.

Total assets for FS Bancorp increased by $146.8 million to $3.18 billion as of June 30, 2025, compared to $3.03 billion at the end of 2024. This growth was primarily fueled by an $80.3 million increase in net loans receivable, alongside increases in loans held for sale and securities. The loan portfolio composition showed a significant focus on commercial real estate, which accounted for 35% of total loans, while residential real estate loans made up 29.8%. The company also reported a total of $2.55 billion in deposits, an increase of $214 million, with notable growth in brokered deposits.

Operationally, FS Bancorp has been expanding its indirect consumer lending platform, which operates across multiple states. The company originated 1,620 fixture-secured consumer loans totaling $37.6 million during the quarter, with a significant portion of these loans coming from a concentrated group of contractors. The company’s strategic focus includes diversifying revenue streams and enhancing its banking franchise, with plans to grow its loan portfolio and maintain strong asset quality.

The provision for credit losses increased to $2.0 million for the quarter, reflecting the growth in the loan portfolio and an uptick in nonperforming loans, particularly in the consumer and construction segments. Nonaccrual loans rose to $19 million, up from $13.6 million at the end of 2024, indicating a need for increased reserves. The company’s allowance for credit losses stood at $32.2 million, or 1.23% of gross loans, as of June 30, 2025.

Looking ahead, FS Bancorp remains committed to its growth strategy, focusing on expanding its lending operations and enhancing customer relationships. The company is also actively managing its liquidity and capital resources, maintaining a well-capitalized status under regulatory requirements. With a strong emphasis on community involvement and customer service, FS Bancorp aims to navigate the current economic landscape while continuing to deliver value to its shareholders.