FS Bancorp Reports $7.83 Million Net Income in Q1 2026, Announces Acquisition of Pacific West Bancorp

FS Bancorp, Inc. reported a net income of $7.83 million for the first quarter of 2026, a slight decrease from $8.02 million in the same period of 2025. The company's earnings per share increased marginally to $1.04 from $1.02 year-over-year. The decline in net income was attributed to a 58.9% increase in the provision for credit losses, which rose to $2.53 million, and a 43.5% increase in income tax provisions. However, net interest income improved by 5.0% to $32.55 million, driven by a $2.5 million increase in total interest income, primarily from higher loan balances and yields.

Total assets for FS Bancorp remained stable at approximately $3.20 billion as of March 31, 2026, compared to $3.20 billion at the end of 2025. Notable changes included a $17.7 million decrease in securities available-for-sale and a $12.6 million increase in loans held for sale. Loans receivable net of allowances were $2.62 billion, unchanged from the previous quarter, with increases in commercial real estate and residential real estate loans offset by declines in consumer loans. The company’s loan portfolio is diversified, with commercial real estate loans making up 37.2%, residential real estate loans 28.8%, consumer loans 21.9%, and commercial business loans 12.1%.

In terms of operational metrics, FS Bancorp's total deposits decreased by $36.1 million to $2.64 billion, reflecting declines across various deposit categories, particularly in noninterest-bearing and interest-bearing checking accounts. The company’s loan-to-deposit ratio increased to approximately 102.9% from 100.9% at the end of 2025. The bank's total borrowings rose to $167.3 million, up from $129.3 million, as the company sought competitive rates on borrowings compared to brokered deposits.

Strategically, FS Bancorp announced a definitive agreement to acquire Pacific West Bancorp in a transaction valued at approximately $34.6 million, which is expected to close in the third quarter of 2026, pending regulatory approvals. This acquisition aims to enhance FS Bancorp's market presence, particularly in the Greater Portland area, where Pacific West operates. The company continues to focus on diversifying its revenue streams and expanding its lending channels while maintaining strong asset quality. Looking ahead, FS Bancorp anticipates ongoing challenges in the economic environment, particularly in consumer lending, but remains committed to managing risks and capitalizing on growth opportunities.